Monday, November 23, 2009

Market Close !

Pakistan equities traded another dull day with sluggish activity as investors anxiously await Central Bank's decision on key policy rate due tomorrow evening after market close with talk of rate cut as high as 75bps to 12.25%. Reportedly, absence of FII interest and cautious approach by locals led to stocks trading red across the board with PSO the only exception closing +1.3% on hopes of GoP's quick action to eliminate energy sector debt issue that bodes well for the largest OMC in the country. Bank Alfalah BAFL PA topped the volumes list with stock closing flat mainly on local institutional and individuals interest. Also in limelight was Nishat Chunian NCL PA as State Bank announced release of outstanding R&D payments to the textile exporters.

We expect activity to pick up tomorrow as rumors and hints of MPS keep interest alive. In our view, a rate cut of anything above 50bps will be cheered with market to test highs. FII interest in index heavy blue-chip, mainly oil stocks is also key to short-term market direction. With financials underperforming, any rate cut excitement is likely to give the greatest boost to lagging banks and holding stocks.

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