Stocks fall ahead of monetary policy


Bears held control of the Pakistan Stock Exchange on Monday as sceptical investors took a cautious stance ahead of the State Bank of Pakistan’s (SBP) monetary policy announcement later in the day.

Resultantly, the benchmark KSE-100 index shed 108 points, beginning the week on a negative note.

Mixed expectations about the central bank’s policy rate announcement, which was made after the close of stock market, sparked volatility with low investor participation resulting in thin volumes.

Index heavyweights including automobile, cement and oil sectors closed mostly in the red. The refinery sector continued to take a hammering in the wake of a deadlock over approval of the refinery policy.

After a brief open in the green, the KSE-100 index dived over 400 points as investors booked profit on expectation of a surprise change in the monetary policy. Cherry-picking of stocks was witnessed in the final hour with market participants buying shares at attractive valuations. The buying spree erased most of the losses.

At close, the benchmark KSE-100 index recorded a decrease of 107.87 points, or 0.23%, to settle at 46,528.21.

In its report, Arif Habib Limited stated that the market took a battering on the first day of rollover week and lost a total of 421 points during the session. It closed down by 108 points.

Technology companies, oil and gas chain (exploration and production firms, oil marketing companies and refineries) tumbled whereas limited positive activity was noted in power and cement sectors.

The State Bank in the monetary policy, announced after the close of market, made a hike of 25 basis points against street consensus of no change, the report said.

JS Global analyst Maaz Mulla said that the market remained bearish for a better part of the day and traded between a high and low of +55 (46,691) and -421 (46,215) points respectively.

The cement sector recovered where Pioneer Cement (+1.7%), Cherat Cement (+0.5%), Maple Leaf Cement (+0.1%) and Lucky Cement (+0.7%) closed in the green zone.

Nishat Mills announced its financial result for FY21, reporting consolidated earnings of Rs28.15 per share along with a cash payout of Rs4 per share.

Agha Steel Industries in the steel sector also announced its FY21 result, posting earnings per share of Rs3.80 along with a bonus issue of 5%.

Moreover, Tariq Glass Industries announced its financial result where the company reported earnings per share of Rs15.31 for FY21 along with a dividend of Rs12 per share.

“Going forward, we recommend investors to remain cautious with announcement of 25bps increase in the policy rate after market hours,” the analyst said.

Overall trading volumes decreased to 194.7 million shares compared with Friday’s tally of 387.3 million. The value of shares traded during the day was Rs8.1 billion.

Shares of 512 companies were traded. At the end of the day, 135 stocks closed higher, 365 declined and 12 remained unchanged.

Telecard Limited was the volume leader with 19.9 million shares, losing Rs0.04 to close at Rs22.01. It was followed by WorldCall Telecom with 13.4 million shares, losing Rs0.06 to close at Rs3.19 and Byco Petroleum with 11.3 million shares, losing Rs0.13 to close at Rs8.80.

Foreign institutional investors were net buyers of Rs152.8 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan

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