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Political uncertainty rattles Pakistan stocks, KSE-100 plummets over 1,200 points

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  • PSX witnessed bloodbath session as rising political temperature amid ongoing constitutional crisis raises alarm in stock market.
  • KSE-100 index seesaws as investors struggle to anticipate impact of actions being taken by authorities.
  • Analyst says it is “difficult” to comment on outlook of market.

KARACHI: The Pakistan Stock Exchange (PSX) on Monday came under intense selling pressure as the rising political drama rattled investors and pushed the benchmark index deep into the red with a drop of over 1,200 points.

The rising political temperature in the country amid the ongoing constitutional crisis raised alarm in major sectors of the economy as well as the stock market, which fell below 44,000-point mark.

President Arif Alvi, on the suggestion of Prime Minister Imran Khan, dissolved the National Assembly in an attempt to avoid voting on the no-confidence motion tabled against him [PM Khan].

The benchmark KSE-100 index seesawed as investors struggled to anticipate the impact of actions being taken by the authorities in the wake of the political turmoil.

At the close, the KSE-100 index plummeted 1,250.06 points, or 2.77%, to settle at 43,902.05 points.

Benchmark KSE-100 index intra-day trading curve. — PSX data portal
Benchmark KSE-100 index intra-day trading curve. — PSX data portal

Speaking to Geo.tv, BMA Capital Management Executive Director Saad Hashemy said that the political uncertainty is taking a toll on the market.

“Investors are always concerned about the economic issues being addressed,” he said, adding that till there is clarity on the political front the market will remain volatile on fears of economic concerns.

Regarding the market’s direction in the ongoing week, the analyst said that it is “difficult” to comment on the outlook. However, Hashemy added that the next two to three days are important as market players are closely eyeing how things are unfolding and developments during this period will give the market a direction.

A report from Arif Habib Limited noted that the benchmark KSE-100 index experienced a “blood bath” session throughout the day due to political unrest. 

“A significant decline was observed in the volumes of the market as well,” it stated, adding that across the board selling was witnessed. 

Main board volumes remained subdued. On the flip side, hefty volumes were recorded in the third-tier stocks.

Sectors contributing to the performance included banks (-324.5 points), cement (-252.9 points), technology and communications (-100.6 points), exploration and production (-93.5 points) and power (-69.2 points).

Shares of 305 were traded during the session. At the close of trading, 26 scrips closed in the green, 268 in the red, and 11 remained unchanged.

Overall trading volumes plunged to 170.48 million shares compared with Friday’s tally of 389.11 million. The value of shares traded during the day was Rs5.49 billion.

Telecard Limited was the volume leader with 17.39 million shares traded, losing Rs0.57 to close at Rs13.86. It was followed by K-Electric with 16.01 million shares traded, losing Rs0.18 to close at Rs2.92, and TPL Properties with 12.55 million shares traded, losing Rs1.56 to close at Rs19.26. 

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An investigation was “launched” into PTA’s inability to get Rs. 78 billion back from Telcos

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The PTA has reportedly been instructed to reply to NAB by July 29. According to the enquiry, the national exchequer has suffered losses as a result of the delay in collecting dues.

The PTA has been asked to provide NAB with information about any pertinent records, court proceedings, and overdue bills. The NAB Karachi has summoned the PTA officials to appear with all pertinent documentation.

All of the principle sum has to be paid by the LDI firms, according to sources. But due to judicial stay orders, the collection of dues has been impeded.

These sources further state that a steering group has been established by the Ministry of IT to supervise the issue of dues recovery.

In a previous event, the tariffs levied on importing cell phones from outside were clarified by the Pakistan Telecommunication Authority (PTA).

Contrary to what some internet reports claim, PTA clarified in response to recent news regarding the tariffs on mobile phone imports that there hasn’t been a formal decision to remove these levies in Pakistan.

the PTA.Pakistanis living abroad will be the only ones free from these levies, according to the PTA. A SIM card can be inserted and the phone restarted to temporarily register a device for non-PTA mobile subscribers.

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Weekly inflation in Pakistan increased by 0.17 percent.

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The SPI for the week under review in the aforementioned group was reported at 321.95 points, as opposed to 321.40 points during the previous week, according to the PBS statistics.

The SPI for the combined consumption group saw a 20.09 percent increase in the week under review compared to the same week the previous year.

The weekly SPI includes 51 necessary items for every spending group and 17 urban areas, with a base year of 2015–16 = 100.

The SPI for the lowest consumption category, which is up to Rs 17,732, grew by 0.08 percent from 311.97 points to 312.22 points this past week.

0.18 percent,The index of consumption for the lowest consumption groups, which are Rs 17,732-22,888, Rs 22,889-29,517, Rs 29,518-44,175 and above Rs 44,175; increased by 0.13 percent, 0.15 percent, 0.18 and 0.19 percent, respectively.

Nineteen (37.25%) of the fifty-one commodities had price increases over the week, eight (15.69%) had price decreases, and twenty-four (47.06%) had unchanged pricing.

On a weekly basis, the following commodities saw significant price decreases: tomatoes (9.19%), onions (2.14%), LPG (1.04%), bananas (0.53%), wheat flour (0.35%), potatoes (0.17%), pulse masoor (0.16%), and bread (0.05%).

Chicken (4.80%), garlic (2.01%), pulse gramme (1.87%), eggs (1.71%), beef (0.93%), gur (0.89%), pulse moong (0.84%), fresh milk (0.45%), firewood (0.23%), and cigarettes (0.12%) were among the items whose average prices increased significantly week over week.

The commodities that saw a year-over-year decline were: wheat flour (31.75%); cooking oil (13.44%); vegetable ghee 2.5 kg (10.42%); vegetable ghee 1 kg (9.85%); mustard oil (8.33%); eggs (5.82%); rice basmati broken (4.15%); and tea package (2.52%).

Gas prices for Q1 (570.00%), onions (96.01%), pulse gramme (40.39%), powered milk (39.11%), garlic (34.61%), pulse moong (29.77%), men’s sandals (25.01%), beef (23.52%), salt powder (23.28%), pulse mash (22.50%), and energy saver (17.96%) were among the commodities whose average prices increased year over year.

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The price of gold has drastically dropped in Pakistan.

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As per the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the cost of 24-karat gold per tola decreased by Rs 2,300, standing at Rs 250,500.

A kilogramme of 24-karat gold costing Rs1,972 less at the local market, making it worth Rs2114,763. Ten grammes of 22-karat gold had a price decrease to Rs196,866 as well.

After losing a significant $43 during the day, the rate per ounce of gold on the international market also decreased. It currently stands at $2,370.

On Thursday, the price of 24-karat silver also experienced a decline, falling by Rs60 to settle at Rs2,860 petal.

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