Stocks climb on hope of status quo in interest rate

Stocks ended up in anticipation that the central bank may keep the discount rate unchanged in tomorrow's statement.

KARACHI: Stocks ended up on Tuesday following local buying in anticipation that the central bank may opt to keep the discount rate unchanged in Wednesday’s monetary policy statement.

The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.45 per cent or 44.28 points higher at 9,981.07.

Moreover, easing of political tension after the Supreme Court adjourned hearings in the NRO case and more importantly the resolve by military and heads of state to ensure there is no harm done to democracy also led to the gains, said Elixir Securities equity dealer Faisal Bilwani.

The likely implementation of reformed general sales tax (GST) from October 1 is a step in the right direction as that will help in getting the much-awaited International Monetary Fund tranche. That also boosted investor sentiment, the analyst said.

The central bank raised its key policy rate by 50 basis points to 13 per cent in July. Analysts are divided this time with some predicting a similar hike this time around while others expect the rate to remain unchanged.

Turnover was 86.74 million shares compared with 69 million shares on Monday.

Bank Alfalah attracted attention as market speculates the stock has bottomed out at current levels, added Bilwani. The scrip gained Rs0.17 to close at Rs8.07. Sui Southern Gas Company remained firm throughout the day gaining 4.36 per cent as the Oil and Gas Regulatory Authority provided interim relief to the company by raising the unaccounted for gas allowance to 7 per cent which is likely to boost its profits, the analyst added.

Shares of 391 companies were traded during the day. At the end of the day, 211 stocks closed higher, 161 declined and 19 remained unchanged. The value of shares traded during the day was Rs2.9 billion.  Attock Petroleum advanced 1.01 per cent on expectation of better earnings and payout in its fiscal year 2010 results scheduled to be announced on Wednesday.

Key results of Pakistan Oilfields and Attock Petroleum this week will guide the oil sector in the near future, the analyst said.

Lotte Pakistan was the volume leader with 10.07 million shares falling Rs0.12 to finish at Rs8.75. It was followed by Bank Alfalah with 8.18 million shares and TRG Pakistan with 7.87 million shares firming Rs0.06 to close at Rs4.23.

Published in The Express Tribune, September 29^th, 2010.