Stocks slump as political fears spur massive selloff

• Panic prevailed at Pakistan Stock Exchange (PSX) the whole day.
• Investors hedged bets fearing economic fallout of political unrest.
  
• Benchmark KSE-100 index hits intraday low of 699 points

KARACHI: Stocks went into a tailspin on Wednesday as investors stampeded towards the exits ahead of a probable showdown between the government forces and the PTI’s long-marchers on Friday, traders said.

The KSE-100 Shares Index, the benchmark of Pakistan’s capital market, shed 650 points to close at 41,540.03 points.

Panic prevailed at Pakistan Stock Exchange (PSX) the whole day as the market was abuzz with speculations the government would go to every length to crush the PTI’s long march, causing chaos and spreading anarchy in the process, which may mount pressures on the struggling economy.

Traded volume and value for the day stood at 265 million shares, up 36%, and Rs7.71 billion, up 24%, day-on-day respectively. WorldCall Telecom was the volume leader with 35.39 million shares.  

Investors hastened to hedge their bets, fearing the economic fallout of the political unrest, slated to take the country by storm as the PTI’s planned long launches on Friday.

Topline Securities said the day kicked off on a negative note where the benchmark Index made an intraday low of 699 points after Chairman PTI Imran Khan announced his long march would start from Lahore on Friday, October 28, 2022.

"The major decliner in today’s trading session was TRG Pakistan as it knocked 89 points out of the index, closing at its lower limit with a loss of 7.5%," the brokerage added.

Analysts pinned this negative phenomenon on the PTI’s long march seen as a threat to the law and order situation across the country. It is widely believed that political agitation would further undermine the country’s struggling economy.

On the result front, Systems Limited announced its 3Q2022 EPS (earning per share) at Rs7.7, Millat Tractors declared 1QFY23 EPS at Rs3.87, MCB Bank unveiled an EPS of Rs7.8 for the third quarter along with DPS (dividend per share) of Rs5, HBL denoted an EPS of Rs7.8 along with DPS of Rs1.5 for the same period, while FFC unveiled an EPS of Rs4.12 for the period under review along with a DPS of Rs3.18.

Arif Habib Ltd (AHL) in a post-trade note said the PSX nosedived as a bloodbath session was witnessed. "After the former prime minister unveiled his plans for the long march, investor confidence was shaken," the brokerage said.

The AHL report added that volumes were decent in the mainboard stocks, while third-tier ones continued to remain in the limelight. 

Sectors that remained the nemesis of the index included cement (-103.4pts), technology & communication (-89.7pts), exploration and production (-81.2pts), power generation & distribution (-77.2pts) and fertiliser (-53.6pts).