ISLAMABAD: Pakistan Stock Exchange has crashed once again on Monday (May 16) and lost over 1000 points at 10:23am amid uncertainty on the economic front as the government did not outline its economic policy and future course of action pertaining to IMF programme. The US dollar further edged up in the inter-bank and its value increased to 194 rupees on Monday during intra-day trading while in the open market the dollar-rupee exchange rate has crossed 195 rupees level for the first time.
The KSE-100 benchmark index fell to 42,434 points (2.42 percent fall in market capital). The market traded 1.216 billion rupees shares at 10:23am on Monday and the number of traded shares amounted to 25.549 million. On Friday, the market closed with 500+ points gain while today the Pakistan Stock Exchange opened on a positive note with 43,486 points and maintained this level from 8am to 9:30am. However, after an hour and a half (at 9:30am), market manipulators suddenly remembered the uncertainty on the economic front and bulldozed the positive sentiment, pushing down index by more than one thousand points in less than an hour.
Panic in the stock market seems to be a pressure tactic on the government to rush to IMF to revive the stalled programme overlooking its impact on the consumers and economy.
On Friday, the KSE-100 index gained more than 500 points, closing at 43,486 points, but today the market players thought it fit to raise the issue of uncertainty and lack of decision on the part of the government about the IMF, economic plan and future strategy about the next general elections.
Uncertainty in the stock and capital market has boosted value of dollar above 193 rupees in the inter-bank and over 194 rupees in the open market.
Rumours about delay in the government-IMF talks are encouraging the trend of dollarization in Pakistan. Market is awaiting positive news from the government about talks with IMF and disbursement of financial assistance from some friendly countries.
Also, on Monday (May 9), the Pakistan Stock Exchange 100-index had already lost more than 1500 points. Analysts have urged the allied government to expedite the process of talks with the IMF for the resumption of enhanced loan, involving $8 billion loan.
Analysts are of the opinion that the government would have to enhance petroleum and electricity prices ahead of fresh talks with the IMF to pave the way for seventh review of the economy of the country.
It is worth noting that the stock market in the country demonstrated a dismal behavior from the day the National Assembly was dissolved on the advice of Prime Minister Imran Khan soon after the unconstitutional dismissal of no-trust move by the deputy speaker Qasim Suri on April 3.
After showing short gains when the new government was formed, the capital market has become vulnerable to rumours as the government remained undecided on reversing the subsidy programme of Imran Khan government. IMF has linked the resumption of talks with reversal of the Khan’s subsidy programme and the allied government’s inability to make a decision on this crucial front has created panic in the capital markets in the country.
