KARACHI, Nov 18: Stocks on Monday rose across the board on strong selective aided by the perception that bank credits may be cheaper after the central bank cut discount rate by 1.5 per cent to 7.5 per cent. The KSE 100-share index rose by 28.36 points at 2,299.96 after touching the highest at 2,305.

Whether or not commercial banks oblige investors by an identical positive gesture may not be around as banks managements may have their own limitations and problems to follow the precedent set by the central bank.

There could be a similar response by the banks over a period of time but the cut of 1.5 per cent may be a big figure for them to digest, notably the private sector banking system.

The central bank move will, however, certainly generate a health competition among the leading banks to oblige their second line clientele along with the elite ones after offering fresh credit lines at much lower rates, one broker speculates.

The KSE 100-share index finished with an extended gain of 28.39 points at 2,299.96, after having breached through the barrier of 2,300 points at one stage. Traded volume rose to 228m shares from the weekend’s 115m shares, reflecting the building up of long positions on selected counters.

“It is a big cut, second in a row during the current fiscal and could go a long way in boosting investment if the commercial banks follow suit,” analysts said commenting on the last Friday’s cut in discount rate to 7.5 per cent from 9 per cent by the State Bank.

The stock market as well as the industrial sector could witness a steady inflow of fresh commercial bank credit lines if tailored to suit the State Bank overture to boost the economy.

Some analysts were, however, unsure whether or not bankers will oblige the starving sectors of economy by offering long-term credits at the lower rates, although the early reaction of most of the investors was positive and spontaneous.

Floor brokers said news from the political front are still unclear in regard to formation of the government at the centre. However, as the national assembly is in session most of the fears allied to it have been removed and Tuesday’s election of the speaker and the deputy speaker will signal who will be the prime minister possibly on Thursday.

Meanwhile, the MPs sitting close to the parliament are said to be making last minute efforts to win over as many members as they could to make the split mandate viable.

“The political divide between the contenders is now almost clear and they are being dubbed as anti and pro-government, brokers said, adding “but who will be the winner is pretty difficult to predict as number game as claimed by the contenders may still be elusive.”

Plus signs, therefore, dominated the list under the lead of Siemens Pakistan and Unilever Pakistan, which rose by Rs7.50 to 22.05 followed by Artistic Denim, Fauji Fertiliser, Packages, General Tyre, Tri-Pack films, and Nestle MilkPak, which posted gains ranging from Rs2 to Rs6.

Losers were led by Shell Pakistan, Pak Reinsurance Co, Colgate Pakistan, BOC Pakistan, PSO, 5th ICP and Kohinoor Weaving, which fell by Rs1.50 to Rs6.50, largest decline being in Shell Pakistan at Rs301 on 0.249m shares.

Trading volume rose to 228m shares from the previous 115m shares thanks to massive buying in Hub-Power, which rose by 75 paisa at Rs27.65 on 77m shares, reflecting the advent of foreign buying in it and for good reasons too.

Other actives were led by PTCL, higher by 40 paisa at Rs22.30 on 40m shares, Sui Northern, up 70 paisa at Rs18.05 on 20m shares, PSO, off Rs1.65 at Rs191.05 on 13m shares, National Bank, lower 25 paisa at Rs26.25 on 11m shares, MCB, higher by 45 paisa at Rs34.80 on 9m shares and ICI Pakistan, up one rupee at Rs47.30 on 9m shares.

Other actives were led by Fauji Fertiliser, higher by Rs1.20 at Rs59.40 on 6m shares, FFC-Jordan Fertiliser, unchanged on 5m shares and Dewan Salman, steady 10 paisa also on 5m shares.

FORWARD COUNTER: Hub-Power also came in for strong support on the forward counter and ended higher by 75 paisa at Rs27.80 on 19m shares followed by PSO, off Rs1.90 at Rs192.10 on 11m shares.