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Stocks take hammering as KSE-100 plunges nearly 750 points on negative cues

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  • KSE-100 plunges by 707.80 points.
  • Index closes at 41,367.11 points.
  • Political uncertainty plunges market.

KARACHI: The stocks at the Pakistan Stock Exchange (PSX) plunged Monday as its benchmark KSE-100 lost over 700 points after uncertainty surrounded Pakistan’s political arena.

Investors reacted with panic to the depreciating Pakistani rupee against the US dollar and political uncertainty in the wake of the preliminary results of the by-polls in Punjab.

The market opened at 42,074 points but it plunged by 707.80, or 1.68%, points to close at 41,367.11 points.

Arif Habib Limited Head of Research Tahir Abbas told Geo.tv that “a lot of ifs and buts” have been created as the PTI has cracked more seats than the ruling PML-N in the Punjab Assembly by-polls.

The market situation at the close. — PSX Data
The market situation at the close. — PSX Data

“Following the results of the by-polls, there’s an uncertainty in the market on whether the federal coalition government will continue or will it announce snap polls.”

“If early elections are announced, then it would trigger uncertainty over the International Monetary Fund’s (IMF) curial programme as well,” he said, pointing out that although a staff-level agreement has been reached, the global lender’s Executive Board is yet to give a green signal.

Abbas said that one of IMF’s pre-conditions was hiking the gas and electricity tariff, for which the federal cabinet is yet to give approval.

“Now that it (PML-N) has lost its heart — Punjab — it remains unclear what it is going to do next. If the federal cabinet does not approve the hike, then the IMF programme’s revival will remain in danger.”

Voicing the same concerns as Abbas, Alpha Beta Core CEO Khurram Schehzad said that with political uncertainty taking roots again, IMF programme may get impacted.

“Hopefully […] clarity emerges soon before its late,” Schehzad said.

The stocks of a total of 326 companies were traded during the day, out of which 55 were in the green, 253 red, and 18 remain unchanged.

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Finance Minister: A “big” IMF program is coming for Pakistan.

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Speaking at the Karachi Stock Exchange ceremony, the Finance Minister announced that meetings with IMF representatives would take place in Washington on April 14 and 15.

He applauded the caretaker government’s effort to bring about economic stability and predicted that the nation’s economy would stabilize with improved economic policies.

Muhammad Aurangzeb emphasized that in order to move the country’s economy toward stabilization, structural reforms must be implemented.

He restated that the nation’s recovery from the economic crisis depends heavily on the stock market. The stock market is, nevertheless, trending upward.

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Pakistan is still classified as a secondary emerging market by the FTSE.

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The nation could perhaps be demoted, according to the worldwide index provider, since its index weight has decreased over the previous few years.

Pakistan’s market capitalization peaked in 2017 at $100 billion, but it fell to $21 billion by 2024, according to a Bloomberg research.

It did, however, state that Pakistan’s standing as a secondary emerging market will remain unchanged due to favorable political changes brought about by the establishment of a stable government.

Bloomberg saw Shehbaz Sharif’s election as prime minister, who is open to reform, as a step in the right direction for the nation struggling financially.

Shehbaz Sharif, the president of the Pakistan Muslim League-Nawaz, was chosen on March 4 to serve as the country’s 24th prime minister.

With 201 votes, PM Shehbaz defeated Omar Ayub Khan of the Sunni Ittehad Council (SIC) by 92 votes.

over the economy, earlier this month, Pakistan and the International Monetary Fund (IMF) came to an agreement at the staff level over the second and last review conducted under Pakistan’s Stand-By Arrangement.

The IMF secured a staff-level agreement with Pakistan on the second and final review of the nation’s stabilization program, which is backed by the IMF’s US$3 billion (SDR2,250 million) SBA authorized, according to the official statement released by an IMF team led by Nathan Porter.

The remaining US$1.1 billion (SDR 828 million) of SBA access will be made available following the IMF Executive Board’s approval of the deal.

It was reported shortly after the February 8 election that the newly elected PML-N-led government intended to apply for a new IMF credit package.

Pakistan is anticipated to pursue a $6–8 billion loan program from the global lender, and the IMF will be contacted right once to begin negotiations for this. The sources went on to say that the IMF would have tighter requirements this time.

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PM Shehbaz Sharif: “A plan to digitize the tax system is underway.”

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In an address to the All Pakistan Newspapers Society delegation in Islamabad today, the prime minister announced that plans were in motion to update the tax collection system.

The prime minister added that efforts are underway to broaden the revenue base and that the Federal Board of Revenue (FBR) is fully digitizing.

He emphasized that the Tax Excellence Awards were a recent initiative by the government to support female entrepreneurs, exporters, and engaged taxpayers.

The government’s priorities, according to the prime minister, are institutional changes, austerity, domestic and external investment, and privatization of government-owned businesses.

Praiseing the media’s contribution to public awareness-raising and good governance, he called on the sector to successfully communicate the benefits of economic stability under SIFC.

Calling fake news a major problem, he emphasized the need for cooperation to combat it. Additionally, he extended an invitation to the press to back Pakistan’s administration in its endeavors for the country’s growth and well-being.

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