KSE-100 drops to lowest level since March after 648-point fall

Pakistan's KSE-100 Index fell to the level last seen in March as a 648-point retreat put it at 43,829, with across-the-board selling amid low volumes dragging the benchmark lower by 1.46% on Monday.

The index went as low as 43,721, a fall of 756 points in intra-day trading, with refinery, cement, and technology stocks all dragging the benchmark in the red.

At close on Monday, the KSE-100 settled with a loss of 1.46% or 647.89 points to finish at 43,829.35. This is the lowest closing since mid-March when the index was hovering around the same level.

"Talks with the International Monetary Fund (on the Extended Fund Facility) are causing some uncertainty," Tahir Abbas, head of research at Arif Habib Limited, told Business Recorder.

"There should be clarity on it soon. The market is expected to bounce back.”

However, while expectations remain of a possible recovery, the market capitalisation of the Pakistan Stock Exchange (PSX) has fallen close to 17% in four months, from $54 billion to $45 billion.

Topline Securities CEO Mohammed Sohail said, despite record earnings of KSE-100 companies, market cap has continued to fall, while the index is down 10%.

“Record earnings growth of 60% last year not helping also. Fear of foreign selling, falling PKR, rising interest rate,” tweeted Sohail, citing reasons for the fall.

Pakistan's stocks have been under pressure since June with high commodity prices, rupee depreciation, and inflation readings taking their toll on investor sentiment.

Uncertainty over talks with the IMF have also added to concerns, with investors jittery over the future course of the programme.

Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company, said the bearish trend is “temporary”.

“Concerns regarding the IMF meeting, volatile geopolitical situation, and the rise in interest rates are playing on the minds of the investors,” Tariq told Business Recorder.

“The agreement with the IMF will bring much-needed clarity in the market.”

Finance Minister Shaukat Tarin is scheduled to leave for Washington DC on October 12 to attend the annual meeting of the World Bank and IMF scheduled from October 11 to 17. It is not clear whether Tarin will hold policy level talks after or on the sidelines of the annual meeting.

IMF talks on power sector reform pace remain inconclusive

However, talks at the technical level between Pakistani authorities and the IMF reportedly remained inconclusive on the pace of power sector reforms with the latter reportedly expressing concern over non-implementation of the tariff agreed during the second to fifth review talks held in February 2021.

On Monday, sectors dragging the benchmark KSE-100 index lower included technology and communication (197.64 points), cement (109.79 points), and banking (71.51 points).

Volume on the all-share index increased from 176.07 million on Friday to 226.57 million on Monday. The value of the shares trade also recovered, amounting to Rs8.27 billion from Rs6.84 billion on Friday.

WorldCall Telecom was the volume leader with 41.36 million shares, followed by Telecard Limited with 13.89 million shares, and Treet Corp with 9.37 million shares.

Shares of 548 companies were traded on Monday, of which 61 registered an increase, 470 recorded a fall, while 17 remained unchanged.