Shares on the Pakistan Stock Exchange (PSX) fell for the second day in a row on Tuesday on the back of political and economic turmoil.
The benchmark KSE-100 index lost 1038.79 points, or 2.54 percent, to reach 39,932.03 at 1:58pm.
Dalal Securities CEO Siddique Dalal said the index fell due to a number of factors, including fears over the collapse of the Punjab and Khyber Pakhtunkhwa summits and the rise in political tensions that eroded investor confidence.
Other factors that affected the market were the redemption of related currencies at the end of the year, the deterioration of the economy, the pressure on the rupee, the lack of dollars and the delay in the completion of the ninth meeting of the International Monetary Fund (IMF), he added.
“All these things are bringing the market down and there is no hope that things will change in the future,” said Dalal.
“There are many issues, including the lack of a dollar, but the main reason is still political uncertainty and the end of the world. [two provincial] meetings. There is also pressure on foreign reserves,” First National Equities Limited CEO Amir Shehzad commented.
Former PSX CEO Zafar Moti also admitted that the “obvious” reason for the stock market’s decline was political uncertainty. He also cited persistent rumors as the reason for the downfall.
So much so that he complained that unlike the crisis period in the past, when the executives of the main market were gathered by the management of PSX to solve the problems and clarify the rumors, nothing happened recently.
PTI Chairman Imran Khan announced on Saturday that his party’s provincial governments in Punjab and Khyber Pakhtunkhwa will adjourn their meetings on December 23 to prepare for fresh elections.
The Constitution did not allow the elections to be delayed for more than 90 days after the assembly, he said while addressing Punjab Chief Minister Parvez Elahi and Chief Minister KP Mahmood Khan by his side.
However, in order to prevent the impeachment, the PPP and PML-N legislators passed a no-confidence motion against CM Elahi in the Punjab Assembly on Monday night.
Separately, a motion of no confidence was also passed against Sibtain Khan Sibtain Khan under Article 53 of the Constitution.
Meanwhile, the economic situation in this country is getting worse day by day. The State Bank of Pakistan’s foreign exchange reserves are at risk, falling by $11 billion annually. In December 2021, the reserves of the central bank were $ 17.686bn which now represents $ 6.7bn as of December 9, not enough to repay one month from abroad.
The development of the situation has increased while the ninth review of the IMF program of $ 7bn is pending and the long-term negotiations are taking place between the officials of the Fund and the government for the release of $ 1.18bn.
Pakistan has to pay at least $13bn to its foreign stakeholders in the remaining part of the financial year. But it is not clear when it will receive more money from the central and international governments, which leads to unsustainable fears.
The country was already in financial crisis, facing years of inflation and a dangerous devaluation of forex reserves, when it was devastated by floods that killed at least 1,700 people and caused significant damage, estimated at $30bn by the government, to agricultural land and infrastructure.