The panic created by the National Savings to increase the return rate pulled the market down as the Pakistan Stock Exchange (PSX) nearly lost the gains made in earlier in the day after going up by around 450 points.
Around 2:15 pm, the benchmark KSE-100 Index was recorded at 41,219. 67 but the news about National Savings reinforced the fears that the State Bank of Pakistan (SBP) might go for an increase in the current key policy rate of 16 percent by 1.5 to 2 percent.
The next of the SBP Monetary Policy Committee is scheduled for Jan 23 about which Ali Nadeem – Head of Sales at National First Equity Limited (NFEL) – says the market considers the National Savings’ decision as a considered a sign that another interest rate hike is coming.
Before the slump, investors showed a keen interest in cement as well as energy – especially oil and gas –sectors which boosted the KSE-100 Index from the previous day’s value of 40,758.20 to 41,219. 67. However, the selling pressure pushed the index down to 40,668.95 in the afternoon.
However, the news coming out of the UAE about rolling over the existing loan of $2 billion and provision of another $1 billion helped a recovery that ended with the KSE-100 Index closing in the green zone at 40,803.89 – an increase of 45.69 points or by 0.11 percent.
There are also reports about a suggestion to give to the Emirati investors over 10 percent stakes in the state-run companies listed at the Pakistan Stock Exchange and involved in the oil and gas sector. It is this speculation that has helped in increasing the share prices of these entities in recent days with investors opting to buy their shares with a hope of good returns.
As far as the market capitalisation is concerned, the value stood at Rs6.51 trillion (Rs6,506,008,334,154) when compared with the previous day’s level of Rs6.49 trillion (Rs6,491,446,491,052) with the shares worth Rs5.89 billion traded on Thursday.
During the session, the total volume of the benchmark KSE-100 Index stood at 83.92 million shares – over 20 percent decrease from 109.80 million shares traded Wednesday.
Shares of 92 companies included in the benchmark index were traded Wednesday out of which 44 recorded an increase, 44 registered a fall and four remained unchanged.
As far the volume leaders are concerned, Pakistan Petroleum topped the list with 8.13 million shares followed by Maple Leaf Cement 8.05 million, Oil and Gas Development Company 5.5 million, CNERGY 4.42 million, and Lotte Chemical 4.31 million.
The shares of five best performing companies during the day were: Lotte Chemical 7.49 percent, Pakistan Services Limited 7.35 percent, Nestle 4.46 percent, Maple Leaf Cement 4.23 percent, and Pioneer Cement 3.44 percent.
On the other hand, the share price of Services Fabric was down 4.03 percent. The other top losers were Abbott Laboratories 2.84 percent, Kohinoor Textile Mills 2.06 percent, Bannu Woolen Mills 2.05 percent, and Highnoon Laboratories 2.05 percent.