KSE-100 index ends first week of 2019 on a positive note
Selling from foreign fund houses for week was US$0.51m compared S$1.1m in previous week
KARACHI (Dunya News) – Hopes of financial assistance to arrive soon lifted the share values during the outgoing week where investors optimistic that soon the government would out from the economic mess and attractive levels would build new rally at the local bourses.
The KSE-100 index started the first week of the new year off on a positive note as it gained 481 points or +1.3 percent, snapping its two consecutive bearish spell, closing at 37,548 level.
An analyst from Topline Securities said that the positive sentiments were driven by reports that China has pledged to lend $2 billion to Pakistan to shore up its foreign exchange reserves. Furthermore, Finance Minister Asad Umar’s recent statements that the biggest investment in Pakistan’s history from Saudi Arabia will be announced soon, also uplifted investors’ sentiments.
Index was mainly driven by Commercial Banks where the sector gained almost 1.8 percent during the outgoing week, contributing 244 points or 66 percent in overall rally on renewed buying interest.
Selling from foreign fund houses for the week was US$0.51 million compared S$1.1 million in the previous week. This was their 35th week of consecutive selling. Among local investors’, Individuals and Insurance were also net sellers of $17.7 million, cumulatively, while Mutual Funds were net buyers of $13.4 million, cumulatively.
Encouragingly, political noise slowed down over the outgoing week with the ruling party clarifying its stance over rumors of imposition of Governor Rule in Sindh. Another positive was US President Trump’s statement emphasizing Pakistan’s role in the Afghan peace process. However, concerns over rising circular debts and falling foreign exchange reserves kept the momentum muted.
BMA Capital Management expected that next week market participants are likely to focus on presentation of a potential mini-budget in order to meet fiscal deficit target.
Pakistan’s performance review under Financial Action Task Force (FATF) is also due from 8-10th Jan’18 in Sydney, Australia. Progress on government and IMF negotiations over a bailout program, potential aid/loan from middle-eastern countries, and/ or announcement of a major investment in the country are also important areas that might see positive progress.
Details by Haris Zamir
