The KSE-100 index fell by 622.46 points, or 0.76%, reaching 81,214.45 points, down from the previous close of 81,850.50 points, by 12:22 PM.
Raza Jafri, CEO of EFG Hermes Pakistan, explained that the market was reacting negatively to disappointing results from state-owned oil exploration companies. He also pointed out that independent power producers (IPPs) were facing pressure due to reports that the government is planning to revise their contracts.
Earlier this month, the government announced it was renegotiating IPP contracts to address “unsustainable” electricity tariffs. Power Minister Awais Leghari mentioned last week that there would soon be “good news” regarding these negotiations, but he cautioned that significant relief in electricity prices wouldn’t come immediately.
Awais Ashraf, director of research at AKD Securities, noted that fears of potential termination or renegotiation of IPP contracts were contributing to the market’s downward trend. He also highlighted the Senate panel’s inquiry into possible manipulation of US dollar rates connected to the opening of letters of credit by commercial banks, which added further pressure on the index.
He recommended that investors think about putting their money into high-dividend stocks and firms that are likely to gain from the current structural reforms.
Analysts also linked the recent decline to uncertainty over the government’s approach to the IPP capacity payment issue and the political instability following the Supreme Court’s detailed verdict, which supported the PTI’s request for reserved seats.
