Friday July 12, 2024

Stocks tumble as investors fret about political uncertainty

By Our Correspondent
July 19, 2022

Stock plunged 1.68 percent on Monday as uncertainty grew over the government’s economic plans to continue IMF bailout programme after a shocking win of former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party in Punjab’s by-elections.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index fell by 707.80 points to close at 41,367.11 points against 42,074.91 points recorded in the last session. The highest index of the day remained at 42,074.91 points while the lowest level of the day was recorded at 41,274.62 points. KSE-30 index also shed by 304.49 points or 1.90 percent to 15,746.13 points compared with 16,050.62 points recorded in the last session.

Traded shares rose by 11 million shares to 151.351 million shares from 140.118 million shares. The trading value decreased to Rs4.357 billion from Rs5.374 billion. Market capital narrowed to Rs6.945 trillion from Rs7.044 trillion. Out of 326 companies active in the session, 55 closed in green, 253 in red while 18 remained unchanged.

Analyst Ahsan Mehanti Arif Habib Corp, said the market witnessed massive pressure in scrips across the board on political uncertainty and record slump in rupee after PML-N lost to opposition in Punjab province in by-polls.

“IMF's unexpected delay over the release of tranche to next two to three weeks and uncertainty over funding from friendly countries to support plunging rupee also supported bearish outlook.”

The market opened on a negative note and stayed in the red zone during the whole day. “In addition to the selling spree at the PSX, rupee also had a massive loss of 2.16 percent against the greenback so far over the uncertainty on the IMF program front by traded at 215.50 level, down Rs4.55 against the dollar.

Topline Securities in its post market report said equities commenced the week on a bearish note on the backdrop of increasing noise on the political front after the surprise clean sweep victory of PTI (Opposition party to the ruling coalition) in the by-election held in the biggest province in the country.

Fertilizer, cement, power and banks sector contributed negatively to the index where FFC, LUCK, HUBC, ENGRO & HBL lost 200 points, cumulatively. On the flip side, ABOT, SML and HINOON witnessed some buying interest as they added 12 points collectively.

The highest increase was recorded in shares of Allawasaya Tex, which rose by Rs162.38 to Rs2,350 per share, followed by Premium Tex., which increased by Rs20 to Rs849.99 per share. A significant decline was noted in shares of Rafhan Maize, which fell by Rs150 to Rs9,800 per share, followed by Mehmood Tex., which decreased by Rs45 to Rs755 per share.

Brokerage Arif Habib Ltd said the benchmark index witnessed a bloodbath session over prevailing political uncertainty in the country. “The market opened in the negative zone and remained under pressure throughout the day as investors opted for panic selling due to rupee devaluation,” it added. “The mainboard volumes remained dull although hefty volumes were observed in the 3rd tier stocks.”

WorldCall Telecom remained the volume leader with 12.730 million shares that dropped by 7 paisas to Rs1.36 per share. It was followed by K-Electric Ltd. with 10.311 million shares that decreased by 3 paisas to Rs3.05 per share.

Other stocks that recorded significant turnover included TPL Properties, Pak Refinery, Cordoba Logist, Cnergyico PK, Unity Foods Ltd, Sui North Gas, Pak Int. Bulk and Pak Elektron. Shares’ turnover in the future contracts decreased to 45.558 million shares from 47.990 million shares.