PSX recovers after last week's hiccup
The optimism driven by political clarity was witnessed in participation as well
KARACHI (Dunya News) – The market staged a handsome rally during the week, gaining 1,565 points or up 3.8 percent to close at 42,786 points, as investors’ cheered the smooth conclusion of general elections 2018 and hoped that the new government would help restore confidence of the investors and foreign investors will pump some fresh liquidity in the stock market.
Contrary to street expectations of a weak, coalition government in Islamabad, Pakistan Tehreek-e-Insaf (PTI) emerged as the leading party capable of comfortably forming a relatively stable coalition govt. Furthermore, the market breached an important psychological resistance placed at 42,000 points.
The optimism driven by political clarity was witnessed in participation as well, where average daily turnover improved by 7.3 percent to 235 million shares while average daily value of shares was simultaneously up by 4.3 percent to 70 million dollars.
During the week, Asad Umar (widely expected to be the next Finance Minister) while speaking to media mentioned exercising all options (including IMF) to pull the country out of twin deficits and economic crisis. The statements pointed towards the wide economic challenges the upcoming government has to face while they also reiterated a high possibility of entering into another IMF Program.
Pakistan equity markets rejoiced as political uncertainty subsided post 2018 elections with no chance of a ‘hung parliament’, leading to improved market sentiment, said an analyst from Topline Securities.
Banks remained the top performing sector for the second consecutive week, contributing 368 points to the index gain, as market continues to anticipate earning accretion from further monetary tightening. Simultaneously, better industry outlook and cheap valuations in fertilizer sector and cement sector respectively, kept market participants interested, with the two sectors contributing 506 points to the market.
During the week, Foreigners remained net sellers to the tune of 0.4 million as against net selling of 22.1 million dollars seen during same period last week. On the local front, Individuals were net buyers amounting to 19 million dollars while mutual funds were net sellers amounting to 18.4 million dollars.
Ismail Iqbal Securities analyst said that in the last two weeks run up of bourse helped gain to 2,515. The rally was across the board with all sectors benefiting.
Allegations of foul play by trailing parties and international election monitoring agencies could not have a lasting effect on the market. Oil and Gas was one of the top drivers of the Index this week because of a rise in international crude oil prices. He said that next week we expect development with regards to the formation of new government, and the results season to drive the market.
Details by Haris Zamir
