Pakistan Stock Exchange (PSX) on Friday crashed and shed 860.77 points or 2.15 per cent amid investors’ concerns over International Monetary Fund’s (IMF) assessment report of Pakistan economy and the declining forex reserves of the country.
The IMF mission in a report after completing an assessment of Pakistan economy said Pakistan is facing significant economic challenges, with declining growth, high fiscal and current account deficits and low levels of international reserves.
The Fund’s report and State Bank of Pakistan’s report about declining Pakistan forex reserves triggered panic selling which led to market’s crash.
The shares market opened trading on Friday in the green zone. But soon the market crashed and then there was all-round fall.
At one point during the trade, the market shed 1054 points. However, it managed to recover some of the losses in the last session and closed 860 points down. During the trade, some 87,369,890 shares changed hands at the market.
The IMF end-of-mission statement acknowledges that Islamabad has recently taken some policy measures, but said those were not sufficient and `decisive policy action and significant external financing` were needed to stabilise the economy.
The report says once stabilisation is beginning to take hold, increasing focus is warranted on critical reforms to foster sustained and inclusive growth and strengthen institutions.
Senior analyst and Chief Executive Office of Arif Habib Corp Ahsan Mehnati said that stock fell sharply on investor fears amid weekly fall in country’s forex reserves by $627 million and dismal earnings outlook after IMF-end of mission statement calls for policy measures on further hike in gas and power tariffs and significant external financing.
He added that dismal report of EIU hinting ongoing currency and inflationary pressures, OGRA notification for up to 143 per cent increase in natural gas tariff, and speculations on likely surge in interest rates and rupee depreciation played a catalyst role in bearish close.
On Friday, trading held on the shares of 367 companies out of which share prices of 311 companies decreased, whereas share prices of 43 companies increased. Prices of 13 companies remained unchanged.
Island Textile was the market leader in term of share price gains followed by Service Industries. The share price of Island Textile gained Rs79.01 to close at Rs 1773 while the share price of Service Industries increased by Rs 21 to close at Rs 721.
Nestle Pakistan was the biggest loser followed by Bata (Pak). The share price of Nestle Pakistan decreased Rs 475 per share to close at 9025 while the price of Bata (Pak) was Rs84 to close at Rs1795.