- Rupee plummets to fresh all-time low of 171.13 against US dollar
- KSE-100 Index sheds 661.3 points to close at 43,221.78 points
ISLAMABAD – Pakistani rupee and stocks plunged further down on Wednesday amid political uncertainty and rumours rife about the civil, military relations which added fuel to the fire.
Moreover, concerns surrounding an uptick in local fuel and energy prices on recommendation of the International Monetary Fund (IMF) also forced investors to book profit on current valuations.
The rupee plummeted to a fresh all-time low of 171.13 against the US dollar, breaching a day earlier low of 171.04, mainly due to surging import bill and Afghan situation.
Though the Pakistan Stock Exchange (PSX) returned back to its bearish trend on Wednesday after showing some resistance a day earlier, with the benchmark KSE-100 Index shedding 661.3 points (-1.51 percent) to close at 43,221.78 points.
According to the State Bank of Pakistan (SBP), the rupee shed 9 more paisas (-0.05 percent) as the US dollar opened at Rs171.04 and closed at Rs171.13. In the open market, the rupee was traded at Rs171.20/172.50 per dollar.
The rupee continued to bear the pressure despite a 17 percent year-on-year increase in remittances sent by overseas Pakistanis, which stood at $2.7 billion in September 2021, and higher exports.
Moreover, the administrative measures taken by the government this week, after a series of actions taken by the central bank, to check rupee depreciation also failed to bear fruit.
The fresh all-time low of the local currency can be attributed to the latest reports of massive rise of 65 percent to $18.63 billion in the import bill during the first quarter of the current fiscal year (1QFY22), compared with $11.28 billion in the corresponding period of the last year.
The higher import bill also widened the trade deficit significantly. The trade deficit ballooned by almost 100 per cent to $11.66 billion during the quarter under review, compared with the deficit of $5.81 billion in the same period of the last year.
On the other hand, the Afghan situation has also been impacting the rupee-dollar parity since August 15. The Pakistani rupee shed Rs0.60 during the last three days against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs13.71. The local unit has shed Rs10.86 against the US dollar in the current year 2021.
The local currency has maintained a downtrend after it touched 22-month high of Rs152.48 in May 2021, losing a cumulative Rs18.82 in the past five months to date.
Stock Exchange market opened on a positive note and crossed the 44,000 points psychological level; however later on, it failed to sustain the gains amid ongoing political turbulence in the federal capital and confusion over the appointment of new director general of the premier spy agency Inter-Services Intelligence (ISI), which damaged investors’ confidence.
However, the concerns surrounding an uptick in local fuel and energy prices on recommendation of the International Monetary Fund (IMF) also forced investors to book profit on current valuations.
The IMF’s fresh demand has surfaced during the ongoing virtual talks in the context of losses incurred on account of non-collection of petroleum levy of over Rs600 billion during the current fiscal year.
The IMF also recommended further jack up in the base price of electricity tariff to the tune of Rs1.40 per unit to curtail the surge in circular debt. The IMF has also asked Pakistan to take additional taxation measures in the shape of income tax, sales tax, and regulatory duty for jacking up the annual tax collection target from Rs5.8 trillion to Rs6.3 trillion.
The KSE-100 Index moved in a range of 1,105.1 points, showing an intra-day high of 44,172.7 points and a low of 43,067.6 points. Among other indices, the KSE All Share Index shed 375.71 points (-1.24 percent) to close at 29,850.69 points, while All Share Islamic Index shed 304.68 points (-1.42 percent) to close at 21,163.92 points.
A total of 369 companies traded shares in the stock exchange, out of them shares of 71 closed up, shares of 279 closed down while shares of 19 companies remained unchanged. Out of 95 traded companies in the KSE-100 Index, 14 closed up, 77 closed down and while four remained unchanged.
The overall market volumes decreased by 49.95 million to 354.96 million shares. Total volume traded for the KSE-100 Index was 156.34 million shares. The number of total trades decreased by 13,762 to 117,084, while the value traded decreased by Rs3.31 billion to Rs12.29 billion. The market capitalisation decreased by Rs104.06 billion.
Among scrips, HASCOL led the table with 36.76 million shares, followed by WTL (28.87 million) and TELE (17.01 million). Stocks that contributed significantly to the volumes include HASCOL, WTL, TELE, GGL and TRG, which formed over 32 percent of total volumes.
Sector wise, the index was let down by technology and communication with 185 points, cement with 107 points, oil and gas exploration companies with 66 points, commercial banks with 45 points and food & personal care products with 39 points. The most points taken off the index were by TRG which stripped the index of 110 points followed by SYS with 63 points, UBL with 41 points, LUCK with 28 points and ENGRO with 24 points.
The sectors propping up the index were power generation and distribution with 11 points, and real estate investment trust and paper and board with one point each. The most points added to the index were by ABL which contributed 16 points followed by HBL with 16 points, HUBC with 16 points, FFC with 6 points and FABL with 5 points.