Stocks close negative as investors ignore SBP’s rate cut

The investors at Pakistan stock market ignored the 50bps cut in discount rate by the State Bank of Pakistan (SBP) with the index that extending previous week’s losses closed Monday in negative over rumours of likely probe against brokers.

The Karachi Stock Exchange (KSE)-100 index lost 287.99 points to close at 33,384.73 points as compared to 33,672.72 of the previous session. The KSE-30 Index shed 152.94 points and closed at 20,337.94 points against 204, 90.88 points of the last closing.

“Pakistan equities closed negative in lacklustre trading as the weekend announcements of 50bps rate cut by SBP turned out to be a non-event. The stocks opened positive with investors cheering the central bank’s decision in early trade, however exceptionally thin volumes turned the moods sour,” said Elixir Securities’ analyst Faisal Bilwani.

He said the banks led the decline the while wider market was also lower with Oil stocks contributing to slide track global crude. Interestingly, macros were broadly ignored while rumours related to brokers’ investigations and compliance issues emerged, he added.

“We expect the market to trade in narrow range with volumes likely to pick up as we get closer to the weekend. The market participants will closely track the regional developments ahead of a key meeting of US federal reserve on interest rates,” said Bilwani.

Habib Metropolitan Financial Services’ analyst Kumail Chevelwalla said SBP slashed the discount rate by 50bps, which supported the index to open on a positive note; however celebrations proved to be short-lived.

He said in the absence of any major trigger, the turnover hit 3 month low with only 133 million volumes traded throughout the day. “With investors largely ignoring the excitement of discount rate cut, we believe the index to trade range bound with low volumes,” Chevelwalla believed.The market volume decreased to 133.618 million shares traded as compared to 151.719 million shares traded in the previous session. Trading value at the local bourse fell to Rs 5.237 billion against Rs 6.570 billion of the previous session. Out of 353 scrips, 75 scrips advanced, 266 scrips declined while the value of 12 scrips remained unchanged.

The KMI-30 index lost 226.95 points to close at 55,343.46 points as compared to 55,570.41 points of the previous session.

The KSE all-share index went 221.22 points down to close at 23,340.40 points as compared to 23,561.62 points of the previous session. Byco Petroleum was the volume leader in the market with 16.697 million shares as it closed at Rs 25.02 followed by Dewan Cement with trading of 9.752 million shares and closed at Rs 17.72. Pak Elektron SPOT traded 9.154 million shares and closed at Rs 75.51.

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