Shares at PSX plunge 700 points ahead of IMF team’s impending visit for final review

Published March 13, 2024
This image shows activity on the Pakistan Stock Exchange on Wednesday. — Screenshot via PSX data portal
This image shows activity on the Pakistan Stock Exchange on Wednesday. — Screenshot via PSX data portal

For the second consecutive session this week, shares at the Pakistan Stock Exchange (PSX) on Wednesday traded in the red as bears dragged the benchmark index down sharply by 753 points.

The KSE-100 index contracted by 753.26 points, or 1.16 per cent, to stand at 64,048.44 from the previous close of 64,801.70. It had reached a low of 63,856.51 during the session.

Shahbaz Ashraf, chief investment officer at FRIM Ventures, observed that the bourse closed in negative zone yet again, down by 1.2pc (754pts) compared to 1.45pc yesterday.

“The selling trend can be accredited to uncertainty with the upcoming Monetary Policy Committee (MPC) on 18th March 2024” coupled with the fear of the rupee depreciating in the next few months,“ he said as he reminded that the country needs to “make a payment of around $4-4.5bn dollars”.

Additionally, he said the market was off to a slow start in the month of Ramazan with sluggish volumes and a “lack of triggers in the near term despite robust corporate earnings and market trading at a Price-to-Earning Ratio of 4.0-4.5”.

Awais Ashraf, director of research at Akseer Research, observed that “the lack of fiscal space is raising concerns about the clearance of circular debt, as evidenced by the negative contribution from state-owned enterprises such as OGDC (Oil and Gas Development Company), PPL (Pakistan Petroleum Limited), and PSO (Pakistan State Oil) in the index contributions.”

Moreover, he added that the investors were concerned about the “revocation of the GSP+ status due to a letter from PTI, the loss of which may lead to a decline in export revenue for the country, exacerbating existing external imbalances”.

Mohammed Sohail attributed the bearish momentum to “selling by leveraged investors in a low-volume market” which exacerbated the impact.

Meanwhile, Shahab Farooq, director of research at Next Capital Limited, said that the market “remained under pressure as investors opted for caution ahead of IMF talks and MPC meeting next week”.

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