The Bears had strong control over the Pakistan Stock Exchange (PSX) on Monday as the KSE-100 index benchmark traded at 1061.98 points in the first hour of trading.
According to the PSX website, the KSE-100 Index opened with 43,486.46 points and fell sharply by 806.95 points. At 10am, the index dropped by more than 1,000 points to 42,424.48, down 2.44 percent.
The fall comes a day after Finance Minister Miftah Ismail announced that the government would not increase fuel prices “for now”, returning to the important pre-condition set by the International Monetary Fund (IMF) to restart its lending program.
Ismail said he would talk to the IMF and find a solution, adding that Prime Minister Shehbaz Sharif “does not want to impose this burden. [increased oil prices] to the people “.
“I advised her to expand [petrol] prices but said people could not bear it, ”said the finance minister.
However, he emphasized that petrol prices could “change at any time in the future” in light of global prices.
Arif Habib, chairman of the Arif Habib faction, said Parhlo.com today that the government had to make tough decisions to bring short-term stability to the market. “The IMF approach needs to be urgently addressed by removing funding for petroleum products, otherwise it will be difficult to regain confidence in investors,” he said.
“The stock market also offers good returns in these situations. However, the recent decline in investor confidence is due to delays in government decisions on economic matters,” added Habib.
Meanwhile, First National Equities CEO Ali Malik stressed that financial institutions should increase and support the stock market.
“Monetary policy on May 23 is important for the market,” he said. “There are reports of up to 2 percent interest on the market. If this happens, the collapse of the PSX will continue.”
The government’s commitment keeps the economy afloat
The PSX and the rupee both came under pressure last week as the new coalition government failed to make sound economic decisions, the most prominent of which was the withdrawal of oil subsidies.
Analysts and experts have linked economic pressures and uncertainties over the continuation of the IMF loan program linked to rising oil imports and increasing trade deficits.
On Friday, the greenback rose above Rs193 in the interbank market, reached a new all-time high and broke its previous day record of Rs192. This was the fourth day in a row that the dollar rose to a record high against the rupees.
On the other hand, the PSX lost 1,447.67 points last week in the so-called “blood bath”. The declining trajectory continued for the week and ended on Friday when the benchmark index closed at 35.29 points, or 0.08 percent, up.
It was morning The editorial article on Wednesday noted that the main cause of the erosion of investors’ emotions was the failure of the new coalition government to come up with a credible strategy to take tough political decisions to reform the economy. For example, it has continued to make decisions against the reversal of oil and renewable energy subsidies, a ‘preliminary step’ that the IMF wants to take before it can agree to restart funding.
In a recent meeting with the new finance minister, the IMF linked the continuation of its borrowing program with the transformation of petroleum subsidies, introduced by the previous government. However, Prime Minister Shehbaz Sharif yesterday rejected another summary by the Oil and Gas Regulatory Authority and the finance minister to raise fuel prices.
PTI announced a four-month suspension of petrol and electricity tariffs (until June 30) on 28 February as part of a series of measures to bring relief to the community.
Meanwhile, even after taking office last month, the PML-N and other parties to the new coalition government strongly criticized Imran Khan’s government for “abolishing” the IMF program with non-oil funding. But despite being in power for more than a month, the parties have not yet withdrawn funding; although the finance minister has repeatedly said that these grants are impossible and cost R120 billion to the government per month.
Earlier this month, Ismail said petrol should have cost R245 per liter according to an agreement reached between the previous government and the IMF. However, the PML-N government was still selling it for R145 a liter and will do its utmost to maintain that value, he added – a sign that the new government is finding it difficult to make a decision that may be unpopular with its voters. .
In a program published on Friday, It was morning said the PML-N was caught in a “private consultation” – a guide for senior leaders’ travels to London to meet with Nakaz Sharif – as fears continue to grow due to its inability to begin economic recovery.
The editor called on the PML-N to make a firm decision on its future, saying: “It’s time to dump her and move on.” As the government decides not to increase fuel prices again, economic sentiment is expected to continue to decline.
