PSX dips over 1,200 points on profit-taking

KSE-100 index driven down by IMF concerns over trade data discrepancy

KARACHI:

The Pakistan Stock Exchange (PSX) closed significantly lower on Monday as profit-taking dragged the benchmark KSE-100 index down by 1,238 points.

The sell-off was driven by investor concern over complications in government's talks with the International Monetary Fund (IMF). Reports suggested that the IMF had raised concern over inconsistencies in trade data reported by the Pakistan Single Window and the Pakistan Revenue Automation Limited. Analysts termed the market correction a temporary pause and expected investor confidence to return soon.

JS Global Head of Equity Research Muhammad Waqas Ghani said stocks came under pressure at the PSX amid concerns over a widening trade deficit and reported IMF reservations about some policy matters. He believes the weakness may prove short-lived and expects sentiment to improve once the next IMF disbursement is made.

AKD Securities Director Research Muhammad Awais Ashraf commented that investors remained cautious over the IMF's concerns regarding discrepancies in trade data, which cast a shadow over improving macroeconomic indicators. However, "we believe this issue is immaterial as the State Bank data, reflecting the actual flow of dollars in and out of the country, shows no cause for concern."

KTrade Securities equity trader Ahmed Sheraz stated that the PSX began the trading week on a negative note, with the KSE-100 index shedding 1,238 points (-0.73%) to close at 167,752. This heightened volatility was largely driven by a mix of geopolitical and economic concerns.

Tensions escalated following provocative statements from Indian military and political circles, while domestic uncertainty increased due to Pakistan's lack of compliance with certain IMF targets. Notably, the IMF sought clarification on an $11 billion discrepancy in trade data, reported by two government entities, Sheraz said.

Arif Habib Limited (AHL) observed that the bourse opened the week with a drop of 1.77% before a late recovery trimmed losses to 0.73% by the day's end. Some 26 shares rose while 74 fell with Fauji Fertiliser (+1.02%), Adamjee Insurance (+10%) and HBL (+1.06%) contributing the most to index gains. In contrast, Engro Holdings (-2.62%), Meezan Bank (-1.91%) and Hub Power (-1.54%) were the biggest drags.

Meanwhile, AHL mentioned, Pakistan recorded the fastest decline in sovereign default risk, according to Bloomberg, and it now stands second globally, behind only Turkiye. Also, Prime Minister Shehbaz Sharif said Malaysia had announced a quota of $200 million worth of meat imports from Pakistan. Apart from that, Pakistan successfully delivered its first batch of rare earth elements and critical minerals to US Strategic Metals.

In another report, the IMF asked the government to publicly disclose $11 billion worth of discrepancies in trade data. Pakistan also appeared well-placed to secure over $1 billion in third loan tranche despite some slippages, AHL added.

Topline Securities, in its report, wrote that the stock market concluded Monday's session on a negative note, pressured by escalating geopolitical concerns related to India, cautious investor sentiment and heightened profit-taking. The benchmark index traded within a broad range, hitting the intra-day high of 336 points and low of 2,992 points, before settling at 167,752, reflecting a decline of 1,238 points, it said.

Overall trading volumes decreased to 1.27 billion shares versus previous tally of 1.57 billion. The value of stocks traded was Rs60.5 billion.

Shares of 487 companies were traded. Of these, 108 closed higher, 348 dropped and 31 remained unchanged.

The Bank of Punjab was the volume leader with trading in 131.3 million shares, rising Rs0.96 to close at Rs34.46. It was followed by K-Electric with 110 million shares, falling Rs0.09 to close at Rs7.02 and Bank Makramah with 78.3 million shares, adding Rs0.48 to close at Rs8.29. Foreign investors sold shares worth Rs594 million.