KARACHI: The stock market during the outgoing week recorded appreciable gains dictated by the Moody’s rating which not only upgraded the country’s outlook but also showed confidence in the banking sector regime, helping the index to gain by almost four percent.
Index closed on a positive note for the sixth consecutive week as the benchmark KSE 100-share Index gained massive 1,445 points on weekly basis before closing at 40,732.25 on Friday.
Upward momentum continued from the preceding week which strengthened when Moody’s Investors Services upgraded Pakistan’s outlook from negative to stable along with improvement in the rating of five key banks.
The market participation, resultantly, shored up during the week as evident by 34 per cent and 31 per cent on weekly basis. The average daily volume rose to 465 million shares valued at $104 million.
Foreign investors were net buyers during the outgoing week, accumulating positions worth $1.4 million. Most of this was concentrated in fertilisers ($6.9 million) and OMCs ($2.2 million).
Amongst domestic investors, individuals ($18.5 million) and mutual funds ($2.6 million) remained the most active buyers on net basis, whereas banks took benefit of reviving sentiments and net sold equities worth $19.4 million.
One remarkable feature of the outgoing week was that on Thursday the KSE100 index witnessed year’s highest value traded during 2019, clocking in at Rs20.1 billion or $129.6 million.
Previous high was witnessed on Nov. 26 when trade value settled at Rs18.4 billion or $118.5 million. Volume traded settled at 507 million.
The value traded is also a 370 day/251 session high as the last high was seen on Nov. 30, 2018 which was Rs24 billion or $172 million.
“As macro indicators churn up favorable outlook, we expect the euphoria to continue with increasing focus towards value picks”, said an analyst from the BMA Capital Management.
Further, absence of noise on the political front and muted developments on the international front are expected to keep investor’s interest alive, he said.
After Chinese investors expressed keen interest in pouring at least $2 billion into Pakistan’s stock market, PSX Chairman Sulaiman S Mehdi at a press briefing on last Friday stated: “Small Chinese stockbrokers having $52 billion in assets under management have shown interest in investing at least $2 billion in shares at the Pakistan Stock Exchange (PSX).”
Later, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh said the recent strong performance of Pakistan’s stock market was proof of “increasing investor confidence on stabilisation measures” employed by the Pakistan Tehreek-e-Insaf (PTI)-led government.
In a tweet, the premier’s aide stated that the 14.9 per cent gain of the KSE-100 Index in November was the highest one-month return over the past six years.
“The KSE-100 index is up by 14.9% in November 2019, highest one month return after May 2013. Since 16 August 2019, the index increased by 36.6% (10,500 points),” said Mr Shaikh.
His comments came after the Pakistan Stock Exchange had a phenomenal rally in the outgoing week despite political uncertainty that jolted investors briefly.
According to updates till Friday, the benchmark KSE-100 index managed to sustain its winning streak for the fifth successive week as it advanced 1,362 points or 3.59 per cent and crossed the 39,000 mark after eight months. It closed the week at 39,288 points.
“In November 2019, the KSE-100 index increased 5,084 points or 14.9pc month-on-month – this is the highest monthly return after May 2013,” said AHL Research in its report.
