Stocks plummet on discount rate surprise
The stock market fell sharply on Monday after an unexpected increase in discount rate by the central bank.
The stock market fell sharply on Monday after an unexpected increase in discount rate by the central bank resulted in a sell-off at the bourse, dealers said.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 1.38 per cent or 145.49 points to end at 10,373.53.
The State Bank of Pakistan on Friday evening surprised many by increasing its discount rate to 13 per cent from 12.5 per cent. The general consensus was that the policy rate would remain unchanged as a survey of 35 fund managers had revealed that 93 per cent expected that status quo would be maintained.
Volumes remained healthy as buying was witnessed at lower levels with investors betting on expected profits during the current earnings season, said Topline Securities equity dealer Samar Iqbal.
Trade volumes rose to 79.51 million shares compared with Friday’s tally of 64 million shares.
Shares of 380 companies were traded on Monday. At the end of the day, 236 stocks closed lower, 129 moved higher and 15 remained unchanged. The value of shares traded during the day was Rs3.86 billion. Foreign investors made net investments worth $3.81 million on Monday, buying $5.29 million shares and selling $1.48 million, according to data released by the National Clearing Company.
Fauji Fertiliser Bin Qasim Limited was the volume leader with 5.17 million shares, gaining Rs0.29 to close at Rs29.73.
National Bank of Pakistan was second with 5.1 million shares as it is likely to be a major beneficiary of the increase in discount rate, said JS Global Capital analyst Ahmed Rauf.
Pakistan Telecommunication Company Limited came third with 4.4 million shares, losing Rs0.47 to close at Rs19.63.
TRG Pakistan, which was at fourth position in terms of volume, gained Rs0.11 to end at Rs4.2 on news that the company sold two of its indirect subsidiaries for approximately $13 million.
MCB Bank is due to announce its results on Thursday while Pakistan Petroleum Ltd and Pakistan State Oil are scheduled to announce their results on Friday.
Indus Motor rose 4.6 per cent to close at Rs285.77 as it announced an investment of Rs1.6bn for indigenisation of parts, added Rauf.
Published in The Express Tribune, August 3rd, 2010.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 1.38 per cent or 145.49 points to end at 10,373.53.
The State Bank of Pakistan on Friday evening surprised many by increasing its discount rate to 13 per cent from 12.5 per cent. The general consensus was that the policy rate would remain unchanged as a survey of 35 fund managers had revealed that 93 per cent expected that status quo would be maintained.
Volumes remained healthy as buying was witnessed at lower levels with investors betting on expected profits during the current earnings season, said Topline Securities equity dealer Samar Iqbal.
Trade volumes rose to 79.51 million shares compared with Friday’s tally of 64 million shares.
Shares of 380 companies were traded on Monday. At the end of the day, 236 stocks closed lower, 129 moved higher and 15 remained unchanged. The value of shares traded during the day was Rs3.86 billion. Foreign investors made net investments worth $3.81 million on Monday, buying $5.29 million shares and selling $1.48 million, according to data released by the National Clearing Company.
Fauji Fertiliser Bin Qasim Limited was the volume leader with 5.17 million shares, gaining Rs0.29 to close at Rs29.73.
National Bank of Pakistan was second with 5.1 million shares as it is likely to be a major beneficiary of the increase in discount rate, said JS Global Capital analyst Ahmed Rauf.
Pakistan Telecommunication Company Limited came third with 4.4 million shares, losing Rs0.47 to close at Rs19.63.
TRG Pakistan, which was at fourth position in terms of volume, gained Rs0.11 to end at Rs4.2 on news that the company sold two of its indirect subsidiaries for approximately $13 million.
MCB Bank is due to announce its results on Thursday while Pakistan Petroleum Ltd and Pakistan State Oil are scheduled to announce their results on Friday.
Indus Motor rose 4.6 per cent to close at Rs285.77 as it announced an investment of Rs1.6bn for indigenisation of parts, added Rauf.
Published in The Express Tribune, August 3rd, 2010.