KARACHI: The Pakistan Stock Exchange (PSX) witnessed major selling pressure on Monday as the benchmark KSE-100 index shed over 1,000 points at the start of the day.
The market began its slide soon after opening at 42,424.48 points, with the benchmark KSE-100 index down 1,111 points or 2.55% by 10:10am.
Meanwhile, the rupee crossed a low of Rs193 against the US dollar in the inter-bank market.
Alpha Beta Core CEO Khurram Schehzad said that investors were expecting an increase in oil prices after midnight causing the subsidy to drop.
Explaining what he meant by subsidy, Schehzad said that the oil is currently being sold for an even lower price in the local markets than in the international market and the government is paying the taxes in the form of a subsidy.
In Schehzad’s view, the subsidy is not the problem but dealing with it is.
“The subsidy must be given smartly or should be targeted to only small vehicles,” he said.
Speaking about the government’s claims of the subsidies on oil prices being non-funded, Schehzad said that it was a political decision and there was no supporter for the subsidy.
“The subsidy being funded means if you have a greater revenue and lesser expenses, you can invest the revenue somewhere else and fund any expense but nothing can be funded when there are already greater expenses even if there is a slight rise in the revenue.”
Schehzad said that the incumbent govt was expected to pass on things as soon as it took office but they adopted an opposite policy which increased the energy requirements.
“Closing market for a single day or closing early would make an impact of $1 billion to $1.5 billion,” he said.
