The decision of upward revision in the policy rate by the central bank may hamper the recent positive trend in the local bourses, analysts said. The State Bank of Pakistan (SBP) has increased the policy rate by 50bps to 13 percent in the Monetary Policy Statement announced on Friday.
Muhammad Sohail, leading analyst and CEO of Topline Securities said the central bank realising the mounting risk due to rising fiscal deficit and likely increase in external account deficit decided to increase the policy rate. He said both bond and stock markets may fall next week due to rise in discount rate. T-bill and bond yields can go up by 25-40bps while stock market can trim by 2-3 percent, he added.
Abdul Shakur, an analyst at BMA Capital Management expects that the decision of upward revision in the policy rate would hamper the recent positive trend in the local bourses and can see a short-term pressure on stock prices for highly leveraged companies ie cement, select fertiliser and textile sectors.
Comments
Comments are closed.