PSX benchmark sheds 660 points as finance minister leaves for IMF talks – Business

The Pakistan Stock Exchange (PSX) witnessed selling pressure on Monday as the benchmark KSE-100 index fell more than 500 points in the first hour of trading.

According to the PSX website, the KSE-100 index fell more than 400 points immediately after opening at 43,100.71 points. After around 9:30 AM, the exchange saw a brief correction before falling once again.

At around 12:30 p.m., the benchmark was down 526 points (1.22%). During the day, the stock exchange fell 660.46 points (1.53 pc).

Today’s plunge comes as Finance Minister Mifta Ismail departed for Doha today to attend a meeting with the International Monetary Fund (IMF) to resume its $6 billion loan program suspended since early April.

Speaking to reporters at Jinna International Airport earlier today, he said Prime Minister Shebaz Sharif and PML-N Supreme Council member Nawaz Sharif had ruled out the possibility of halting fuel and electricity subsidies introduced by the PTI government in February.

Ismail said the deal signed by former Finance Minister Shaukat Tarin would require Pakistan to raise the price of diesel by Rs150 or more and gasoline by Rs100. “That’s not going to happen. I said no. Shehbaz Sharif refused. Nawaz Sharif refused,” he asserted.

Raza Jafri, head of equity at Intermarket Securities, said the market is under pressure because it’s time for governments to make quick decisions about the economy. “But I just don’t go overboard.

“As the IMF talks close this week, Pakistan cannot afford to leave the negotiating table without an employee-level agreement being reached,” he added.

Experts have repeatedly said that Pakistan must immediately withdraw its non-viable fuel and energy subsidies, a prerequisite set by the IMF to resume its lending program. Arguments that the new coalition government should keep subsidies have been deteriorating investor sentiment for weeks.

Ahsan Mehanti, Director of Arif Habib Corporation said: It is analyzed that the monetary policy announcement, which is expected to raise the policy rate by at least 100bps late in the evening, contributed to the market decline.

“The devaluation of the rupee against the dollar, [which touched an all-time high of Rs201 against the dollar last week] “It is also responsible for the loss of investor confidence,” he said.

Mehanti warned that political tensions could escalate, especially after former Prime Minister Imran Khan’s announcement of marches on Islamabad could put pressure on markets.

Government indecision puts the economy at risk.

PSX and Rupee have been under pressure last week as their new coalition government has failed to make a decisive economic decision. The most prominent of these is the cancellation of fuel subsidies.

According to Serb According to the report, investors were offended by the suspension of the IMF program and higher import costs. Earlier this month, the country announced its largest monthly oil import bill for April, which rose 58.98% in the July-April period to $24.7 billion, up from 15.58 billion in the same period a year earlier, driven by rising international oil prices and rising oil prices. increased against the dollar. The depreciation of the rupee.

In a recent meeting with the new finance minister, the IMF linked the continuation of the loan program with the withdrawal of fuel subsidies introduced by the previous government. But Prime Minister Shehbaz Sharif has consistently rejected the Oil and Gas Regulatory Authority and the Treasury’s summary of fuel price hikes.

PTI announced on February 28 that it would freeze gasoline and electricity prices for four months (until June 30) as part of a series of measures to provide relief to the public.

At the time and even after coming to power last month, PML-N, part of the new coalition, and other political parties severely criticized the Imran Khan government for “derailing” the IMF program through unfunded fuel subsidies. However, despite having been in the lead for over a month, these parties have not withdrawn their subsidies. The finance minister has repeatedly said that these subsidies are not feasible and will cost the government 120 billion rupees a month.

Earlier this month, Ismail said the price of gasoline should be 245 rupees per liter under the agreement the former government had with the IMF. However, the PML-N-led government is still selling it at 145 rupees per liter and will do everything it can to keep that price, he added. .