The Pakistan Stock Exchange (PSX) nosedived by 3.68%, equivalent to 2,362 points, soon after opening on Friday. Panic selling ensued in the aftermath of the upset in the general elections, causing the index to hit a 10-day low at 61,782 points.
Muhammad Sohail, CEO of Topline Securities, commented briefly, “PSX down…after unexpected election results”.
According to the partial results of Thursday’s general elections in the country, PTI-backed independent candidates were leading on the majority of National Assembly seats, contrary to pre-election survey results and expectations that the PML-N would form the new political government at the Centre.
The unexpected election outcome triggered panic selling among investors. They also offloaded part of their holdings due to apparent uncertainties in the election results, particularly in Karachi, the city of seaports and the hub of economic activities in the country.
Later, the PSX benchmark KSE 100 Index partially recovered from the intra-day high losses but remained under mounting selling pressure. The benchmark index stood at 62,760 points, experiencing a net loss of 2.16% or 1,385 points at 10:32 AM compared to Thursday’s close at 64,142 points.
At that time (10:32 AM), investors traded a total of 68 million shares. The selling was observed across the board, particularly in energy stocks, which had gained significantly in pre-election selective buying with the hope that the next government would provide a suitable economic roadmap and pull the nation out of the ongoing financial and economic crisis.
Experts stated that whoever forms the government would secure a new IMF loan programme after the current one worth $3 billion completes in March 2024. The next IMF programme must ensure timely repayment of maturing foreign debt and support the economy to grow, creating the required job opportunities in the country.
Other challenges for the new government include reducing the total debt size, controlling stubborn inflation readings, attracting foreign and local investment, and increasing revenue collection through taxes by identifying new taxpayers in the retail, wholesale, agriculture, and real estate sectors.