KSE Index ends down ahead of monetary policy announcement

The benchmark Karachi Stock Exchange 100-share Index on Thursday continued to move downward as the likely interest rate cut induced sell-off of banking stocks; although investors bet on cement shares for the same motive.
Analyst Muhammad Mobeen at JS Research said investors were uncertain in view of Wednesday’s bloodbath, which mowed more than two percent of stocks’ value.
The banking sector faced selling pressure for fear of up to 50 basis points cut in the interest rate in the upcoming week’s monetary policy scheduled on March 21.
United Bank Limited lost 2.1 percent of its share value, while National Bank of Pakistan dipped 3.7 percent.
Adamjee Insurance dropped 4.6 percent as it announced earnings per share of Rs5.4 and dividend per share of Rs1.5 in its yearend results. It didn’t declare any bonus contrary to the market’s expectations.
However, cement scrip saw buying interest at the prospect of a possible rate cut.
Lucky Cement, Fauji Cement, Maple Leaf Cement Factory, Fecto Cement and Lafarge Pakistan Cement rose 1.8 percent, 1.2 percent, 2.4 percent, 1.2 percent and 2.7 percent, respectively.
“Going forward we recommend investors to remain cautious and stick to fundamentally high dividend yielding stocks,” Mobeen advised.
The KSE-100 Index closed lower by 73.36 points, or 0.23 percent, to 31,451.62 points as against 31,524.98 points recorded in the last session. The highest index of the day was recorded at 31,605.45 points, while the lowest level of the day was 31,395.00 points.
KSE-30 Index was also down 95.61 points, or 0.47 percent, to 20,043.77 points as against 20,139.38 points.
Turnover shrank by 101 million shares to 107.53 million shares against 208.09 million shares. Trading value fell to Rs6.18 billion as against Rs11.68 billion. Market capital dropped to Rs7.00 trillion from Rs7.02 trillion recorded in the last session.
Of a total of 348 companies active in the session, 154 closed positive, 167 ended down and 27 remained unchanged.
Analyst Faisal Bilwani at Elixir Securities said investors didn’t prefer buying, awaiting clarity on foreign portfolio investment.
“A likely rate cut and attractive valuations failed to stir excitement with shocked participants still recovering from the freefall,” said Bilwani.
He added that a less than $50 million worth of shares were traded on the KSE 100 Index.
Highest increase was recorded in shares of Murree Brewery by Rs31.11 to Rs989.95/share, followed by Pak Tobacco that rose by Rs15.52 to Rs775.00/share.
Major decrease was recorded in shares of Shezan Inter by Rs57.00 to Rs1,090.00/share, followed by Exide (Pak) that fell by Rs51.88 to Rs1,119.53/share.
Significant turnover was recorded in stocks of Pak Elektron, Jahangir Siddiqui Co, Maple Leaf Cement XD, Engro Corp, Bank of Punjab, Fauji Cement XD, NIB Bank Limited, TRG Pak Ltd, Pak Int Bulk and Adamjee Insurance.
Pak Elektron remained the volume leader with 15.29 million shares with a decline of Rs1.96 to Rs48.27/share. It was followed by Jahangir Siddiqui Co with 7.76 million shares, down 80 paisas to Rs15.02/share. Shares’ turnover in the futures market dipped to 21.46 million shares from 24.99 million shares traded in the previous session.