April 17, 2019 (MLN): The KSE-100 index appears to be consumed by extreme anguish, as today it lost more than 600 points and closed at 36,752 points. While the trend in stock market’s performance refuses to change route, the reasons for these unceasing decline seem to be changing every day.
So what caused such a brutal chaos at the trading floors today? Individual performance of major sectors indicates that Banking sector emerged as the prime culprit for the bloodbath that was witnessed today, which eventually forced the index to drop way below the 37,000 mark, yet again.
Commercial Banks were forced to enter into the red territory on the back of the Government of Pakistan's decision to introduce a Treasure Single Account (TSA), which requires the transfer of Government’s deposits, currently being maintained with commercial banks, to State Bank of Pakistan (SBP).
This is a negative development for banks as total Government deposits with commercial banks are around Rs. 1.9 trillion or 13.7% of total deposits, around which, Rs. 0.9 trillion are Federal. This, predictably, has led to where the stock market is currently standing
Nevertheless, the scrips that significantly influenced the benchmark index’s performance included HBL (-4.91%), HUBC (-2.48%), OGDC (-1.32%), BOP (-7.39%) and PAKT (-3.42%).
Moreover, the index witnessed trading of 123 million shares of the listed scrips, having a total value of Rs. 4.5 billion. Within a range of 726 points, the index touched an intraday high of 37,418 points and an intraday low of 36,692 points.
The broader KSE All Share index also ended the session on a disappointing note, as it lost around 509 points and closed at 26,877 points. It traded nearly 172 million shares, having a value of Rs. 4.9 billion.
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