PSX observes bearish trend
The benchmark KSE-100 index dropped to 37,688 points.
KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) on Thursday lost 349 points after yesterday’s reports that it has outperformed the world’s leading stock markets during the last three months due to the government’s steps to stabilise economy. The benchmark KSE-100 index dropped to 37,688 points.
However, today, it has lost momentum slightly in the early trade hours as investor participation has been comparatively low amid absence of market moving triggers.
According to a report published in the Bloomberg, during the last three months, Pakistan’s stock market surged by 30 percent while Ireland’s stock market increased by 20 percent followed by Russia’s RTS index with a positive change of 15 percent.
The rally that has helped Pakistan stocks trounce the rest of the world in the past three months is not done yet, according to one brokerage.
Large investors, including mutual funds and insurers, are expected to jump in as double-digit returns from fixed income have begun to ebb away, A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities Pvt, said in an interview with the Bloomberg.
“Banks are rethinking their strategy. They have to look at riskier assets now,” said Soomro, who spent about a decade as a fund manager at companies including Tundra Fonder AB. “So, the stock market is a tempting bet.”
With stocks trading at overbought levels, it’s probably inevitable there’s a pause for breath, the report said. The rally will resume as more investors come in. The KSE-100 fell on Wednesday after five straight days of gains.
Foreign investors have bought $64 million of the nation’s stocks this year, set for the first annual inflow since 2014. Their purchases will gather pace February after the nation’s next review by the Financial Action Task Force, the report added.
Traders, at the start of the month, were in a state of uncertainty and a bit of nervousness as the JUI-F-led anti-government protest march moved towards Islamabad with politicians agitating the participating crowd.
But later, when the opposition party called off the sit-in, the market had managed to calm down and the index had bounced back as heavy buying erupted in the current favourites, cement, oil marketing companies and blue-chip stocks in selected sectors.
Pakistan’s KSE-100 Index has advanced to the highest level in seven months, after falling to the lowest in almost five years in August, amid attempts by the government to stabilize the economy with a $6 billion loan from the International Monetary Fund after a deficit blowout. At the same time, bond yields have begun to fall after peaking around 14% mid-year, making debt investments less attractive.
