KARACHI ( WEB NEWS )
After a bill regarding strict measures against non-filers was presented in the National Assembly, the bearish trend in the Pakistan Stock Exchange has worsened. On the fourth day of the business week, the benchmark 100 Index recorded a historical decline of 4,795 points during trading. According to the Pakistan Stock Exchange website, at 2:38 PM, the benchmark 100 Index saw a significant drop of 4,866 points, pushing it below the 107,000 mark. This was the largest single-day decline in the history of the stock market.
During Thursday’s trading, over 116 million shares of 472 companies were traded. The prices of shares in 66 companies increased, while 371 companies saw a decrease in their share prices, and 35 companies had no change in their stock prices. By the end of the session, the 100 Index had closed at 106,274 points, a decrease of 4,795 points, or 4.32%. The previous day, the 100 Index had also dropped by 3,790 points, closing at 111,070 points. Over the past three days, the stock market has experienced a drop of over 10,000 points.
On Tuesday, the second day of the business week, there was a significant rally in the stock market, with the 100 Index rising by over 800 points to reach 117,039 points. However, the bearish trend has persisted since then.
Owais Ashraf, Director of Research at AKD Securities, said that the bill targeting non-filers and limiting their ability to invest in mutual funds or maintain bank accounts is causing investor concerns. He noted that while the implementation of such a bill would eventually benefit the equity market in the long term, its impact on the flow of investments in the medium term is likely to be minimal. Furthermore, he attributed the market decline to specific stock sell-offs due to concerns about higher estimated costs. He advised investors to continue investing in equities, as a decline in fixed-income rates could lead to further investment in the equity market.
Yusuf M. Farooq, Director of Research at Chase Securities, stated that after significant gains over the past year, the market is now undergoing a correction phase. He expressed confidence that instead of a decline in earnings valuations, the market’s performance would improve. Farooq also stated that they remain optimistic about the economy and stock market, mentioning that the full effects of recent interest rate cuts have yet to be seen, and more time is needed for their impact to materialize. Looking ahead, he expected a gradual reduction in interest rates, with a decline of 50 to 120 basis points anticipated next year.
It is worth noting that on Monday, the State Bank of Pakistan had cautiously reduced the interest rate to 13%. Analysts attributed this decision to a cautious easing in monetary policy and suggested that inflation might see a slight increase in the coming months.
Tariq Abbas of Arif Habib Limited told a private TV channel that this correction is healthy, as the market had set continuous records in recent weeks. He clarified that the large-scale selling by mutual funds, driven by rising redemptions, was the key factor pushing the market down over the last two sessions.
Regarding exports, all major sectors saw an increase in exports in November compared to the previous year. Textile and leather exports grew by 10%, while agro and food sector exports increased by 4%. Other manufacturing products saw a 3% rise, and exports of metals and gems grew by 19%. Exports of minerals and petroleum increased by 10%, and exports of chemicals, fertilizers, and pharmaceuticals rose by 13%. According to sources, in November, textile and leather exports amounted to 1.547 billion dollars, while agro and food sector exports exceeded 800 million dollars. Exports of other manufacturing products stood at 201.3 million dollars, and metal and gem exports reached 115.1 million dollars.