Author Topic: Interest Rate Forecast  (Read 173248 times)

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Offline abcd

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Interest Rate Forecast
« Reply #-1 on: November 17, 2009, 06:18:26 PM »
Mates can endorse their views
« Last Edit: February 01, 2012, 09:58:33 PM by M&M »
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Interest Rate Forecast
« Reply #-1 on: November 17, 2009, 06:18:26 PM »

Offline ovais_suleman

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Re: Interest Rate Forecast
« on: November 17, 2009, 09:30:29 PM »
0 - 0.5% rate cut expected.
Higher chances of a 0.5% cut.

Offline abcd

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Re: Interest Rate Forecast
« Reply #1 on: November 17, 2009, 09:35:58 PM »
0 - 0.5% rate cut expected.
Higher chances of a 0.5% cut.
yeah,but lets see how mates feel
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Offline Farzooq

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Re: Interest Rate Forecast
« Reply #2 on: November 17, 2009, 09:40:11 PM »
50 to 100 bp
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Offline abcd

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Re: Interest Rate Forecast
« Reply #3 on: November 17, 2009, 09:43:15 PM »
50 to 100 bp
2marow markt behaviour will suggest wat is likely
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Toshi

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Re: Interest Rate Forecast
« Reply #4 on: November 17, 2009, 11:20:48 PM »
I'm expecting 50 Bp point.

Toshi

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Re: Interest Rate Forecast
« Reply #5 on: November 18, 2009, 01:34:13 AM »
Monetry Policy wil be announced on 24th November.

Offline 007

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Re: Interest Rate Forecast
« Reply #6 on: November 18, 2009, 04:13:51 AM »
No cut

Offline Learner7

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Re: Interest Rate Forecast
« Reply #7 on: November 18, 2009, 09:01:27 AM »

Offline Farzooq

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Re: Interest Rate Forecast
« Reply #8 on: November 18, 2009, 09:02:03 AM »
SBP may cut rate by 50-100 basis points: monetary policy on November 24
RIZWAN BHATTI
KARACHI (November 18 2009): The State Bank of Pakistan (SBP) is likely to cut policy rate by 50-100 basis points (bps) as the inflation has shrunk to single digit after a gap of 22 months, sources in the banking industry told Business Recorder on Tuesday. They said the declining trend in inflation and positive economic indicators have made room for the central bank to cut the policy rate and give a breathing space to the country's ailing economy.

The central bank is going to review the monetary policy for two months (November-December 2009) during next week. Although, the sources are not sure about the exact percentage of the reduction, however they are confident that the SBP will cut the interest rate in the upcoming monetary policy.

"The SBP would ease the monetary policy as the inflationary pressure has substantially reduced and the time has come to provide some relief to the depressed economy," they said. However, they said the central board of directors of the SBP would take a final decision on policy rate in its meeting schedule to be held at SBP head office on November 24, 2009.

The State Bank has constituted a nine-member Monetary Policy Committee (MPC), which will start deliberations this month, they said and added that upon its recommendations, the central bank board would take a decision on the policy rate. To harmonise the constitution of the MPC with the legal framework of the SBP and make it fully independent, amendments to the SBP Act have already been submitted for the legislative process. Until their enactment, the MPC will seek approval of its recommendations from the Board of Directors of the SBP.

The committee would review the impact of tight monetary policy, inflation statistics, monetary aggregates and other inflationary tools, besides overall economic situation to finalise the recommendations. In view of sharp decline in inflation and rising trend in the forex reserves, bankers and economists expect that the SBP will cut interest rate by some 50-100 bps in the next monetary policy.

Inflation has eased from record high of 25 percent in October 2008 to single digit 8.87 percent in October 2009 after a gap of 22 months. "We are hopeful there would be better option of some reduction in the interest rate after reviewing the last two months' inflation statistics and economic situation," analysts said.

They said the country's forex reserves have also mounted to a better position of some 14 billion dollars in November 2009 from 6.5 billion dollars in November 2008, besides some reduction in the government budgetary borrowing. The country's current account deficit has also posted a decline of 89 percent to 462 million dollars in the first quarter of current fiscal year, mainly due to rising remittances and sharp decline in the trade deficit, they added.
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Offline ihashishin

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Re: Interest Rate Forecast
« Reply #9 on: November 20, 2009, 12:42:20 PM »
 ???
DISCLAIMER: Caveat emptor.

Offline ihashishin

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Re: Interest Rate Forecast
« Reply #10 on: November 20, 2009, 12:44:19 PM »
Please cast your vote and lets see what the forum consensus comes to so maybe we can all profit from it...

i voted for unchanged
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Offline Learner7

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Re: Interest Rate Forecast
« Reply #11 on: November 20, 2009, 12:52:41 PM »

Toshi

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Offline ihashishin

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Re: Interest Rate Forecast
« Reply #13 on: November 20, 2009, 02:03:53 PM »
keeping in mind that rising inflation is a confirmed proposition considering rising electricity and gas costs going forward, coupled with the extremely short term hike in food prices like we always have near/at eid i initially expected no cut in the discount rate to curtail inflation

but now i am considering the fact that the country needs to start raising some serious money to pay back the first tranche of the loan in june 2010, which would demand a higher then nominal (0 to 50bps) cut to gear growth and revenue generation. we, in true pakistani style would probably delay the repayment by a little bit but still need to pay

therefore now i expect somewhere in the region of 0.75 to 1.25% rate cut
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Offline AAB SAIFY

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Re: Interest Rate Forecast
« Reply #14 on: November 20, 2009, 06:03:02 PM »
UNCHANGE
Note  (*¿*)
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Offline Admin

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Re: Interest Rate Forecast
« Reply #15 on: November 21, 2009, 03:05:12 PM »
 Interest rate likely go down in SBP new monetary policy

  Updated at: 1240 PST, Saturday, November 21, 2009   
   KARACHI: At least 15 Brokerage Houses have expected decline in interest rate in upcoming monetary policy to be announced from State Bank of Pakistan (SBP) on Tuesday, November 24, Geo news reported on Saturday morning.

