KARACHI – The State Bank of Pakistan (SBP) announced the much awaited MPS statement where discount rate was kept unchanged. It seems that the decision lacked substance as the monetary policy statement carried major points indicating towards a rate rise rather than anything else.
As the uncertainty looms ensuing to Egyptian political turmoil, impact on commodity prices especially international crude oil prices is evident as Brent crude is currently trading over $100 per barrel. The Pakistani stock market seems indifferent to global political conditions, hence moving on its own path. Result expectation is already incorporated in prices, hence upsurge from current level would require strong triggers, said Bilal Asif at HMFS.
News, pertaining to withdrawal of deemed duty, dented the refinery sector at large as NRL went down by 13 percent, PRL 13.4 percent and ATRL 13.1 percent. From the onset of New Year, the stock market was in an unstoppable mood and reached a peak of 12,682 points by mid of the month. Investors were ignorant of the political warfare played during the first week of the month.
The Government’s decision to raise the petroleum price in the light of crude oil price increase in international market was widely rejected by coalition partners and opposition parties, hence the ruling party accepted opposition’s demand and withdrew the hike in petroleum prices. Inclination of foreign fund mangers towards the Asian market, along with an inflow of $63.3 million, helped sustain the positive trend.
News, pertaining to the urea and DAP price hike locally after announcement of gas curtailment, improved the fertiliser manufacturers margin. Furthermore, Fauji twins announced it financial results which were better in contrast to market expectations. Later, in the second half, cautious and prudent investors preferred to book gain as index hit a 2.5 year high level. In addition, corporate result announcement for year end caused price appreciation of major stocks.
Subsequent to the MPS, benchmark 6M Kibor has dropped by 14bps to midquote of 13.65 percent. Stock of money continues to undergo deceleration in growth to 7.7 percent on FYTD basis as the government’s borrowing from central bank has curtailed to Rs 124 billion. Growth in NFA, however, has offset the decline in NDA, as growth in money supply remains on the target of 15 percent for FY11.
Resilience of Paksitani rupee is admirable on CYTD basis, depicting meager appreciation of 0.12 percent.
