Pakistan Stock exchange crises 2022-23 – By: Hamait Tariq
The stock market provides a center network for transactions where buyers and sellers meet at the same time. The stock market plays a very important role in the mobilization of capital and growth in the economy of any country. Stock exchange crises are hard to predict due to their unpredictable nature. The main factors on which the stock market is dependent are interest rate (IR), the Consumers price index (CPI) which predicts the rate of inflammation, Exchange rate(ER), and Foreign direct investment(FDI) the fluidity of these factors is the reason, that makes this open market system an unpredictable .
The year 2022 was called the bad year for PSX, PSX market in 2022 started with the KSE-100 index (44,886.89) and KSE ALL SHARE INDEX with 30,789.27 points on 3rd January. KSE-100 is a benchmark to examine the progress of the Pakistan stock exchange. According to PSX five year progress report the KSE-100 index by the end of the year 2021 was 44,596.07. While according to the same PSX progress report the KSE-100 at the end of 2022 was 42,420.00. There is a clear difference between the index points of both years. Various reasons caused the huge downfall of the Pakistan stock exchange in 2022.
Political instability throughout the year, the rejection of loans from the IMF twice a year, the increase in the taxation of a majority of common goods, the increase in the prices of petrol, and the freefall in foreign exchange reserves caused the market to lag throughout the whole year. Not only PSX but all the international stock market faced a downfall in 2022. Many natural disasters also hit this free-flow market, as Covid19 spread, it closed the business around the whole world, and many major business firms faced difficult situations related to capital, then there was the stock market which provides a base for many startups also went through downfall, and the effects of Covid19 was also seen in 2022. But many economists were predicting that Pakistan Stock Exchange will be improved in 2023.
Pakistan Stock Exchange market started at 40,815.90 on 2nd January 2023 and it was less as compared to the previous year. It was expected that a big relief would be given to the stock exchange market in budget 2022-23, and the KSE-100 index will go up after the budget but it was not seen as was expected, the points of KSE-100 were raised to 41,904.21, but it faces downfall the very next working day of PSX. KSE-100 by the end of the first half of the year 2023 was 41,452.69 which is still low than the last year which was considered a bad year because all the progress that PSX has gained during the last two years 2020 and 2021 was all lost.
