Staff Report
KARACHI: Early trade on Thursday saw a more than 600-point decline in shares at the Pakistan Stock Exchange (PSX), with analysts blaming the ninth review of the International Monetary Fund (IMF) and growing political unrest for the decline.
The benchmark KSE-100 index was 41,124.12 points at 10:21 a.m., having dropped 613.5 points, or 1.47 percent. According to Raza Jafri, head of equity at Intermarket Securities, market sentiment was negative due to concerns that the release of the IMF tranche might be postponed until next year.
IMF Programme
Pakistan committed to a $7 billion IMF program in 2019, which was initially increased to $6 billion. While the ninth review of the program is still pending, the government and IMF are presently negotiating over the internet to release $1.18 billion.
In 2019, Pakistan agreed to a $7 billion IMF program that was initially increased to $6 billion. The government and IMF are currently negotiating over the internet to release $1.18 billion while the ninth review of the program is still pending.
The talks, initially scheduled for the final week of October, were moved to November 3 and continued to experience delays due to discrepancies in the two parties’ estimates.
“Valuations are certainly low, but there may be ongoing pressure from redemptions today, with tail-end flows shifting toward fixed income,” Jafri continued.
Siddique Dalal, CEO of Dalal Securities, claimed that the PSX dropped due to Engro Corp.’s buyback and other companies’ redemptions.
The director of First National Equities Limited, Amir Shehzad, stated that political unpredictability was the main cause of the downturn.
For the fall, there were a few causes. One is the declaration made by [PTI Chairman] Imran Khan that he will announce on the 17th when he intends to dissolve the [Punjab and Khyber Pakhtunkhwa] assemblies. The market is under a great deal of pressure as a result of the significant political uncertainty.
secondly, the problems with the IMF have not yet been fixed,” adding that the talk of default also impacted the market’s mood.
