Market records decline of 1,878 points on political uncertainty

KARACHI: Pakistan Stock Exchange (PSX) witnessed its 9th largest daily decline in its history on Monday as uncertainty pertaining to the election results took a toll on the market, with the benchmark KSE-100 Index losing 1,878.43 points (-2.98 percent) to close at 61,065.31 points.
This was the second consecutive drawdown in absolute terms for the index after plunging by 1,200 points on Friday. The sell-off comes as investors’ confidence has taken a significant hit due to the election outcome pointing towards increased political instability. The country needs to secure a larger and longer International Monetary Fund (IMF) loan programme to meet its high debt obligations; however, continued political instability could put this in jeopardy, raising default risk.
Arif Habib Limited in a note said the KSE-100 index remained in negative territory for two consecutive trading days following the election, experiencing a cumulative decline of 3,079 (down 4.8%).
Samiullah Tariq, the head of research at Pak-Kuwait Investment Company, attributed the loss to the “uncertainty regarding the formation of the government”. Market analysts, such as Muhammad Sohail of Topline Securities, attributed the initial decline to the “unexpected” election results, which deviated from pre-election expectations. This uncertainty triggered a massive sell-off, with the benchmark KSE-100 index losing 3% at its lowest point, he added.
The benchmark index traded in a range of 1,986.7 points, showing an intraday high of 62,634.37 points and an intraday low of 60,647.67 points. Among other indices, the KSE All Share Index shed 1,226.29 points (-2.97 percent) to close at 41,355.32 points. Similarly, the KMI All Share Islamic Index shed 1,062.84 points (-3.55 percent) to close at 29,903.93 points.
Total volumes traded for the KSE-100 Index increased by 49.11 million to 200.89 million shares against 151.78 million shares a session earlier. The overall market volumes increased by 91.91 million to 349.98 million shares against 258.07 million shares a session earlier. Among scrips, KEL topped the volumes with 50.35 million shares, followed by WTL (34.62 million) and OGDC (14.94 million). Stocks that contributed significantly to the volumes included KEL, WTL, OGDC, HASCOL, and PPL, which formed around 36 percent of total volumes.
A total of 349 companies traded shares in the stock exchange against 317 a session earlier, out of which shares of 32 closed up, shares of 298 companies closed down while shares of 19 companies remained unchanged. A total of 91 companies traded shares in the KSE-100 Index against 89 a session earlier, out of which share prices of 4 companies closed up, 84 companies closed down and one remained unchanged. The number of total trades increased to 160,369 from 132,240 a session earlier, while the value traded increased by Rs0.22 billion to Rs12.75 billion remained Rs12.53 billion.
In terms of rupee, PHDL remained the top gainer with an increase of Rs28.47 (+6.66 percent) per share, closing at Rs455.68. The runner-up remained IBFL, the share price of which climbed up by Rs10 (+2.5 percent) to Rs410. MARI remained the top loser with a decrease of Rs127.1 (-5.59 percent) per share, closing at Rs2,147.01, followed by HPL, the share price of which fell by Rs80 (-5.71 percent) to close at Rs1,320 per share.
The major sectors taking the index towards south remained oil & gas exploration companies (498 points), commercial banks (243 points), cement (164 points), oil & gas marketing companies (133 points), fertilizer (132 points), power generation and distribution (127 points), technology and communication (96 points), food and personal care products (49 points), and refinery (49 points).
Ten major companies depriving the index of points remained OGDC (115 points), PPL (96 points), MARI (57 points), HUB (44 points), LUCK (38 points), PSO (36 points), EFERT (35 points), ENGRO (28 points), and BAHL and SYS (26 points each).- TLTP