Equity market closes in red over policy rate hike

Equity market closes in red over policy rate hike

Latifur Rehman
May 23, 2022

KARACHI: The Pakistan bourse observed a steep fall on Monday due to the expectations of a sharp hike in the policy rate in the Monetary Policy Statement (MPS) besides rising political tensions.

“The secondary market yields have already peaked. The political tensions and uncertainty are also high in the wake of PTI’s call for a long march on May 25. As a result, the market marked an intraday low of 42,345, shedding 756 points to close at a 42,440 level,” an analyst at Pearl Securities said.

“As expected, the State Bank of Pakistan (SBP) hiked the policy rate by 150bps. Therefore, going forward we expect the market to remain under pressure. Hence, we recommend our investors adopt the “Sell on Strength” strategy in the upcoming sessions.”

The Pakistan Stock Exchange KSE-100 shares Index shed 1.53 per cent, or 660.46 points, to close at 42,440.25 points. The KSE-30 shares Index shed 1.68 per cent, or 274.17 points, to close at 16,092.94 points.

As many as 314 scrips were active of which 48 advanced, 250 declined and 16 remained unchanged.

The ready market volumes stood at 118.98 million shares, compared with the turnover of 189.92 million shares in the last trading session.

An analyst at Arif Habib Limited said that the market witnessed a bloodbath session as investors remained under pressure throughout the day.

“The benchmark KSE-100 Index nosedived from the beginning of the session as an increase in the political noise over the weekend and uncertainty regarding resumption of the International Monetary Fund (IMF) programme along with continued depreciation of rupee and rumor of rate hike in the monetary policy, shattering investors’ confidence,” he added.

The companies which reflected the highest gains included Bhanero Tex up Rs102.45 to close at Rs1,525/share, and Blessed Tex up Rs19.99 to close at Rs509.99/share.

The companies which reflected the most losses included Bata (Pak) down Rs99 to close at Rs1,900/share, and Rafhan Maize down Rs90 to close at Rs9,900/share.

The highest volumes were witnessed in Silk Bank Ltd with a turnover of 9.97 million shares. The scrip gained 4 paisa to close at Rs1.32/share, followed by WorldCall Telecom with a turnover of 7.62 million shares. It shed 9 paisas to close at Rs1.50/share. K-Electric Ltd remained the third with a turnover of 6.12 million shares. It shed 8 paisas to finish at Rs2.50/share.