Bears dominate Pakistan equity market

• The IMF has set a goal for the interest rates to remain greater than the core inflation.
• The All-share volume decreased 20% to 126 million shares against 158 million shares traded.
• Analysts expect volatility to persist until the IMF’s ninth review is successfully concluded.

KARACHI: The Pakistan stocks witnessed selling pressure throughout the day and closed in the red zone with low volumes fuelled by the announcement that the Monetary Policy Committee (MPC) meeting has been preponed and will now take place on March 2, 2023, analysts said.

An analyst at Pearl Securities said the International Monetary Fund (IMF) has set a goal for the interest rates to at least remain greater than the core inflation, so it is expected that the State Bank of Pakistan (SBP) will raise the policy rate by 300 to 400bps to control inflation.

“Moreover, political uncertainty due to the non-bailable warrant against Imran Khan also fuelled bearish sentiment.”
Consequently, the benchmark KSE-100 Index reached an intraday high of 40,810 (+26 points) and an intraday low of 40,436 (-348 points) to close at 40,510, down 274 points, or 0.68 per cent.

The All-share volume decreased 20 per cent to 126 million shares against 158 million shares traded on the previous trading day.

An analyst at Arif Habib Limited said the index opened with the positive numbers but sentiments quickly shifted in support of bears, as the market proceeded to trade in the red zone during most of the trading session.

“An anticipated rate hike in the upcoming monetary policy and political instability drove the index down, as investors’ chose to remain cautious, while trading and kept on hunting for the value stocks with high dividend yield, whereas decent volumes were observed across-the-board.”

Going forward, the analysts expect volatility to persist in the benchmark KSE-100 Index until the IMF’s ninth review is successfully concluded.

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