Investors demand clarification following the election as PSX records the ninth-highest DoD loss

"All-time high": KSE-100 surpasses 69,000 as PSX reaches a new peak

Dealers reported that nervous investors panicked and sold on Monday, the Pakistan Stock Exchange (PSX) seeing its ninth-highest day-on-day (DoD) loss due to worries about the economy and the incoming regime.

With 1,878 points dropped, the benchmark KSE-100 Shares Index closed at 61,065 on Friday, 2.98% lower than its previous close of 62,943 points.

In a report, Arif Habib Limited stated that the KSE-100 index saw a cumulative fall of 3,079 (down 4.8%), staying in negative territory for two straight trading days after the election.

The benchmark index fell 2,232.91 points, or 3.55%, during intraday trading to settle at 60,710 points.

The loss was linked to “uncertainty regarding the formation of the government” by Samiullah Tariq, head of research at Pak-Kuwait Investment Company.

Pakistan held its tenth general election on February 8, with numerous independent candidates supported by the Pakistan Tehreek-e-Insaf (PTI) emerging victorious.

The PSX fell more than 2,000 points on Friday at first because the results of the general elections on February 8 were unclear.

By day’s end, the market recovered some of its losses, closing at 62,943 points, down 1.87%.

The initial decrease was ascribed by market observers, including Muhammad Sohail of Topline Securities, to the “unexpected” election results, which differed from pre-election projections.

At its lowest point, the benchmark KSE-100 index lost 3% due to a major sell-off sparked by this uncertainty.

According to Khurram Schehzad of Alpha Beta Core, the index kept declining on the second day after the elections, mainly because there was uncertainty over the formation of the next government (a hung parliament), which could provide some direction, clarity, and outlook on how to handle the country’s pressing economic challenges.

“In this regard, unlike the past trends, KSE100 went down in the two consecutive sessions after the elections, where values at the PSX eroded sharply,” Schehzad stated.

According to Alpha Beta Core analyst, each session has recorded a loss in market capitalization of PKR 214 billion ($767 million), with a combined loss in two sessions of PKR 427 billion ($1.53 billion).

“Historically, PSX showed jubilance post elections where the market used to go up 3 2% in the first two days post-elections (2008, 2013, 2018 elections), while this time around, the market has lost 4.7% post-elections.”

Schehzad predicts that while investor confidence may continue to decline, the market will sharply recover as soon as the winning political parties make a clear decision about the composition of their economic team and provide a plan and direction for tackling the major economic issues.

Compared to Monday’s total of 1.89 billion shares, the overall trading volumes dropped to 1.51 billion shares. Rs29.09 billion worth of shares were traded during the day.

386 businesses’ shares were exchanged. 31 of these stocks ended the day higher, 351 lower, and 4 unchanged.

The volume leader, K-Electric Ltd., traded 341.06 million shares, closing at Rs. 5.30 after losing Rs. 0.53. Next in line were WorldCall Telecom, which sold its 176.02 million shares for Rs1.70 after losing Rs0.20, and Cnergyico PK, which sold its 131.7 million shares for Rs5.01 after losing Rs0.89.