Daily Times

KARACHI: Bears once again reined the local bourse on Thursday as the market came under duress after the International Monetary Fund (IMF) suggested raising interest rate further to double digits henceforth may deteriorate Pakistani Rupee further down in the current fiscal year.

Pakistan equities closed red with benchmark KSE100 Index settling below 40,100 level, taking 2018 TD losses to 1.0 percent. Market kicked-off on a positive note making an intra-day high of 43 points, however it later skidded lower and bears dominated as benchmark Index made an intra-day low of 566 points – momentarily breaching the psychological 40000 level.

Moreover, Fitch, the rating agency, also sustained that the recent hike in the policy rates by 100 basis points to 8.5 percent won’t be enough to prevent further depreciation.

Financials, cements and power aggregately contributed -211 points where Lucky Cement, DG Khan Cement, Habib Bank Limited (HBL), MCB Bank, United Bank Limited (UBL) and Hubco closed negative.

Thursday’s major heavyweights namely, HBL, Pakistan Petroleum Limited (PPL), Oil Gas Development Company (OGDC), Engro, MCB and UBL cumulatively contributed -126 points.

Traded volumes slightly increased by 23 percent day-on-day (DoD) to 110 million shares while value traded increased to US$34 million. Top volume stocks were Fauji Fertiliser Limited (FFL) and TRG.

“We expect market to remain volatile and choppy with lack of any immediate triggers”, said an equity analyst Maaz Mulla.

On the corporate front, Fauji Fertilizer Bin Qasim Limited (FFBL) gained 2.76 percnet as other shareholders have appointed Financial and Legal Advisors to move ahead on the proposed divestment of 51 percent shareholding in Fauji Foods Limited FFL PA +2.50% to Inner Mongolia Yili Industrial Group Co. Limited.

Murtaza Jafar of Elixir Research expects weaker market in near term until clarity on curtailment of twin deficits emerges – key decisions from the government will likely be announced after the By-Elections, scheduled for October 14, 2018.

Published in Daily Times, September 5^th 2018.