The Karachi stocks market on Thursday remained bearish on the back of what the equity analyst viewed the investors’ concern for a possible upward revision in the discount rate by the central bank.
This southward movement of the equity market the analysts said was despite the positives like hopes for the approval of $1.5 billion World Bank’s loan for economic stabilization and a $46 million surplus the country saw in its current account balance during July, the first month of FY14.
The State Bank of Pakistan, which in its last monetary policy statement on June 21 slashed the discount rate to 9 percent owing to declining inflation and low private sector credit, is widely being expected to increase the cost of borrowing at least by 50 basis points given the current rising trend in CPI inflation which in July was recorded above 8.3 percent. The monetary policy decision for the next couple of months is due to be unveiled next week.
Reacting strongly to the negative the Karachi Stocks Exchange saw all of its indicators setting in the red zone with the benchmark KSE 100-share index losing 300.95 points to close at 22,714.32 points compared to Wednesday’s 23,015.27 points. In percentage terms, the loss stands out to 0.31 percent. The intraday high and low, respectively, was recorded at 23,100.72 and 22,539.48 points.
“(The) stocks continued bearish trend amid growing fears for possible hike in (the) SBP policy rate announcement due next week,” commented senior equity analyst Ahsen Mehanti.
Besides, renewed concerns for rising circular debt in the energy sector, uncertain Pak-India relations, limited foreign interest and growing political uncertainty on the day of by-elections played a catalyst role in the bearish sentiments at the Karachi bourse, said Mehnati, a director at Arif Habib Securities. The free-float KSE 30 index shed 238.18 points and closed at 17,636.70 points as against 17,874.88 points of Wednesday.
The trading volume at the ready-counter was recorded at 217.488 million shares compared to 252.124 million traded on the previous day. The value of traded shares also declined to Rs 10.263 billion from Rs 10.668 billion. Of the total 357 scrips traded only 88’s gained in terms of value, 249 devalued and 20 remained unchanged. The market capital was another head that marked a negative trend by shrinking to Rs 5.615 trillion compared to Rs 5.684 trillion of the previous trading session.
Fauji Cement appeared as a volume leader of the day by counting its traded shares at 22.280 million. In terms of value, however, the cement giant saw its shares deprecating from Rs 14.68 to Rs 14.42. Bank of Punjab, NBP, Engro Foods, Maple Leaf, Lafrage Pak, Engro Polymaker, Telecard Limited, PTCL and Pakgen Power were other scrips which were traded amid the day’s bearish trend. On the future market, 28.98 million shares were traded against 34.49 million of Wednesday. “Consolidation continued post major earning announcements amid concerns for rising economic uncertainty, higher government debt and falling global commodities,” said the analysts.
