Pakistan bourse closes red over Assembly dissolution

Pakistan bourse closes red over Assembly dissolution

Pakistan bourse closes red over Assembly dissolution
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KARACHI: The Pakistan Stocks witnessed a massive sell-off session after the National Assembly’s dissolution where Pakistan will start gearing up for fresh elections in the next 90 days under a caretaker Prime Minister.
“The investors’ interest remained dwindled throughout the day on the concerns of dark political weather. Cumulatively, the banking, cement, and technology sectors eroded 628 points from the Index,” an analyst at Pearl Securities said.
The Pakistan Stock Exchange KSE-100 shares Index shed 2.77 per cent, or 1,250.06 points, to close at 43,902.05 points. The KSE-30 shares Index shed 2.91 per cent, or 534.12 points, to close at 17,049.99 points.
As many as 305 scrips were active of which 26 advanced, 268 declined and 11 remained unchanged.
The ready market volumes stood at 170.48 million shares compared with the turnover of 389.11 million shares in the last trading session.

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The Country’s political saga took a surprising turn over the weekend as Pakistan’s President approved the dissolution of the National Assembly on Prime Minister Imran Khan’s advice. Khan then announced early elections, likely within the next 3 to 6 months.
Most notably, the Supreme Court of Pakistan (SCP) has scheduled a hearing on the Suo Moto notice taken by the Chief Justice over the incident. Any parliamentary actions thereafter will be subject to the court’s orders.
KASB Securities Yousuf Rehman said that the decision to dissolve the national assembly was likely a credit-negative event for the economy.
“Considerable risks to announced reforms have arisen, including fiscal reforms and planned revitalisation of the energy sector. Moreover, concerns of delays in the upcoming federal budget will drive sentiments of further delays in the International Monetary Fund (IMF) tranche’s approval.”
The scenario is evidenced by the rising international bond yields of Pakistan securities, whose yields have surged past 16 per cent, compared with 5 per cent a few months prior.
Moreover, Pakistan’s credit default swap (CDS spreads have also crossed the 10 per cent mark, a rise of 6pps from a month prior.
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Month to date, the foreign investors have offloaded $28 million worth of equities, and analysts expect the potential outflows to gain pace in the coming weeks as the political situation unfolds.
An analyst at Arif Habib Limited said the KSE-100 Index experienced a bloodbath session throughout the day due to political unrest.
“A significant decline was observed in the volumes of the market as well. Across the board selling was witnessed. The main board volumes remained subdued. On the flip side, hefty volumes were recorded in the 3rd tier stocks.”
The highest volumes were witnessed in Telecard Limited with a turnover of 17.39 million shares. The scrip shed 57 paisas to close at Rs13.86/share, followed by K-Electric with a turnover of 16.01 million shares. It shed 18 paisas to close at Rs2.92/share. TPL Properties remained the third with a turnover of 12.55 million shares. It shed Rs1.56 to finish at Rs19.26/share.

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