Bloodbath at Pakistan Stock Exchange as index lost nearly 1447 points

Political and economic uncertainty main cause of today's  mayhem  at PSX 

The Pakistan Stock Exchange (PSX) witnessed bloodbath today as 100 index lost 1447 points in a single day. PSX at one point during the trading session lost more than 1,543 points or 3.44% value. But it recovered a bit before the closing. The 100 index closed at 43,393.14, down 1,447.67 points, or 3.23%. The investors lost billions of rupees within couple of sessions.

The four main reasons contributed in today’s mayhem at share market. The political and economic uncertainty in the country is the main reason. The new government led by PM Shahbaz Sharif hasn’t come up with the concrete plan to address the main economic issues.

The political tension is raising b every passing day and PTI chairman Imran Khan is threatening to launch long march towards Islamabad.

The other reason is continues loss of the value of Pak Rupee against US dollar. The Rupee recovers some of the value when new government took over a month ago but it lost its value again in the last few days.  

The uncertainty regarding the IMF programme is another reason of this shaky confidence of investors. The negotiations with IMF will start on May 18 in Doha to resume the IMF programme. Pakistan is also asking for additional $2 billion from IMF.

There were hopes of a Saudi economic package during the PM Shahbaz Sharif’s visit to Kingdom. But no formal announcement has been made so far regarding the economic package.

It seems that situation is going to be volatile unless government secures a new bailout from IMF. The government needs to take immediate actions to stablise the situation in the country.  

In order to control the situation the government needs to lay out a concrete economic plan, moreover, a strategy needs to be devised regarding oil prices and controlling rising commodity prices.

                                                                  Khalid Bhatti 

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