Increased minimum deposit rate on savings holds back KSE performance

Increased minimum deposit rate on savings holds back KSE performance

Karachi: (Monday, April 16, 2012) After witnessing rising trends for over a fortnight, owing to the announcement on part of State Bank of Pakistan to increase the minimum deposit rate on savings accounts from 5 percent to 6 per
cent, the Karachi Stock Exchange observed a dipping day today.

The central bank of the country aired the decision while announcing its monetary policy for next two months. According to the news, the bank is to keep the rates flat at 12 percent for next 60 days.

Commenting on the decision to increase the minimum deposit rate on savings, Sayem Ali, an economist at Standard Chartered Bank said, “This move will have a significant impact on bank’s profitability, as savings deposits account
for nearly 38 percent of all bank deposits, and 52 percent of the total number of deposit accounts.”

Triggered by the State Bank’s decision on Friday, the Karachi Stock Exchange (KSE) benchmark 100 index fell for 0.2 percent or 28.72 points to end at 13,770.70.

The decline in the 100 index was also accompanied by a lower shares’ business which fell from 380 million on Friday to 260 million today.

Among the banking stocks, the NIB Bank closed at 4.5 percent lower at 2.55 rupees, the National Bank of Pakistan fell 3.5 percent to end the day at 46.30 rupees, while Bank Al Falah ended 2.1 per cent lower at 15.75 rupees.

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Posted by Fayyaz Yaseen on Apr 16 2012. Filed under Business, Latest News, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry