Political turbulence caused the indexes to begin in the red, falling to a day’s low of 40,814.56 down 486 points. The benchmark index did however record a little comeback to close at 40,970.82 a loss of 330.66 points or a decrease in the percentage of 0.8 percent. The benchmark KSE-100 Index lost 0.8 percent. This continued to dampen investor morale at the PSX which has been affected by ongoing political unrest.
The KSE-100 was weak, according to market experts, because of ongoing political unrest and limited foreign exchange reserves. They said that there was perhaps too much noise in politics and with the threatened dissolution of two provincial assemblies.
They stated that until there was clarification investor mood was anticipated to remain negative and trading activity to be light and the downturn in the stock market was also a result of political unrest, they said.
A huge political crisis would be created if two provincial assemblies were dissolved as the economic fundamentals have been weak and the shortage of dollars persisted.
PTI Chairman Imran Khan announced on Saturday that the administrations of his party in Punjab and Khyber Pakhtunkhwa will dissolve their legislatures on December 23 to allow for new elections. He had stated in a video speech with the chief ministers of Punjab and KP, Pervez Elahi and Mahmood Khan, that the Constitution did not permit elections to be postponed for more than 90 days following the dissolution of a legislature.
Leaders of the PML-N and PPP, the two main constituents of the current Pakistan Democratic Movement administration, strongly opposed the decision to dissolve legislatures. In a later statement the PML-N had stated that it was prepared to run in elections should the PTI decide to forward with its plan to dissolve the two legislatures.
IMF staff and the government have also been in remote negotiations to disburse $1.18 billion as part of the ninth review of a $7 billion programme. The meetings which were initially scheduled for the final week of October were moved to November 3 and then continued to experience delays due to discrepancies in the two parties’ estimations.
The State Bank of Pakistan’s foreign exchange reserves, on the other hand, are in grave condition after falling by $11 billion in a single year. The central bank’s reserves were $17.686 billion in December 2021; as of December 9, they were $6.7 billion.
