The Pakistan Stock Exchange (PSX) on Monday kicked off on a positive note, hitting the day’s high of +511 point on early excitement of Pakistan reaching a deal with the International Monetary Fund (IMF) on a 39-month Extended Fund Facility (EFF) programme of $6 billion. However this positivity couldn’t last long, as the market came under pressure from the likely redemptions in mutual funds, making an intraday low of -937 points to close at the 33,900 level, down 816 points.
As many as 89.9 million shares of the benchmark companies, worth Rs 4.7 billion, changed hands during the session.
An equity analyst at Next Securities said the market opened on a buoyant note and went more than 500 points positive before the panic-prone investors started to jettison shares amid the tough conditions attached with the IMF bailout package for which a staff level agreement was reached the other day. As a result of the attached conditions by IMF, heavy taxation is to be slapped on the consumers to improvise the target collection by a further Rs 650bn-Rs700bn triggering further inflationary pressures and slowing down economic growth, he said.
Major contribution to the declining index came from FFC (-5%), OGDC (-2.7%), POL (-4.4%), ENGRO (-2.0%) and PPL (-2.0%). Selling pressure was witnessed across the board, however broader damaged was done by cements and E&P stocks. DGKC (-5%), PIOC (-5%), MLCF (-5%), CHCC (-5%), LUCK (-2.1%), OGDC (-2.7%), POL (-4.4%) and PPL (-2.0%) were the major laggards of the aforementioned sectors.
Volumes improved by 209 percent DoD, standing at 121 million shares for the day as compared to 39 million shares traded in the previous session.
KEL (-5.7%), MLCF (-5%) and BOP (-6.6%) led the volume with ~24 million shares changing hands throughout the day. Maaz Mulla, an equity analyst, expects the market to remain negative on the back of concerning economic indicators. Hence, he recommends investors to remain cautious in trading.