Pakistan Stock Exchange (PSX) witnessed a bullish trend during the outgoing week on the back of diffusion of the political turmoil and healthy foreign buying and the benchmark KSE-100 index surged by 1968.68 points or 4.97 percent to close at 41,841.56 points.
The foreign investors were net buyers of shares worth $21 million during the week.
Trading activities also improved significantly as the average daily volumes at ready counter increased by 41.9 percent on week-on-week basis to 484.14 million shares as compared to previous week''s average of 341.18 million shares. Average daily trading value improved by 40.8 percent to Rs 16.21 billion. Total market capitalisation increased by Rs 384 billion or 4.8 percent to Rs 8.469 trillion.
An analyst at Topline Securities said that easing political tensions played a vital role as the index made an all time high during the week. All of the major sectors remained in the gainer list when compared to last week. Top three gainers over the outgoing week were Refinery, Auto Assemblers and Oil & Gas Marketing Companies, up 10.5 percent, 10.5 percent and 7.7 percent, respectively.
An analyst at Arif Habib Limited said that trading at the local bourse started off with a dull mood amid rising political tension between the ruling party and a major opposition party. The expectation of lockdown in the capital territory kept local investors at sidelines. Albeit, a new wave of excitement filled the market on Tuesday given consensus was reached between the two parties on appointment of a judicial commission over the much-debated Panama leaks tagged with upgrade in the country''s credit rating by international credit rating agency, Standard and Poor''s from B- to ''B''. As investors cherished both the news, the KSE-100 Index made an intraday high of 42,108 points on Thursday, while ending the week at 41,842 points, generating a positive return of 4.9 percent.
The market gained 1,969 points during the week of which 65 percent contribution came from (i) Banks (649 points) majorly attributable to attractive valuations and expectation of interest rate hike post announcement of higher than expected CPI for October 2016, (ii) Cements (248 points) due to healthy cement dispatches and market grapevine of increase in cement prices, (iii) Autos (113 points) owed to foreign support brushing off the effects of yen strengthening against USD during the week, and (iv) Fertilisers contributing 120 points. "With a relatively stable political situation in the country, we expect the market to remain robust next week, however the "Panama Case" hearing in the Supreme Court next week may keep the market a little under pressure which may lead to some profit-taking," he said.
An analyst at KASB Securities said that the start of see-saw week for the market was clouded with political uncertainty dragging index down initially. However, a number of positives led the index to reach its all time high in mid-week. The S&P credit rating upgraded of Pakistan sovereign bond from B- to B and diffusion of the political turmoil helped index post a roaring recovery.
The AKD weekly research report said that in a spirited week for markets, investors relieved by the cloud of political noise abating due to the Supreme Court verdict over Panama leaks inquiry, the KSE-100 index jumped 4.9 percent on week-on- week basis. Apart from diffused tensions in the political space, positivity emanated from the announcement by KEL of planned shift in ownership to the Chinese power conglomerate Shanghai Electric Corp and the recent imposition of dumping duty on Chinese steel imports as a protectionist move benefiting local players.
An analyst at JS Global Capital said that an eventful week ended with KSE-100 index increasing by 4.9 percent. The market appreciated sharply with diffusing tensions on the political front with PTI calling off its protest in Islamabad after intervention of Supreme Court in the Panama Leaks probe. This dispelled fears of derailment of the political process as some quarters of the market and political analysts were raising warning signs.
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