KARACHI: The unending power struggle in Islamabad led on Monday to a selling spree on the stock exchange, resulting in a cumulative paper loss of Rs184 billion in the value of all listed shares.

Stock prices sank across the board as the deputy speaker of the National Assembly dismissed a day ago the motion for a vote of no confidence against the prime minister — a controversial act that was followed by the dissolution of the legislature by the president. The case then landed in the Supreme Court, which has yet to pass a ruling on the matter.

According to Topline Securities, the KSE-100 index stayed in the red zone throughout the day, with investors opting to offload their positions amid rising uncertainty.

As a result, the KSE-100 index settled at 43,902.05 points, down 1,250 points or 2.77 per cent from a day ago.

Speaking to Dawn, Optimus Capital Management CEO Asif Qureshi said the market expected a change of government on Sunday, which didn’t happen and ended up fuelling uncertainty.

“A quick decision by the Supreme Court will bring stability to the market. I think the path towards the general election will be the path of least destruction,” he said, noting that an alliance of 12 opposition parties with conflicting ideologies will be in no position to take tough economic decisions that are needed in the immediate term.

He expressed hope that the caretaker government is different from the 2018 setup, which refused to act swiftly on key economic decisions. “The economy needs immediate adjustments like import curbs and the rollback of energy subsidies,” he said.

Faisal Shaji, strategist at Standard Capital Securities, told Dawn the unrelenting volatility in the currency market is also driving down stock prices. “The continuous depreciation of the rupee against the dollar is highly dangerous for the stock market. Why would any investor come to the stock market if they expect a better return in the currency market?”

He said news reports about Pakistan’s default risk, measured by credit default swaps, rising to a multi-year high have also played a key role in scaring investors away from the stock market. “Investors will breathe a sigh of relief should the Supreme Court decide swiftly on the matter,” he said.

The trading volume decreased 56.2pc to 170.5 million shares while the traded value went down 50.5pc to $29.9m on a day-on-day basis.

Sectors that took away the highest number of points from the benchmark index included commercial banking (324.5 points), cement (252.89 points), technology and communication (100.57 points), oil and gas exploration (93.48 points) and power generation and distribution (69.14 points).

Stocks contributing significantly to the traded volume included TeleCard Ltd (17.39m shares), K-Electric Ltd (16.01m shares), TPL Properties Ltd (12.55m shares), Ghani Global Holdings Ltd (11.14m shares) and WorldCall Telecom Ltd (8.29m shares).

Shares contributing most negatively to the index included Lucky Cement Ltd (127.75 points), Habib Bank Ltd (82.37 points), Meezan Bank Ltd (70.78 points), TRG Pakistan Ltd (60.34 points) and Pakistan State Oil Company Ltd (52.67 points).

Stocks that contributed the maximum number of points to the index included Colgate-Palmolive Pakistan Ltd (17.96 points), Highnoon Laboratories Ltd (3.12 points), Shifa International Hospitals Ltd (2.21 points), Punjab Oil Mills Ltd (0.66 points) and HBL Growth Fund (0.65 points).

Foreign investors were net sellers as they offloaded shares worth $0.44m.

Published in Dawn, April 5th, 2022