Shares drop 445 points on uncertainty over IMF deal

Shares at the Pakistan Stock Exchange (PSX) opened the week in the red, with analysts attributing the slump to uncertainty over an agreement with the International Monetary Fund (IMF). The benchmark KSE-100 index lost 444.97 points, or 1.08 per cent, to close at 40,673.64 points. It reached an intraday low of 494.64 points, or 1.2pc, around 3:27pm. Aba Ali Habib Securities’ Head of Research Salman Naqvi said there were a number of factors that affected the market negatively, especially economic uncertainty amid delays in reaching an agreement with the IMF for a bailout needed to stave off default. He noted that the parliament has not yet passed the Finance (Supplementary) Bill, 2023, generally known as the mini-budget, which imposes additional taxes to fulfil the IMF’s conditions. In addition, there were rumours that the central bank would hike the interest rate by 2-3pc. “Even though the Monetary Policy Committee meeting is scheduled for March 13, the policy rate may be increased sooner.” Besides this, there was also uncertainty on the political front and the law and order situation was worsening. “All of these factors affected the market negatively,” Naqvi commented.