KARACHI: The Pakistan Stock Exchange on Monday nosedived to a 10-month low as political and economic uncertainty drove investor sentiment, leading to panic selling.
The benchmark KSE-100 Share index plunged 3.39% to below 38,000 points after shedding 1,328 points. This was the largest single-day fall in the last 14 months, dragging the index down to its lowest level in 10 months.
Although the government has hinted at going back to the International Monetary Fund (IMF) for a bailout to fix the faltering economy, people want a clear statement from the government. Investors also await clarity on Saudi investment in various projects.
Top stocks Habib Bank (-5%), United Bank (-5%), Lucky Cement (-5%) and DG Khan Cement (-5%) closed at their lower circuits.
Major heavyweights namely Habib Bank (-5%), Pakistan Petroleum (-2.85%), Oil and Gas Development Company (-2.38%), Engro (-2.76%), MCB Bank (-1.19%), United Bank (-5%), Fauji Fertilizer (-4.77%) and Pakistan Oilfields (-3.88%) cumulatively struck 491 points off the index.
Overall, trading volumes increased to 186 million shares compared with Friday’s tally of 154.1 million. The value of shares traded during the day was Rs6.3 billion.
Shares of 385 companies were traded. At the end of the day, 30 stocks closed higher, 341 declined and 14 remained unchanged.
The Bank of Punjab was the volume leader with 18.4 million shares, losing Rs0.85 to close at Rs10.12. It was followed by K-Electric Limited with 12.2 million shares, losing Rs0.23 to close at Rs4.77 and WorldCall Telecom with 10.3 million shares, losing Rs0.04 to close at Rs1.64.
Out of total 301 active stocks, 258 are trading under mounting selling pressure. Many of them have fallen by close to their lower limit of 5% or Rs1.
The KSE-100 index, the gauge of the market’s performance, had already lost 4.3% at the end of the previous week, losing 861 points during Friday’s session alone as news of Shehbaz Sharif’s arrest by NAB reached.
Pakistan’s dollar reserves fell by another $600 million last week to come to a critical level ($8.4 billion), that barely covers two months of imports. The government has, however, been delaying an IMF loan, which has become unavoidable. The government needs to shore up the dollar reserves to pay for imports that keep the economy afloat and pay its foreign loans to avoid default.
