Tuesday Mar 17, 2020
KARACHI/ISLAMABAD: The benchmark KSE-100 Index slipped 3.17% on Tuesday to close at 32,616 points despite a prediction to end at a positive note over the policy rate cut forecast.
The stock market witnessed bearish trade in general, registering a reduction of of 1,069 points (3.17%) as opposed to 33,685 points the last working day.
On Monday, the PSX had suffered the worst single-day dive in its history.
A mixed trend was seen at the exchange on the second day of the week and trading continued to oscillate. However, market experts foresaw a recovery of the exchange as international capital market was in bullish state after a steep slide over last couple of weeks.
The KSE-100 Index plunged 2,375 points (6.59%) to 33,685 points against its recent high of 43,200 points on January 13, 2020. The benchmark had witnessed a 7.45% crash on May 20, 2002.
After the index fell more than 4%, trading was halted on Monday and it was the fourth time it happened over the past two weeks.
As of Monday's closing bell, more than 240 million shares worth Rs11.29 billion had exchanged hands, compared to over 215 million shares valued at Rs8.06 billion traded the last day.
Of the 355 companies whose shares were traded, 86 recorded gains, 251 sustained losses, and 18 remained unchanged.
Top three traded companies were The Bank of Punjab (24,610,000 shares, Rs9.19 per share), Pioneer Cement Limited (20,079,000 shares, Rs39.31 per share), and Maple Leaf Cement Factory Limited (15,506,000 shares, Rs25.52 per share).
Sapphire Fibres Limited registered the highest gain at Rs50.59 a share to close at Rs729.99, whereas Shezan International Limited was runner-up with a rise of Rs19.01 per share and closing at Rs334.
Unilever Pakistan Foods Limited recorded the biggest dip at Rs150 a share to close at Rs6950, while Colgate-Palmolive (Pakistan) Limited decreased Rs117.55 per share to close at Rs2,249.39.
Earlier, while speaking to the media, PSX Chairperson Abdul Karim Dhedhi called for 3.25% cut in the State Bank of Pakistan's (SBP) discount rate as many countries' central banks had significantly reduced the discount rates to support the economies hit by the coronavirus pandemic.
"It will be difficult for our economy to survive if SBP does not reduce policy rate today," he remarked, adding that like in other economies of scale, the Pakistani government should announce a stimulus package to strengthen the economy.
He said Pakistan’s exports had suffered due to many countries declaring lock-downs over the coronavirus pandemic. The leading businessperson suggested that the nation should benefit from a drop in petroleum prices in international markets by hedging big oil stocks.
The PSX’s former director, Amin Yousuf, said capital market players expected the SBP to introduce a 200-basis-point cut in the discount rate in the prevailing adverse situation. Besides, the government should announce a stimulus package in line with other countries' patterns.
It should give tax relief to the corporate sector for the long-term benefit of the country. "Our government would have to take a big decision,” he said.
However, he appreciated the Sindh and federal governments' steps to contain the spread of coronavirus.
Another capital market expert, S M Mehnati, also called for at least a 2% cut in the policy rate.