Karachi, September 7, 2023 – Pakistan equities faced a notable setback on Thursday as the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) witnessed a decline of 50 points.
This decline, closing at 45,757 points, has raised concerns among investors and analysts alike, primarily attributed to rising interest rate concerns.
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Analysts at Topline Securities noted that Pakistan equities had a relatively range-bound day, with the benchmark index moving within a narrow range of 332 points, fluctuating between +228 and -104 points. The market sentiment appeared directionless, influenced by recent developments in the Treasury bills (T-bills) auction.
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During the T-bills auction, significant increases in cutoff yields were observed, with a rise of 162 basis points in 3-month T-bills and 213 basis points in 1-year T-bills. These increases are seen as indicative of an anticipated 1-2% rise in interest rates in the upcoming Monetary Policy, scheduled for September 14.
The impact of rising interest rates was particularly evident in sectors such as banking, cement, and technology, which contributed negatively to the index. Companies like LUCK, UBL, BAFL, BAHL, and SYS collectively lost 134 points. However, some relief was seen in other sectors, as DAWH, PPL, and PSO gained 99 points due to increased buying interest.
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Trading activity at the PSX remained relatively active, with over 176 million shares changing hands and a total trade value of Rs 7.5 billion. Notably, Pakistan Petroleum Limited (PPL) led the volumes chart for the day, witnessing a significant turnover of over 13 million shares.
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As Pakistan’s equities market navigates these uncertainties, investors and market participants will be closely monitoring the upcoming Monetary Policy announcement and its potential impact on interest rates. The fluctuating market dynamics highlight the importance of staying informed and agile in response to changing economic conditions and policy decisions.
