Karachi December 02, 2021: KSE-100 drops 1,952 points down by 4.3 percent in intraday (PST 1:00 PM) to trade at 43,416.87 due to more than 200 basis points increase in cut-off yields in yesterday’s T-Bill Auction and historic high trade deficit as per information available at Pakistan Stock Exchange (PSX).
KSE 30 Index is down 4.64 percent with fall of 812.6 points to trade at 16,768 points. The Exchange will apply index-based market halt in case KSE-30 index 5 percent either way from its opening index value for consecutive 5 minutes the trading in all securities shall be halted for 45 minutes. Once the Market Halt triggered on the intimation of Exchange, the Mark to Mark(MTM) Losses shall be determined by the Company on the basis of last executed price during trading hours on a trading day, Each Clearing Member is required to pay MTM Losses within prescribed time on the trade date and a new Report will be available in NCC system where CM can view MTM Losses demand for all Markets.
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Upon imposition of a market halts all equity and equity based derivative markets shall be suspended. The market shall have a five (05) minutes pre-open before its re-opening and NCCPL shall collect Mark-to-Market losses from its clearing members as per its regulations. Only those BCMs/NBCMs shall be allowed to trade after resumption of trading for that day which have deposited the required margins with NCCPL.
Provided that the market halt shall not be applicable in case KSE-30 index moves beyond 5%, as applicable in the last 1 hour of the market.
Introduction of Index-based market halts would facilitate in managing the risk as market participants respond to systematic factors affecting securities across many sectors. Imposing such halts on index movement would allow adequate cooling-off period to investors to assess the market.
Month of November saw a steep rise of 162.4 per cent in trade deficit which was driven largely by more than triple increase in imports to USD 8.01 billion compared to exports of USD 2.9 billion from the country.
The cut-off yields on three-month treasury bills (T-bills) were further increased by 229 basis points in the auction on Wednesday to 10.789 percnet, leading to a 203 basis point increase from the policy rate announced in November. Similarly, the cut-off yields on six-month and 12-months treasury bills (T-bills) were further increased to 11.5 and 11.51 percent.
The government raised Rs526 billion through the three, six-month T-bills and 12-month papers. However, once again the government remained much below its target set for this auction with Rs750bn.