The central bank, bringing down the interest rate, will likely waive a bit the forthcoming monetary policy, agreed upon by as many as 15 Brokerage Houses, which trade in Karachi Stoke Exchange (KSE).

Experts said the SBP reserves rights to take down interest rate due to stability in inflation rate or if inflation sustains at 10 percent pace. 

Toshi

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Re: Interest Rate Forecast
« Reply #16 on: November 21, 2009, 10:06:49 PM »
Monetary Policy: Last Call – 50bps (take it or leave it)

The SBP is due to announce its monetary stance for Nov09-Jan10 on 24th
November
 We maintain our call of a 50bps cut to 12.5% in the upcoming policy review
 The justification for a cut can be seen in the broad based macroeconomic
stabilization which has seen inflation decline to single digits, the current
account shrink by almost 90% and the dissipation of demand pressures
(evident in the decline in private sector credit)
 However single digit inflation is likely to be a temporary phenomenon and
given the uncertainty with regards to external inflows

Offline abcd

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Re: Interest Rate Forecast
« Reply #17 on: November 22, 2009, 06:00:28 PM »
Monetary Policy: Last Call – 50bps (take it or leave it)

The SBP is due to announce its monetary stance for Nov09-Jan10 on 24th
November
 We maintain our call of a 50bps cut to 12.5% in the upcoming policy review
 The justification for a cut can be seen in the broad based macroeconomic
stabilization which has seen inflation decline to single digits, the current
account shrink by almost 90% and the dissipation of demand pressures
(evident in the decline in private sector credit)
 However single digit inflation is likely to be a temporary phenomenon and
given the uncertainty with regards to external inflows
our poll ascertaind 50bps earlier
Stock trading is a science and art too

Toshi

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Re: Interest Rate Forecast
« Reply #18 on: November 23, 2009, 09:48:57 PM »
MPS: Domestic Fund Manager Survey

???? Our brief survey reveals equity market participants are converging to expectations
of a 50bp cut in discount rate (current level: 13%) in the upcoming monetary policy.
???? In addition to potential policy rate cut (KASB expectation: 50-100bp), between-thelines
takeaways and any quantitative easing measures will be equally important.
???? We believe MPS outcome rests on SBP’s 1) approach to balancing prudence vs
business community need for relief; 2) inflationary outlook & domestic capacity
constraints and 3) most importantly, outlook on fiscal outlay.
???? The cut could be eventful for investors in our view as expression of increased
confidence on foreign flows by SBP will be a positive omen for the equity market.
???? For money market, policy rate cut would confirm gradual monetary easing stance of
SBP. However, Eid related withdrawals might delay its effect on yields.
What will be the key read-through from the MPS?
State Bank of Pakistan (SBP) is set to unveil its monetary policy (MPS) on November 24th 2009.
While the potential policy rate cut (KASB: 50-100bp) or otherwise will make the headlines,
between-the-lines takeaways and any quantitative easing measures will be equally important. In
our view, the MPS outcome rests on 1) SBP’s approach to balancing prudence vs business
community need for relief; 2) inflationary outlook of SBP & domestic capacity constraints and 3)
most importantly, SBP outlook on fiscal outlay (external flows).
September policy was status quo; what has changed since?
Since the last MPS, not much has changed in terms of macro economic fundamentals. Yes
inflation has dipped to single digits for the first time in 22 months but inflation bottoming out in Oct-
09, before taking a gradual upward path has been the consensus opinion for quite a few months
now. Therefore a SBP move to cut policy rate could be construed as increased confidence on
external budgetary financing which should bode well for fiscal position and asset prices.
What is the KSE expecting?
The number of variables at play and their associated uncertainty has kept the money markets in
flux over the last few days (see chart 2 for rates volatility). For stock market expectations, our brief
survey reveals equity market participants are placing their expectations mid way and converging to
an expectation of 50bp cut in discount rate from current level of 13%. Split of responses is below:
???? 6% investors expect no-change
???? 11% investors expect 0-50bp cut
???? 50% investors expect 50bp cut
???? 22% investors expect 50-100bp cut
???? 11% investors expect 100bp cut.
Will 50bp cut be a non-event then?
Despite a sizeable chunk of investors expecting 50bp cut, we believe the cut could be eventful for
investors as expression of increased confidence on foreign flows by SBP will be a positive omen
for the market. From KSE’s vantage point, the MPS comes at a time when KSE is looking towards
improvement in macro visibility and FPI numbers for a direction. While between-the-lines
takeaways from MPS would lead investors’ expectations, significant near term FPI activity could
take attention away to some extent. Moreover, the MPS is immediately followed by a 4-day
weekend and that usually influences market behavior. From Money market perspective, a cut in
policy rate would confirm gradual monetary easing stance of SBP however it comes in midst of a
liquidity crunch period of Eid related withdrawals and hence reading near term market signals may
not be appropriate.