KARACHI: Amid anticipation of a significant cut in the interest rate ahead of the monetary policy announcement later in the day on Monday, the Pakistani share market witnessed the continuation of a robust buying spree, propelling the KSE index above 92,000 for the first time.
Ahsan Mehanti of Arif Habib Corporation said stocks closed at an all-time high as investors see a major rate cut following a substantial slashing of profit rates on national savings schemes by up to 360bps on Friday.
He added that investment commitments from Qatar for $3bn and Saudi Arabia for $2.8bn, upbeat petroleum [petrol, oil and lubricants] sales data surging by 18pc in October and rupee stability also bolstered investors’ confidence in the economy.
The benchmark KSE 100 index remained in the green zone throughout the session, hitting an intraday historic peak of 92,159.08 points, with a gain of 1,299.23 points. However, the index closed at a record 91,938.01 after adding 1,078.15 points or 1.19pc day-on-day.
As the State Bank of Pakistan was poised to cut its policy rate for the fourth straight time since June amid a faster-than-expected deceleration in inflation, equity investors remained busy in value-hunting. The Consumer Price Index-based inflation stood at 7.2pc in October, slightly higher than September’s 6.9pc, indicating a big gap between the policy rate of 17.5pc and the inflation number.
Topline Securities Ltd said the equities continued their remarkable ascent, extending their record-breaking rally as investors eagerly awaited the forthcoming monetary policy review.
After the close of trading at PSX, the SBP’s Monetary Policy Committee announced a 250bps cut in its policy rate against the market consensus expectations of 200bps, bringing it to 15pc from 17.5pc for the next two months. However, the trade and industry stakeholders demanded a cut of 500-700bps to a single digit.
Key contributors to the index’s rise were Systems Ltd, Lucky Cement, Cherat Cement, Hub Power, and Engro Corporation, which collectively added 611 points.
Improved market participation reflected growing investor confidence in the economy as the trading volume surged 26.54pc to 589.54m shares while its value rose 29.75pc to Rs29.95 day-on-day.
Stocks contributing significantly to the traded volume included Power Cement (56.69m shares), K-Electric (38.93m shares), Maple Leaf Cement (36.95m shares), WorldCall Telecom (22.87m shares) and Pakistan Petroleum (21.68m shares).
The shares registering the most significant increases in their prices in absolute terms were Indus Motor (Rs70.50), Rafhan Maize (Rs63.75), Unilever Foods (Rs60.75), Nestle Pakistan (Rs56.13) and Systems Ltd (Rs47.09).
The companies that suffered significant losses in their share prices in absolute terms were Bela Automotives (Rs40.59), Blessed Textiles (Rs23.20), Hallmark Company (Rs14.10), Hafiz Ltd (Rs13.87) and Service Industries (Rs12.14).
Foreigners turned net sellers as they offloaded shares worth $1.87m. However, mutual funds picked shares worth $6.63m.
Published in Dawn, November 5th, 2024
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