PSX down as IMF uncertainty weighs

• Investors on guard amid low reserves, dry foreign inflows.
• Ninth review of IMF bailout programme continues to stalemate.
• Uncertainty over $1.1 billion tranche making investors over-jittery.

Stocks ended lower Wednesday with investors mostly on guard as the much-needed next tranche of the International Monetary Fund’s (IMF) bailout programme continues to hang in balance amid dried-out foreign inflows.

The KSE-100 Index, the benchmark of the Pakistan Stock Exchange (PSX), lost 91.34 points or 0.22%. 

Tahir Abbas, an analyst at Arif Habib Limited (AHL), expressed concerns over the impasse on the ninth review of the IMF's extended funding facility continued to give investors cold feet. 

"Uncertainty prevailing over the next IMF $1.1 billion tranche, critical for the cash-strapped country, is taking its toll on the country's markets, especially the equities," Abbas said talking to Geo.tv. 

AHL, in a report, said another mixed session was witnessed at the PSX today.

“The market started in the red but quickly turned green and traded in a constrained range the whole day as a result of uncertain economic conditions,” the brokerage said.

Comparatively, mainboard volumes dropped while third-tier companies continued to dominate the volume board, the AHL report added.

Sectors that contributed to the dismal performance include exploration and production (-49.4pts), commercial banks (-36.5pts), power generation & distribution (-17.7pts), engineering (-8.6pts), and oil and marketing companies (-70.pts).

The AHL report also said survival without the IMF was not an option given the scale of the external financing needs.

Topline Securities in a note said equities closed slightly negative. “The market opened on a positive note as easing international commodities prices improved investor sentiment allowing the market to make an intraday high of 265 points,” the brokerage said.

However this positivity failed to sustain as profit-taking emerged in the second half of the trading session, forcing the market to make an intraday low of 132 points, the Topline report said.

The Oil and Gas Development Company, Pakistan Petroleum Limited, United Bank Limited, Meezan Bank Limited, and Hub Power Company Limited, were major laggards as they cumulatively dented the Index by 90 points.

Traded volume and value for the day stood at 142.84 million shares, down 29%, and Rs4.33 billion, down 13%, respectively. Dewan Farooque Motors Limited was today`s volume leader with 10.85mn shares.

Moreover, Pakistan’s trade deficit shrank 32.65% to $17.13 billion in the first half of the current fiscal, as imports of non-essentials and other goods were slowed down by over a fifth as compared to last year. This import-export gap was recorded at $25.44 billion in the same period of FY22.

Imports in the July-December period shrank by 22.63% to $31.38 billion from $40.56 billion in the same period last year. Likewise, exports were also down by 5.79% to $14.25 billion against $15.125 billion in the same period last year, the Pakistan Bureau of Statistics (PBS) monthly trade bulletin said on Tuesday.