Surging imports, rise in T-bill yields trigger PSX bloodbath

KSE-100 index recorded decrease of 2,134.99 points, or 4.71pc

The Pakistan Stock Exchange (PSX) on Thursday witnessed a bloodbath with the benchmark KSE-100 index losing over 2,100 points.

The market opened on a negative note and free fall continued till the end of the session. The KSE-100 Index moved in a range of 2,281.67 points, showing an intraday high of 45,369.14 points – the last day closing point – and a low of 43,087.47 points.

The benchmark index closed at 43,234.15, down 2,134.99 points, or 4.71pc.

Speaking with Profit, market analysts said that the the third largest decline ever in terms of index points and the worst trading session since March 24, 2020, was a knee-jerk reaction to expected imports of around $8.0 billion, which can lead to a huge CAD of around $2.5 billion, which would essentially be highest ever. For context last full year CAD was $1.9 billion.

Additionally, cut off yields went up sharply in last T-bill auction. Secondary market yields have also followed today, which is making fixed income more attractive from investment perspective.

Further, stock market is cheap on valuations but in the short term, sentiment can overshadow fundamentals. In longer term, equities have outperformed other asset classes and could continue to do so.

A total of 366 companies traded shares in the stock exchange, out of them shares of 18 closed up, shares of 335 closed down while shares of 13 companies remained unchanged. Out of 96 traded companies in the KSE-100 Index, one closed up, 93 closed down and two remained unchanged.

The overall market volumes increased by 145.68 million to 386.75 million shares. Total volumes traded for the KSE-100 Index increased by 128.4 million shares to 213.44 million shares. The number of total trades increased by 36,856 to 131,783, while the value traded increased by Rs4.84 billion to Rs14.06 billion. However, overall market capitalisation decreased by Rs332.27 billion.

Among scrips, WTL topped the volumes with 33.02 million shares, followed by DCR (29.58 million) and BYCO (22.83 million). Stocks that contributed significantly to the volumes include WTL, DCR, BYCO, UNITY, and GTECH, which formed around 31 percent of total volumes.

The major sectors taking the index toward south were commercial banks with 360 points, cement with 314 points, oil & gas exploration companies with 240 points, technology & communication with 212 points and fertilizer with 204 points. The most points taken off the index were by LUCK which stripped the index of 150 points followed by SYS with 119 points, HUBC with 101 points, HBL with 91 points and PPL with 77 points. No sector took the index towards the north.

On Wednesday, the government released provisional data that showed trade deficit rose steeply by 162.4pc in the month of November, , the highest recorded in a single month in terms of value.

The reversing trend in trade deficit was witnessed for the fifth consecutive month as merchandise trade deficit reached $5.107 billion in November against $1.946 billion over the corresponding month last year.

 

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