Stock market exhibits high vulnerability despite efforts by govt to revive economy

October 15, 2018 (MLN): The KSE-100 is facing a bizarre dilemma as the market’s reaction to the announcement of revisiting IMF has been strange, to say the least. The expectation of an economic revival in the country following the announcement regarding IMF program eventually paved way for a panicky atmosphere.

Furthermore, the current bearish run is nothing more than history repeating itself, as the economy has gone through such a painful phase in previous cycles, which typically take its toll on the financial markets.

On one side there is a highly oversold equity market, and yet what is stopping a sharp relief rally off these levels is an acute situation building up on the external account (FX reserves).

As of now, the government can play a major role to bring the market back to a state of invulnerability i.e. through FBR and its actions to bring tax evaders to justice, reassessing property valuations considering real estate is usually a preferred avenue to park black money, and tax reforms in the agriculture sector.

At close, the benchmark KSE 100-share index exhibited a plunge of 750 points, gearing down the market by 2% to settle at 36,767 points.

The stocks of Commercial banks (down by 166 points) and Fertilizer (down by 118 points), Oil % Gas Marketing (down by 86 points) and Oil & Gas Exploration companies (down by 83 points) largely influenced the index as the merged as the major loss bearing contributors.

The losses on MCB (-3.86%), PPL (-2.7%), ENGRO (-2.52%), BAHL (-3.78%) and LUCK (-3.85%) brought about most of the volatility on the index.

Within a range of 1301 points, the market travelled to an intraday high of 37,575 points and an intraday low of 36,274 points.  With respect to volume, around 105 million shares of the companies listed on KSE-100 were traded with a worth of around Rs. 5.2 billion.

93 companies listed on the KSE 100 index traded their scrips on the exchange. While the share prices of 17 companies exhibited growth, the prices of 75 companies dropped whereas 1 company remained unchanged.

Correspondingly, the broader KSE All Share lost 442 points by the day end, closing in at 27,325 points. An intraday high of 27,801 points was recorded for the KSE All Share index, while the intraday low sunk to 27,045 points today.

Over 165 million shares of the scrips listed within the broader KSE All Share Index were traded today, with its value recorded at Rs. 6 billion.

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