PSX plunges more than 500 points to three-year lows

The capital market declined to a three-year low on Monday, as investors remained on the sidelines on worries over expected imposition of tough conditions by the International Monetary Fund (IMF) to give Pakistan fresh loans, dealers said.

Salman Ahmad, head of institutional sales at Aba Ali Habib said that uncertainty over the International Monetary Fund (IMF) conditions triggered selling pressure. The market men were undecided and the daily volume reached to historic level, which hints investors were staying away from the market.

“Till the fate of conditions and package amount has not been unveiled, the share market (will remain) lethargic with low volumes,” he said. Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index lost 1.43 percent or 517.53 points to close at 35,605.42 points level. KSE-30 shares index followed suit with a low of 1.68 percent or 287.07 points to end at 16,790.40 points level.

Of 329 active scrips, 60 moved up, 250 retreated, and 19 remained unchanged. The ready market volumes stood at 71.418 million shares, as compared with the turnover of 64.335 million shares in the previous session.

Madiha Javed, head of research at Ismail Iqbal Securities said, “The KSE-100 index remained bearish throughout the session today. Over the weekend, Dr Reza Baqir replaced Tariq Bajwa as governor of SBP, while Jehanzeb Khan was removed as FBR chairman.”

US President Trump declared intention to increase tariff rates to 25 percent on $200 billion of goods, which overshadowed international markets on Monday.

E&Ps, commercial banks and fertilisers were the major draggers of KSE-100 index, shedding 298 points. Overall, the index lost 517.53 points to close at 35,605.42 points, which was the lowest level since May 5, 2016.

Topline Securities Chief Economist Saad Hashmey said that selling pressure was seen over fears that the country, after joining hands with the IMF, would take some more bitter measures, including rupee devaluation, interest rate hike, and increase in gas and electricity tariff.

Another factor which led to sharp cuts in the share price was news circulated in the electronic media, that the government might make changes in the top hierarchy of mutual funds such as NAFA, which also led to some redemptions, a leading trader said.

Cement companies were under tremendous pressure on a report that during the quarter, the sector recorded declines. According to the report of Topline Securities Pakistan, cement industry in third quarter of the current fiscal year posted its lowest gross margins of 23.6 percent since 2011 amid higher input costs, lower high margin, local demand, and weak pricing power.

The highest gainers were Colgate Palmolive, up Rs99.00 to close at Rs2,097.00/share, and Agriautos Industries, up Rs11.12 to finish at Rs233.88/share. Companies that booked highest losses were Sapphire Fiber, down Rs35.17 to close at Rs668.33/share, and Siemens Pakistan, down Rs23.00 to close at Rs680.00/share.

Maple Leaf recorded the highest volumes with a turnover of 6.438 million shares. The scrip lost Rs1.33 to close at Rs26.49/share. The lowest volumes were witnessed in Engro Fertilizer, recording a turnover of 1.771 million shares, whereas the scrip lost Rs0.26 to end at Rs68.00/share.