KSE 100 TIPS

23/12/2017

Most Actives

21/12/2017

Please study by play/pause tabbing Analysis and way forward. Courtesy Topline Securities

18/12/2017

Volume leaders

16/12/2017

16/12/2017

Impact of Fed Interest Rates:

*Interest rates* are one of the most important leading indicators to which most people (retail traders, governments and even federal banks) pay special attention.

If we look back in history we can see that the interest rates are historically low since the crash in 2008.

In theory an economy needs almost 10 years to recover from a crisis, and if we look closely, it is almost 10 years since the last crisis.

The mechanism by which the Fed manipulates the prevailing Fed funds rate is by the buying and selling bonds.

A country’s currency/exchange rate is affected by the central banks interest rates policy/Fed funds target.

In (low interest rate) environment, money is 'cheaper' and all things being equal: currency will lose its value.

In a (high interest rate) environment, money is more 'expensive' and all things being equal: a currency will increase its value.

So… what impact do interest rates have in an economy?

We can look at three points (triple T’s):

•The borrowing becomes more expensive (for consumers and companies)
•Troubles for stocks and bonds (as mentioned previously)
•Turns the dollar stronger (normally, the dollar become more appreciated)

The borrowing becomes more expensive

It happens in everywhere, when the federal banks increase the interest rates then the banks have to increase their interest rates as well. People or companies that need finance have to pay more because of interest rates.

Therefore, is not a benefit for consumers or companies.

Troubles for stocks and bonds

Bonds yields and interest rates are correlated.

Normally, when federal banks increase the interest rates, then the bonds yields move in the opposite direction.

Turns the dollar stronger

Higher rates make investing in treasuries and assets more attractive.

Therefore, the dollar appreciate face others currencies.

16/12/2017

Social media and rumours combine to send stock market participants in panic mode

15/12/2017

Mir MAK on

15/12/2017

, May Allah guide our country to the best of it's future

15/12/2017

mix, however markets closed negative

15/12/2017

+ for oil sector #

Oil prices up on lower U.S. crude stocks, but growing output caps gains

15/12/2017