Shares at the Pakistan Stock Exchange (PSX) opened in the red on Monday, with the benchmark KSE-100 index falling below the 40,000 points mark. Analysts attributed the slump to political and economic uncertainty and an expected increase in the policy rate.<\/p>\n
The KSE-100 index lost 403.28 points, or one per cent, to reach 39,920.17 points at 12:29pm.<\/p>\n
Topline Securities CEO Mohammad Sohail said share prices fell because of rising political noise and investor concerns about the country\u2019s low foreign reserves.<\/p>\n
First National Equities Limited Chief Executive Ali Malik noted that volumes were very low and buyer interest was absent due to political and economic uncertainty.<\/p>\n
He also attributed the slump to expectations that the interest rate would be raised by 1-2pc at the upcoming meeting of the central bank\u2019s Monetary Policy Committee, which he said would weaken companies\u2019 profitability.<\/p>\n
\u201cThe market is panicking. It is not stabilising and the main reason is the dissolution of the Punjab Assembly and the talk of moving a no-confidence motion against Prime Minister Shehbaz Sharif,\u201d commented former PSX director Zafar Moti.<\/p>\n
He added that an increase in the benchmark interest rate would also have a negative impact on share prices. He also cited the situation at the ports, where import containers have been stuck for weeks as the central bank imposed curbs to limit the outflow of dollars amid the severe cash crunch.<\/p>\n
\u201cWe cannot see the economy improving in the future and the political crisis in worsening,\u201d he said.<\/p>\n
Alpha Beta Core CEO Khurram Schehzad also agreed with Moti\u2019s view, saying he could not see much improvement in the near future because of a lack of clarity.<\/p>\n
The stock market could rise again once the International Monetary Fund\u2019s ninth review was completed and foreign inflows were visible, he said. \u201cThe sentiment is very weak and investors are not aggressive despite good valuations,\u201d he noted.<\/p>\n
The KSE-100 index had closed 684 points down last week due to political uncertainty after Punjab Chief Minister Parvez Elahi formally advised the governor to dissolve the provincial assembly.<\/p>\n
The Punjab Assembly stood dissolved on Saturday and a caretaker chief minister is yet to be appointed.<\/p>\n
Meanwhile, Khyber Pakhtunkhwa Chief Minister Mahmood Khan has said that a summary for the dissolution of the provincial assembly would be sent to the governor on Jan 17 (tomorrow). He said that the country was moving towards general elections and claimed that the PTI would sweep the upcoming elections.<\/p>\n
Meanwhile, the country\u2019s forex situation has worsened with the State Bank of Pakistan\u2019s (SBP) reserves falling to $4.34 billion, the lowest since February 2014.<\/p>\n
The country has been facing a serious dollar shortage, which is resulting in restricted imports of even food and industrial raw materials. The latest position of foreign exchange reserves reflects that the country doesn\u2019t have sufficient dollars to cover even one month of average imports.<\/p>\n","protected":false},"excerpt":{"rendered":"
Shares at the Pakistan Stock Exchange (PSX) opened in the red on Monday, with the benchmark KSE-100 index falling below the 40,000 points mark. Analysts attributed the slump to political and economic uncertainty and an expected increase in the policy rate. The KSE-100 index lost 403.28 points, or one per cent, to reach 39,920.17 points […]<\/p>\n","protected":false},"author":2,"featured_media":307809,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-307804","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n