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Bloodbath at PSX as KSE-100 index plunges over 1,600 points on PM Shehbaz’s ‘tough’ decisions

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  • The market closes at 41,051.73 points after losing 3.9%
  • Analyst says 10% super tax on large-scale industries unexpected. 
  • Shares of 364 companies were traded during the session.

KARACHI: The Pakistan Stock Exchange (PSX) Friday witnessed a bloodbath immediately after Prime Minister Shehbaz Sharif announced “tough decisions” taken by the government in the federal budget for the upcoming fiscal year 2022-23.

The benchmark KSE-100 index opened in the green in line with its positive trend a day earlier; however, it soon plunged over 2,000 points or nearly 5%. 

At close, benchmark KSE-100 index closed at 41,051.79 points after plunging 1,665.18 points or 3.9%.

Benchmark KSE-100 index intra-day trading curve. — PSX data portal
Benchmark KSE-100 index intra-day trading curve. — PSX data portal

In his address to the nation, the premier announced that a 10% super tax would be imposed on large-scale industries including cement, steel, sugar, oil and gas, fertiliser, banking, textile, chemical, beverage, and automobile sectors.

Speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas said the market is reacting to the news of the imposition of super tax on large-scale industries.

“A 10% super tax on large-scale industries is on the higher side and the market didn’t expect this, therefore the reaction is intense,” he said.

The analyst was of the view the market will now stay under pressure in the days to come until budget 2022-23 is passed in the National Assembly and the finance act is released, which will reveal the exact details of the “tough” decision taken by the government.

Shares of 364 companies were traded during the session. At the close of trading, 61 scrips closed in the green, 287 in the red, and 16 remained unchanged.

Overall trading volumes rose to 424.22 million shares compared with Thursday’s tally of 349.48 million. The value of shares traded during the day was Rs12.8 billion.

K-Electric was the volume leader with 36.66 million shares traded, gaining Rs0.01 to close at Rs2.86. It was followed by Cnergyico PK Limited with 25.85 million shares traded, losing Rs0.43 to close at Rs5.35 and Pakistan Refinery with 25.3 million shares traded, losing Rs1.44 to close at Rs18.10.

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With its second-largest surge ever, PSX approaches 114,000 points.

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Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

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In interbank trade, the Pakistani rupee beats the US dollar.

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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