Amid IMF uncertainty, KSE-100 suffers 715-point fall

Uncertainty regarding talks with the International Monetary Fund (IMF) dented market confidence, as the benchmark KSE-100 Index finished 715 points or 1.52% lower to settle at 46,400 on Tuesday.

The market was under pressure soon after opening, and continued to fall, suffering an over 800-point fall in intra-day trading.

At close, the KSE-100 Index settled with a loss of 715.13 points or 1.52 % to finish at 46,399.91 points.

KSE-100 ends 181 points lower as investors remain concerned

“News regarding uncertainty over talks with the IMF led to this bearish trend in the market,” said Sana Tawfik, an equities analyst at Arif Habib Limited.

She added that the statement of Advisor to Prime Minister on Finance and Revenue Shaukat Tarin regarding State Bank of Pakistan’s (SBP) autonomy have also stressed investors in both equity and forex markets.

“Market will remain range-bound until clarity from the IMF front is not attained,” added Tawfik.

Last week, Tarin told the media that the IMF would make the announcement regarding the resumption of the Extended Fund Facility (EFF) for Pakistan in a day or two.

However, the market keeps awaiting clarity on the IMF announcement, under which $1 billion will be released for Pakistan.

Tarin also said that a constitutional amendment would be required to pave way for the approval of the SBP Amendment Bill, 2021 in its present form but the government lacked the two-thirds majority in parliament.

Tarin revealed that approval of the amendment bill was the condition that was hampering a deal between Pakistan and the IMF.

Meanwhile, Tawfik said foreign selling is also adding to the already negative sentiment, as Pakistan is expected to move into the MSCI Frontier Market in the coming days.

“MSCI reclassification is also a factor,” said Tawfik, adding that the Current Account Deficit (CAD) figures are expected to decline on a monthly basis, but the inflation rate is projected to remain over 9%.

On the local front, local cement dispatches declined by 5% YoY for October where Northern region witnessed a decline of 8% YoY while South posted an increase of 11% YoY.

Meanwhile, volume on the all-share index increased significantly to 434.69 million on Tuesday from 364.89 million on Monday. The value of the shares trade also improved, amounting to Rs14.27 billion from Rs12.79 billion on Monday.

Telecard Limited XB was the volume leader with 33.51 million shares, followed by Fauji Foods (R) with 28.81 million shares, and First National Equities with 25.35 million shares.

Shares of 359 companies were traded on Tuesday, of which 48 registered an increase, 296 recorded a fall, while 15 remained unchanged.