Political stability and robust economic initiatives jack up KSE Index at historic level of 33,400

ISLAMABAD: Country's stock markets have yielded unprecedented performance with 33,400 index at Karachi Stock Exchange on Friday in the wake of diverse positive developments on political horizons, accompanied by robust economic initiatives of present democratic dispensation. The historic performance of the KSE 100 Index is clear indication of investors' firm confidence in the promising stock market and overall stability of the country, economic experts, traders and businessmen said.

Reacting to the historic performance of the KSE, various business leaders said that the investor enthusiasm has been fuelled by many factors and recent developments including exhibition of unity by All Parties Conference, comprehensive mechanism to curb terrorism, investment friendly policies of the government and high level engagements with other countries to promote trade and investment.

"Approval of 21st amendment and setting up of military trial courts for elimination of terrorism; political stability; reduction in prices of petroleum products and electricity as well as Prime Minister's successful visit to Bahrain, are the major factors behind the marvelous entry of bulls into the Karachi stock market," said former Lahore Stock Exchange (LSE) Chairman Asim Zafar.

He was of the view that unity among all segments of society and political parties against terrorism was widely welcomed by the local and foreign investors.

Chief Executive Officer, Arif Habib Limited, Shahid Ali Habib said increased foreign inflows in the stock market and expected cut in the discount rate in the monetary policy to be announced later this month have boosted the positive trend.

Moreover, liquid foreign reserves have surpassed US$ 15 billion which also added to the favourable conditions.

Hailing the tremendous KSE performance, President Islamabad Chamber of Commerce and Industry (ICCI), Muzammil Hussain Sabri said that the latest development at political front including the All Parties Conference, retrieving on one page of all leadership and their firm support to security forces and Pak Army sent strong and positive signal to the outer world that Pakistan was determined to bring peace, overcome the menace of terrorism and put the economy on the path of fast development.

"This is what the investors need to invest in any country and by giving positive signals Pakistan has been able to rope in the confidence of the investors," the business leader said.

Former LSE Director and Senior Member Javed Iqbal, endorsing the point of Asim Zafar said that anti-terrorism steps taking by Prime Minister; approval of 21st amendment, cut in POL prices and subsequent political stability helped tremendous performance of KSE.

"For the first time in Pakistan's history, the KSE-100 Index crossed 33,400 points, and it is a clear manifestation of local and foreign investors' confidence in the policies of present government that introduce business-friendly initiatives," he added.

Federation of Pakistan Chamber of Commerce and Industry (FPCCI) President Mian Muhammad Idrees termed the new KSE-100 Index record, as historic success of the government.

He said that passage of 21st amendment and speedy military trial courts would eliminate terrorism from Pakistan that would improve overall law and order situation that was a prerequisite for investment and businesses.

"The stable and vibrant economic environment would help resolve social and economic problems as well as early completion of requirements for speedy dispensation of justice," he said.

The former Senior Vice President of Lahore Chamber of Commerce and Industry (LCCI), Abdul Basit said that at Pakistan was an ideal country for investment, since the stock markets here were providing maximum profits than any other country of the world.

He said, the Prime Minister Muhammad Nawaz Sharif's political sagacity and consensus of political parties on elimination of terrorism has sent positive signals, hence winning over the confidence of investors.

It is pertinent to mention here that during the year 2014 Pakistani capital market touched historically unprecedented levels in terms of value and volume.

On the other hand, almost every single economic indicator- from gross domestic product (GDP) to inflation, agriculture to industry, from imports to exports, from remittances to foreign inflows, from exchange rate stability to interest rate, fiscal deficit to revenues and from reserves to public debt- shows a new positive beginning for the country's economy.

Chairman of the Pakistan Vanaspati Manufacturers Association, Atif Ikram Shaikh told APP that political stability, government's initiatives against terrorism such have strengthened investors trust and spurring economy activities in the country.

According to independent analysts, macroeconomic stability, an improvement in investor perceptions about political stability and economic prospects, better liquidity conditions, changes to Pakistan's outlook by international credit rating agencies and in the weightage of the KSE in Frontier Market indices, have all contributed to powering the KSE-100 to historic highs.

They said that due to the corrective measures and policies of the government, economic indicators are showing positive signs and the confidence of both domestic and foreign investors to invest in Pakistan is also being restored.