Stocks retreat on fears of rise in lending rate
KARACHI: Bears took charge at the Pakistan Stock Exchange on Thursday as investors reacted negatively to the reports of a likely hike in the key interest rate.
Arif Habib Ltd said the index of representative shares hovered on the lower side owing to speculations that the State Bank of Pakistan (SBP) would increase the policy rate in the next few days given that the cut-off yields on treasury bills in Wednesday’s auction were higher than expected.
Later in the day, the SBP dispelled the speculation and said the next meeting of the Monetary Policy Committee was “so far scheduled” for March 16.
Prevailing political uncertainty also kept investors at bay, the brokerage added.
As a result, the KSE-100 index settled at 40,838.51 points, down 329.09 points or 0.8 per cent from the preceding session.
The overall trading volume decreased 23.5pc to 150.2 million shares. The traded value went down 9.7pc to $22.1m on a day-on-day basis.
Stocks contributing significantly to the traded volume included WorldCall Telecom Ltd (14.1m shares), Maple Leaf Cement Factory Ltd (10.4m shares), Kot Addu Power Company Ltd (9.7m shares), the Hub Power Company Ltd (7.9m shares) and Dewan Farooque Motors Ltd (6.8m shares).
Sectors contributing negatively to the index performance were commercial banking (80.4 points), exploration and production (78.7 points), technology and communication (48.5 points), cement (37 points) and oil marketing (21.3 points).
Companies registering the biggest increases in their share prices in absolute terms were Good Luck Industries Ltd (Rs50), Khyber Tobacco Company Ltd (Rs27.53), Indus Motor Company Ltd (Rs9.14), S.S. Oil Mills Ltd (Rs7) and Towellers Ltd (Rs6.79).
Companies that recorded the biggest declines in their share prices in absolute terms were Bhanero Textile Mills Ltd (Rs78.84), Reliance Cotton Spinning Mills Ltd (Rs45), Sanofi-Aventis Pakistan Ltd (Rs35), Philip Morris Pakistan Ltd (Rs31.31) and Pakistan Tobacco Company Ltd (Rs28.75).
Foreign investors were net sellers as they offloaded shares worth $0.44m.
Published in Dawn, February 24th, 2023