PSX plummets more than 500 points as uncertainty surrounds IMF deal – Business

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The bears were tightly controlled on the Pakistan Stock Exchange on Thursday – the second day in a row – as the KSE-100 index benchmark traded more than 500 points during intraday trading.

The market opened with 42,863.15 points and the KSE-100 index gained 63.81 points rising to a peak of 42,927.96 at about 9.30am, only a sharp decline to 42,621.51 points at 9:39am. Shortly after noon, the index fell to a low of 42,313.99 after losing 549.16 points from the opening day price.

Today’s decline comes just days after the PSX saw a meltdown at a time when the KSE-100 lost 1,100 points in intraday trading.

According to stockbroker Zafar Moti, there are many factors that have caused the investor to think, which is why PSX is seeing a steady decline.

“There are reports that interest rates will increase by 2%, forcing investors to sell shares,” he said, adding that “the level of market support” is also declining and the rate of savings has also been affected. investor confidence.

Meanwhile, Alpha Beta Core Chief Executive Officer Khurram Schehzad said market pressure on the market would continue until the government concluded an agreement with the International Monetary Fund (IMF).

Explaining the downturn in the world market, he said the State Bank of Pakistan’s next monetary policy would determine the future of the market.

“If the interest rate hits, the market could fall into new lows,” he said. “But that is a Saudi agreement [is finalised] and the IMF is expanding [the size of] The loan system, the pressure on the market can be reduced, ”he added.

It was morningAn editorial on Wednesday noted that the most important factor in the erosion of investors’ minds has been 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 remains indecisive with regard to the conversion of unstable energy subsidies, a ‘preliminary step’ that the IMF requires it 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 has now twice rejected the summary of the Oil and Gas Regulatory Authority 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.

The PML-N coalition government has strongly criticized the Imran Khan government for “suspending” the IMF program with petroleum subsidies but even though he has been in office for a month, he has not withdrawn funding. The finance minister has always said that these grants are impossible and cost R120 billion a month.

Ismail said petrol should have been priced at R245 a liter according to a previous agreement with 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. .

Furthermore, the editor pointed out that there were differences in the PML-N over how to deal with the Fund, with former finance minister Ishaq Dar, who opposed the IMF ‘dictation’, seeking a new ‘simplified’ loan. “If the finance minister’s reins are drawn in London, then Finance Minister Miftah Ismail will have his hands tied.”

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