Stocks dive over hike in T-bills yield

Market watch
Stocks dive over hike in T-bills yield
Benchmark KSE-100 index sheds 518.13 points to settle at 42,237.91
OUR CORRESPONDENT
KARACHI
Selling pressure gripped the Pakistan Stock Exchange on Thursday, following an increase in treasury bill yields by 75 basis points to 15.25% and predictions of a further hike in the policy rate.
Pushed by these developments, the bourse faced panic selling as market players opted to offload their stockholdings at attractive valuations. Resultantly, the KSE-100 index lost over 500 points.
Moreover, Nepra’s announcement of increase in power tariff to revive the IMF programme and surge in National Savings rates further dented the investor confidence and the index saw a bearish close.
Earlier, trading kicked off with minor ups and downs but soon selling pressure emerged in early hours. The index remained in the negative zone throughout the day, touching an intra-day low of 42,132.98 points. The bourse ended the day deep in the red.
At close, the benchmark KSE-100 index recorded a decline of 518.13 points, or 1.21%, to settle at 42,237.91 points.
Topline Securities, in its report, said that Pakistan equities witnessed a bearish trend in the backdrop of increase in the yields of treasury bills.
“The yields have risen 55-75bps for different tenures in yesterday’s (Wednesday’s) auction,” Topline said.
Investors opted to stay on the sidelines, which pushed the benchmark index down. During the day, the KSE-100 index hit an intra-day low at 42,133 (down 623 points, or 1.46%).
However, value-hunting kicked in at that level, which assisted the benchmark index to make some recovery and it eventually settled at 42,238 (down 518 points, or 1.21%) for the day.
Bank, cement and E&P sectors’ stocks contributed negatively to the benchmark index where HBL, Lucky Cement, OGDC and UBL lost 133 points cumulatively, it added.
On the flip side, Mari Petroleum, Standard Chartered Bank and NBP saw some buying interest as they added 23 points collectively.
Around 157 million shares were traded while the total traded value came in at Rs5.3 billion. Pakistan Refinery was the volume leader with trading in 15 million shares.
A report of Arif Habib Limited stated that the market saw the continuation of selling momentum from the previous session as a rise in three-month T-bill yields by 75bps to 15.25% raised concerns about a possible hike in the policy rate.
The KSE-100 index hit an intra-day low of 623 points as selling pressure was witnessed across the board.
Volumes remained dull although third-tier stocks were in the limelight, it added.
Sectors contributing to the performance included banks (-105.8 points), fertiliser (-66.8 points), cement (-62.3 points), technology (-48.7 points) and chemicals (-45.8 points).
Volumes decreased from 194.4m shares to 157.0m shares (-19.2% DOD).
Average traded value also decreased by 1.2% to reach $26.8m as against $ 27.1m, the report added.
Stocks that contributed significantly to the volume are PRL, UNITY, CNERGY, SILK and WTL.
JS Global analyst Mubashir Anis Naviwala said that the KSE-100 Index witnessed a bearish session today and closed at 42,238, losing 518 points day-on-day. 
Total traded volume for the day stood at 157m shares. Major laggards for the day were THALL (-7.5%), COLG (-4.5%), AVN (-4.3%), INIL (-4.2%) and BNWM (-4.1%). 
“Going forward, we recommend investors to stay cautious and avail any downside as a buying opportunity in the Banking sector,” said the analyst.
Overall trading volumes decreased to 157 million shares compared with Wednesday’s tally of 194.4 million. The value of shares traded during the day was Rs5.3 billion.
Shares of 345 companies were traded. At the end of the day, 75 stocks closed higher, 254 declined and 16 remained unchanged.
Pak Refinery was the volume leader with 14.9 million shares, gaining Rs0.19 to close at Rs17.95. It was followed by Unity Foods with 10.9 million shares, losing Rs0.44 to close at Rs21.86 and Cnergyico PK with 9.87 million shares, losing Rs0.17 to close at Rs5.40.
Foreign institutional investors were net sellers of Rs359 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan