KARACHI: The stock market surged above the 80,000 level intraday on initial buying triggered by an interest rate cut and the fixing of an International Monetary Fund (IMF) board meeting to review a bailout for Pakistan, but late selling substantially trimmed the early gains on profit-taking mainly driven by foreign investors on Friday.
The State Bank of Pakistan (SBP) on Thursday delivered the much-anticipated third straight cut in its policy rate, which was above the market expectations of 150bp but far lower than the trade and industry’s demand of up 500bps reduction since inflation receded to single digits in August.
Ahsan Mehanti of Arif Habib Corporation said the 200bps cut in the interest rate to 17.5 per cent and the International Monetary Fund announcement that its executive board will review Pakistan’s $7bn new loan programme for approval on Sept 25 boosted the market sentiments.
In its review, Topline Securities said the rate cut and IMF board meeting were the two key catalysts for today’s bullish trend anticipated by the investor community.
Initially, the PSX commenced the day as per expectation and made an intraday high at 80,016.74, gaining 999 points or 1.27pc. However, selling headwinds pushed the benchmark KSE index below this level, hitting a low of 79,262.72. However, it settled at 79,333.06 after gaining 315.44 points or 0.40pc day-on-day.
The trading volume surged 56.78pc to 916.05 million shares, and the traded value increased by 29.77pc to Rs21.23bn day-on-day.
Stocks contributing significantly to the traded volume included WorldCall Telecom (87.80m shares), Pervez Consultancy (75.91m shares), Kohinoor Spinning Mills Ltd (63.75m shares), First Capital Securities (55.51m shares) and Pace Pakistan (35.18m shares).
The shares registering the most significant increases in their prices in absolute terms were Unilever Foods (Rs102.50), Ismail Industries (Rs93.97), Service Industries (Rs65.50), Pakistan Engineering (Rs43.00) and Mari Petroleum (Rs33.97).
The companies that suffered major losses in their share prices in absolute terms were Hoechst Pakistan (Rs49.00), Dynea Pakistan (Rs26.02), Shield Corporation (Rs20.60), Hallmark Company (Rs17.61) and Philip Morris (R14.79).
Foreign investors turned net sellers as they offloaded shares worth $2.89m.
Published in Dawn, September 14th, 2024
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