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Stocks fall as delay in IMF talks, Saudi crown prince visit weigh

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  • Investors concerned as world commodities rise.
  • Shelving of Saudi crown prince visit dents sentiment.
  • Losses led by exploration and production sector stocks.

KARACHI: Stocks Monday got off to a bad start to close the first day of the week weaker as investors weighed a reported holdup on the International Monetary Fund (IMF) front amid ongoing political uncertainties.

After remaining soaked in the red ink, the whole day, Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index settled at 42,851 after losing 242 points or 0.56% compared to the last closing on Friday.

Benchmark KSE-100 index intra-day trading curve. — PSX data portal
Benchmark KSE-100 index intra-day trading curve. — PSX data portal

Topline Securities in a note said a delay in Pakistan-IMF talks, rescheduling of the Saudi crown prince’s visit and a rally in the global commodity markets where international oil prices were trading up over 3%.

During the day, exploration and production, fertiliser and technology sector stocks contributed negatively to the index.

Pakistan Petroleum Limited, Oil and Gas Development Company, Pakistan Services Limited, Engro Corporation, and Pakistan Oil Fields lost 141 points, cumulatively.

On the flip side, TRG Pakistan, Lotte Chemical, and Habib Bank Limited together added 133 points.

Darson Research said stocks went downhill from the word ‘go’. 

“Earlier, as the equities started going down volatility emerged immediately, resulting in a selling spree that pulled the index below the 43,0000-point mark,” the brokerage said.

Over 185 million shares traded today at the bourse while the total value clocked in at Rs6 billion. Hascol Petroleum led the volumes chart with a trade of 26.5 million shares. Stocks that contributed significantly to the volumes are Hascol Petroleum, Pakistan Tobacco Company, Lotte Chemical, TRG Pakistan, and WorldCall Telecom.

Arif Habib Limited (AHL) in its post-market analysis said the trade commenced with a negative gap and proceeded to hit an intraday low of 42,761.88 points due to a lack of investor participation. 

“Mainboard activity remained flat as the third-tier stocks continued to be the volume leaders,” the AHL report said.

Sectors that dragged the index down turned out to be exploration and production (-86.5 points), cement (-38.4 points), fertiliser (-37.2 points), commercial banks (-37 points), and miscellaneous (-31.3 points).

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.

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Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.

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Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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