Market watch: Stock market surprises investors by ending in black, volatility remains

Benchmark KSE-100 index rises 75 points.


Our Correspondent September 16, 2013
The banking sector drove the market up after the State Bank of Pakistan (SBP) raised the policy rate by 50bps to 9.5% contrary to market expectation of leaving it unchanged, says an analyst. PHOTO: REUTERS/FILE

KARACHI: The stock exchange ended in the black contrary to expectations of a sharp reaction to the unexpected hike in discount rates.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index 0.32% or 74.64 points to end at 23,242.68 point level.

“The banking sector drove the market up after the State Bank of Pakistan (SBP) raised the policy rate by 50bps to 9.5% contrary to market expectation of leaving it unchanged. The surprise move though did not surprisingly lead to a broader sell off as the market had already seen a correction of over 8% from its recent top which had reduced the quantum of leveraged positions in the market via the margin calls entailing the drop,” said Raheel Ashraf of JS Global.



“The cement sector saw a bounce-back led on market reports that Lucky Cement’s CEO would be appointed as the head of the All Pakistan Cement Manufacturer’s Association which would resolve issues within the cartel.” Said Ashraf.

“Pakistan equities traded volatile and managed to close up as financials gained after Friday’s rate hike by State Bank of Pakistan.” Said Faisal Bilwani of Elixir Securites.

“Index heavy MCB Bank (MCB PA +3.2%) led the charge with most banks soon following suit and ending the day higher on institutional interest. Broader market, excluding banks, traded down with textiles bearing the brunt of the selling, however cements witnessed a sharp bounce back in later half of trading on reports that the meeting between cement makers was a success and the marketing arrangement is intact.” Bilwani added.

Trade volumes rose to 242 million shares compared with Friday’s tally of 191 million shares.



Shares of 356 companies were traded on Monday. At the end of the day 142 stocks closed higher, 157 declined while 57 remained unchanged. The value of shares traded during the day was Rs8.4 billion.

Bank of Punjab was the volume leader with 42.2 million shares gaining Rs0.4 to finish at Rs13.09. It was followed by Maple Leaf Cement with 20.9 million shares gaining Rs0.51 to close at Rs26.68 and Fauji Cement (SPOT) with 19.4 million shares gaining Rs0.05 to close at Rs14.06.

Foreign institutional investors were net sellers of Rs234 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 17th,  2013.

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