KARACHI: Investors at the stock market, trapped in a tight bear hug, suffered losses for third day in a row as the KSE-100 index declined by 171.11 points (0.49 per cent) to close at 34,716.53.
The index has sunk by 2,400 points in two weeks which has wiped off much of the value of investors’ portfolio. But with just bad news and uncertainty ahead, stock holders are in a dilemma whether to hold or book losses and seek an exit.
While market is impatiently waiting for the official announcement on what has transpired in meeting with the International Monetary Fund on bailout, traders and analysts continue to spread what looks like leaked information on IMF conditions for the package.
Massive increase recommended in electricity and gas prices; Rs700 billion of tax exemptions to be withdrawn; interest rate hike to at least 12pc and further devaluation of rupee. It would be followed by the budget 2019-20, likely to be loaded with heavy new taxation, all of which will hit corporate profitability.
Other developments ahead that spook investors included the Financial Action Task Force meeting results; MSCI review and SBP monetary policy, all due within weeks. The National Accounts Committee came up with the report that GDP growth for 2018-19 has remained at 3.3pc, far below the government’s target of 6.2pc.
During trading, the index hit intraday low by 240 points but recovered a little before close. The volume stood at a half of the previous day to 39.3 million shares while traded value slumped 53pc to $12.4m.
Sector-wise, cement, banks, oil marketing companies, refinery, exploration and production and fertilisers contributed most to selling pressure. Among scrips, major laggards were Pakistan Oilfields, down 2.27pc, Engro Corporation 1.05pc, Pakistan Petroleum 1.02pc, Searle Company 5pc, Habib Bank 0.74pc, Colgate-Palmolive Pakistan 5pc, United Bank 0.86pc and Oil and Gas Development Company 0.61pc. On the flip side, Nestle Pakistan, up 4.96pc, MCB 1.54pc and Allied Bank 4.04pc added 73 points.
