close
Thursday February 22, 2024

Stocks nosedive as poll results, circular debt spook investors

PSX benchmark KSE 100-share Index closed lower by 1,878.43 points or 2.98% to 61,065.32 points against 62,943.75 points recorded in last session

By Our Correspondent
February 13, 2024
Brokers are busy trading at the Pakistan Stock Exchange (PSX) in Karachi on Monday, February 12, 2024.— PPI
Brokers are busy trading at the Pakistan Stock Exchange (PSX) in Karachi on Monday, February 12, 2024.— PPI

KARACHI: Pakistan stocks plunged by nearly 3 percent Monday amid political turmoil amid a deadlock on the formation of the new government, traders said.

The Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index closed lower by 1,878.43 points or 2.98 percent to 61,065.32 points against 62,943.75 points recorded in the last session. The highest index of the day remained at 62,634.38 points while the lowest level was recorded at 60,647.68 points.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, “Stocks fell sharply lower on election deadlock and political turmoil after general elections results.” Bloomberg’s views over default risks, Moody’s rating concerns over political instability, policy uncertainty and high leveraging at PSX were catalysts in the bearish close.

However, he said, strong financial results and upbeat data on $2.4 billion remittances surging by 26 percent YoY in Jan’24 supported the index to close above the day’s low.

The KSE-30 index decreased by 650.72 points or 3.06 percent to 20,637.54 points against 21,288.25 points.

Traded shares increased by 91 million shares to 349.975 million shares from 258.073 million shares. The trading value rose to Rs12.745 billion from Rs12.529 billion. Market capital narrowed to Rs8.934 trillion against Rs9.198 trillion. Out of 354 companies active in the session, 35 closed in green, 300 in red and 19 remained unchanged.

Analyst Ali Najib at Topline Securities said that continuing last week’s momentum, Pakistan equities commenced the business on a negative note, remained bearish throughout the session and ultimately KSE 100 index called the day at 61,065 levels (lost 1,878 points; down 2.98%).

The aforesaid selling spree can be attributed to further delay in the Circular Debt Management Plan where the IMF nod is awaited and may likely be received this week as informed by the Petroleum Division, he said. In addition, uncertainty over the political front about the formation of a new government grabbed the market sentiments.

However, at the intraday’s low level of 60,648, brave value hunters opted to do some cherry picking which helped the benchmark index to gain some earlier lost ground.

The E&P, power and cement sectors contributed negatively to the index as OGDC, PPL, MARI, HUBC and LUCK lost 640 points, cumulatively.

The highest increase was recorded in Pakistan Hotels Developers Limited, which rose by Rs28.47 to Rs455.68 per share, followed by Ibrahim Fibres Limited, which increased by Rs10 to Rs410 per share. A significant decline was noted in Mari Petroleum Company Limited, which fell by Rs127.10 to Rs2,147.01 per share, followed by Hoechst Pakistan Limited, which closed lower by Rs80 to Rs1,320 per share.

Brokerage Arif Habib Ltd stated that another significant downturn marked post-election declines, totalling -4.88%.

Later Monday, MSCI will announce the results of the February 2024 Index Review, which could potentially benefit Pakistan concerning passive flows by the end of the month.

February continues to demonstrate its seasonal weakness for Pakistan equities, and until there is clarity on the political situation, the bias remains tilted to the downside. A break of structure in the near term targets 59k as the next significant level, stated the brokerage.

K-Electric Ltd. remained the volume leader with 50.348 million shares which closed lower by 44 paisas to Rs4.21 per share. WorldCall Telecom followed it with 34.623 million shares, which closed lower by 7 paisas to Rs1.21 per share. Other significant turnover stocks included Oil & Gas Dev., Hascol Petrol, Pak Petroleum, Fauji Foods Ltd, Pak Elektron, Cnergyico PK, B.O. Punjab, P.I.A.C. (A). In Future’s Market, 328 companies recorded trading, of which 6 increased, 320 decreased and 2 remained unchanged.