KARACHI: Pakistan equities posted a decline on Tuesday after the country’s supreme court suspended government’s notification of a three-year tenure extension given to army chief, Gen Qamar Javed Bajwa, the equity analysts say.
The market opened on a positive note and recorded surge of 356 points in the morning trade before the news of top court suspending the extension notification, which stirred panic among investors.
The market skidded 676 points during the session with intermittent attempts of bulls making entry but failed to sustain selling pressure.
“Stocks fell sharply lower on institutional selling after the supreme court suspended a government order granting a three-year term extension to current army chief. Uncertainty over the Impact of SBP (State Bank of Pakistan) status quo policy on leveraged scrips and economic uncertainty played a catalyst role in bearish close,” Ahsan Mehanti, Chief Executive at Arif Habib Corporation, told Arab News.
On Tuesday, the top court suspended Gen Bajwa’s extension notification on procedural grounds — a move many see as staff-off between country’s two powerful institutions.
“Ostensibly, the summary and approval of [the army chief’s tenure] extension is not correct,” Chief Justice Asif Saeed Khan said during the court proceedings. “The prime minister doesn’t have the authority to extend the army chief’s tenure.”
Gen Bajwa, who was due to retire on November 29 after completing his three-year term as the head of the country’s powerful military, was given extension in August this year on regional security environment grounds.
The stocks during the trading session oscillated by 1033 points before closing at 37795, lower by 417 points.
“As a result of confusion among investors, apparently those who booked positions earlier in the session resorted to selling to stem losses, trading volumes increased to 488 million shares. Besides, selling pressure was observed in Cement sector where a rumor of an increase in cement price caused investors to take positions,” according to Arif Habib Limited.
“In today’s session, the Pakistan Stock Exchange PSX witnessed traded volume of 488 million shares that increased by 102 percent on a daily basis which is a 30-month high (617 trading sessions), last seen on May 24, 2017 (607 million shares)”, Samiullah Tariq, Director Research at Arif Habib Limited commented.
Traded value also surged by 110 percent on a daily basis to $118 million, which is a one year high, since November 30, 2018 when $172 million worth of shares were traded.
