The ongoing political and economic unrest caused shares at the Pakistan Stock Exchange (PSX) to decline for the second day in a row on Tuesday.
The benchmark KSE-100 index dropped 1038.79 points, or 2.54%, to 39,932.03 points at 1:58 pm.
Dalal Securities CEO, Siddique Dalal claimed that the index dropped for several reasons, including concern over the dissolution of the Punjab and Khyber Pakhtunkhwa assemblies and an increase in a political conflict that had eroded investor confidence.
He noted that the market was also impacted by mutual fund redemptions at year’s end, the economy’s deterioration, pressure on the rupee, a dollar shortage, and the delay in the IMF’s ninth review’s completion.
There is little chance of the market improving in the future because of all these variables, according to Dalal.
First National Equities Limited Director Amir Shehzad said that “Several problems have gathered, including a shortage of dollars, but political unrest and the upcoming dissolution of [two provincial] assemblies continue to be the main causes. Additionally, there is pressure on foreign reserves.
PSX former director Zafar Moti concurred that political unpredictability was the “clear” cause of the stock market’s downward trajectory. He added that the decline was caused by rumours of default.
Moti bemoaned the fact that, unlike previous crises, where senior capital market participants were gathered by the PSX management to resolve problems and dispel rumours, nothing had taken place recently.
The ninth assessment of a $7 billion IMF program is still outstanding, and remote negotiations between IMF staff and the government over the release of $1.18 billion have made the situation even more serious.