On Tuesday, the Pakistan Stock Exchange (PSX) saw a notable drop, with shares plunging over 600 points during intraday trading.
The KSE-100 index declined by 622.46 points, or 0.76%, closing at 81,214.45 points, a decrease from the previous day’s close of 81,850.50 points by 12:22 PM.
Raza Jafri, CEO of EFG Hermes Pakistan, attributed the market’s slump to disappointing performances from state-owned oil exploration companies. He also mentioned that independent power producers (IPPs) were facing pressure amid reports of government plans to revise their contracts.
Earlier this month, the government initiated efforts to renegotiate IPP contracts to tackle what it termed “unsustainable” electricity tariffs. Power Minister Awais Leghari indicated that while positive news regarding these negotiations would emerge soon, significant relief in electricity prices is unlikely to happen immediately.
Analysts have also connected the market’s downturn to uncertainties regarding the government’s position on IPP capacity payments, as well as ongoing political instability following a Supreme Court decision that supported the PTI’s push for reserved seats. Investors are encouraged to focus on high-dividend stocks and companies likely to benefit from structural reforms.
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