Pakistan Stock Exchange absorbs interest rate hike shock

The benchmark KSE-100 Index recovered the losses suffered earlier in the session on Monday after the market witnessed buying interest during the last hour of trading, closing at 38,443.59 with a 35.61-point, or 0.09 percent, gain.

The expected interest rate hike kept the Pakistan Stock Exchange under pressure most of the time while the futures rollover week has also started, meaning investors were no much interested in buying, says Ali Nadeem – Head of Sales at the First National Equities Limited (FNEL).

However, there was some buying interest late during the session which propelled the benchmark index back into the green zone.

About the effects of the latest interest rate hike, he said there won’t be any negativity in the market which had already absorbed the losses as the 1 percent increase was expected. Things would have been different if there increase was 1.5 or 2 percent as feared by some circles.     

Moreover, buying interest was again witnessed in the state-owned entities like Oil & Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) as Finance Minister Ishaq Dar has reached Doha, he said.

The expectation is, according to Ali, that the finance minister will offer the Qatari investors to buy shares in the state-owned enterprises in the energy sector to a hope to generate higher dividends to deal with the circular debt.

On Monday, the overall market volume stood at 81.26 million shares against the 92.43 million shares traded during the previous session, which represented an around 13 percent decline.

As far as the KSE-100 Index is concerned, its volume was recorded at 38.41 million shares which a significant dip when compared with 51.40 million shares traded on Friday.

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