May 23, 2023
ISLAMABAD – Stocks fell on Monday amid political polarisation and speculation that Staff Level Agreement (SLA) with International Monetary Fund (IMF) over a long-awaited bailout tranche may not materialise after all.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index opened on a positive note but turned bearish within minutes and maintained a steady decline through the day, eventually shedding 404.12 points, or 0.97 per cent, to close at 41,195.06 points.
Mohammad Arbsh, manager equities with Siddiqsons Limited, said that the expectations of new taxation with the upcoming budget coupled with Imran Khan’s statement that there are 80 per cent chances that he would be arrested on Tuesday sent the market on a downward spiral.
Meanwhile, Aba Ali Habib Securities’ Salman Naqvi said political polarisation and crucial court summons this week have made the market uncertain, and due to which despite having attractive rates there is no buying and the volumes have also diminished.
Additionally, the dollar being traded at Rs.308 against the rupee as well as the increased inflation numbers last week present an alarming situation, he said.
He also mentioned speculation that the IMF staff level agreement could be in jeopardy as the IMF has put forth conditions that cannot be fulfilled.
However, Naqvi said the condition may stabilise if the political situation improves, the SLA is signed and the upcoming monetary policy is reasonable.
Echoing the same sentiments, head of equity at Intermarket Securities, Raza Jafri, said the uncertain economic and political conditions is unnerving investors.
Moreover, the fear of failure to get IMF loan has put a fear of default back into focus, he added.
“This is reportedly leading to the rupee facing renewed pressure in open market and the weak sentiment is reflecting in equities also — evident in today’s 1 pc fall,” Jafri said.