Market watch: Interest rate cut fails to excite; bourse witnesses a dull day

Benchmark KSE-100 index falls 44 points.


Our Correspondent December 17, 2012

KARACHI: The local bourse closed in red with trading activity remaining thin as the rate cut announced on Friday failed to bring excitement. Activity remained confined to small and mid-cap stocks, whereas macroeconomic concerns were the talk of the town. As a possible cause of this, investors remained on the sidelines resulting in a dull day.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.26% or 44.07 points to end at 16,801.02 point level. Trade volumes remained exceptionally low and fell to 92 million shares compared with Friday’s tally of 130 million shares.

The State Bank of Pakistan, in its monetary policy announcement on Friday, cut the interest rate by 50 basis points to 9.5%, bringing it down to single digits for the first time in six years. Banks faced the brunt of the new monetary policy as investors anticipated a reduction in their profitability due to lower discount rates. However, MCB Bank helped save the index from a big fall.

“Investors remained on the sidelines due to continuous depreciation in the rupee’s value against the greenback,” said Samar Iqbal, equity dealer at Topline Securities. With a continuous drain on country’s foreign exchange reserves and unpredictable nature of inflows, the rupee has remained under pressure. The rupee has already depreciated 3% against the dollar in fiscal 2013 to date, according toa research note from Elixir Securities.

Moreover, the index heavyweight Oil and Gas Development Company closed in red, down 1.2%, dragging the index lower by over 25 points, reported Faisal Bilwani, analyst at Elixir Securities.

Shares of 373 companies were traded on Monday. The value of shares traded during the day was Rs2.52 billion.

Maple Leaf Cement was the volume leader with 14.75 million shares traded, losing Rs0.09 to finish at Rs14.83. It was followed by Tariq Glass Industries with 5.17 million shares gaining Rs1 to close at Rs21.05 and Jahangir Siddiqui and Company with 3.6 million shares falling Rs0.28 to close at Rs16.70.

Foreign institutional investors were buyers of 149.25 million and sellers of Rs77.28 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, December 18th, 2012.

t;line-height:9.9pt;mso-layout-grid-align:none; text-autospace:none;vertical-align:middle'>Tuwairqi Steel has engaged a local firm named Shajarpak for marketing and distribution of DRI as well as business development. In an effort to create awareness of the new technology, Shajarpak has sold some quantity of imported DRI pellets in the local market.

 

Speaking on the occasion, Shajarpak Managing Director Khwaja Usman said “with the international giant Tuwairqi leading us, we can open new doors and possibilities, which will herald rapid growth and introduce new concepts in the iron and steel industry.”

He said his company had initially sold 23,000 tons of imported DRI pellets in quick time in the local market, which would guarantee the quality of products.

Published in The Express Tribune, December 18th, 2012.

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