The sentiments-driven rupee and stocks markets continued Monday to receive fresh blows on the back of what the market participants said political uncertainty haunting the country’s fragile economy for the last fortnight in the name of “Azadi” and Inqilab” marches.
The rupee is keeping its southward journey again the US dollar and has depreciated by more than Rs 4 since August 14 when the Pakistan Tehreek-e-Insaf (PTI) and the Pakistan Awami Tehreek (PAT) had taken to the streets to protest last year’s alleged polls rigging by PML-N in connivance with judiciary, Election Commission of Pakistan and a section of media.
Also, the country’s largest stocks market shed 352.41 points or 1.22 per cent to set in red zone at 28,519.34 points against last week’s 28,871.75 points.
The money market saw the otherwise strong rupee devaluing Monday to Rs 103 against the greenback. The State Bank notified for Tuesday Rs 103.13 as the inter-bank exchange rate for the US currency.
“The rupee has fallen by more than Rs 4 ever since this political hustle and bustle has commenced,” said a money dealer on the open market.
The rupee-dollar parity which, the dealer lamented, stood firm at Rs 98.80 before the “sit-ins” had come down to Rs 103.
“If not interrupted through ending the ongoing political impasse, an ensuing panic would weaken the rupee as low as to Rs 110 level,” apprehended the money exchanger.
The central bank, he claimed, was so far doing its best to stabilise the rupee. He blasted the PTI leader for urging his supporters to remit their money through “Hundi” that, the dealer said, would reflect adversely on the local exchange rate.
“Imran Khan is the reason,” the dealer was outright and asked to fix responsibility for the current market turmoil.
The fresh decline by the rupee also reflected on the risk-averse investors’ sentiments on the equity market.
“(The) market fell due to ongoing political uncertainty coupled with (a) sharp Pak Rupee depreciation,” commented Samar Iqbal, assistant vice president of equity sales at Topline Securities.
While the benchmark, KSE 100-share, index tumbled by more than 350 points, most of the 308 scrips traded lost value. Of those saw their stakes changing hands on the day only 71 appreciated, 218 depreciated and 19 remained unchanged.
The overall value of the shares traded, however, rose to Rs 3.9 billion from Rs 3.7 billion of last trading session.
The trading volumes improved to 82.5 million shares from Friday’s 68 million while the market capital slightly contracted to Rs 6.6 trillion compared to 6.7 trillion of last week.
“Volumes though showed an improvement of 21 per cent to 83 million shares, the value remained at $40 million,” said equity analyst Samar.
The Pakistan Elektron Ltd appeared as a volume leader after having counted 19 million of its listed shares traded.
The company was able to lure share-traders because of what Samar said its “better than expected June quarter result announcement”.
Having depicted what the analysts said an “immediate reaction” of nose-diving by a record 1,300 plus points on a single day, Aug 11, the equity market appears, by and large, to be stable, thanks to the state-owned listed companies’ “support” as a national duty.
The stocks investors, specially the retailers, however, are staying cautious to political developments unfolding newer deadlocks in Islamabad on a daily basis. This uncertainty, the market observers believe, causes intermittent socks like Monday’s to otherwise stable markets.
