LAHORE: Pakistan Stock Exchange (PSX) is again beginning to look as an attractive and cheap destination for foreign funds, as $54m Pakistani stocks have been purchased since the beginning of September.
$402m of net outflows have been reported in the first nine months of 2017 by foreign investors which was reversed into $54m of inflows from purchase of Pakistani stocks since start of September, reported Bloomberg.
From being the best performing stock market of Asia in 2016 to being the worst in 2017, Pakistan Stock Exchange has endured contrasting fortunes as it tries to continue its recovery drive after months of political uncertainty.
KSE-100 benchmark index has fallen by 25pc since reaching a high in May and the continuing political crisis, rising civil-military tensions aren’t helping the market.
In June, Pakistan had been reinstated to an emerging market status by index provider MSCI and re-entered S&P’s Emerging Broad Market Index from S&P Frontier BMI in mid-September.
Topline Security’s Chief Executive Officer, Mohammad Sohail said “Foreigners are not as bearish anymore. “The majority of foreigners think the market has fallen too much and are either finding value right now or are waiting for a rupee devaluation”, said in a comment to Bloomberg.
Last week, in a meeting with Prime Minister Shahid Khaqan Abbasi at Governors House, Karachi stock brokers had been provided assurances for the revival of stock markets by bringing Capital Value Tax (CVT) and other taxes to their previous level.
The delegation had sought PM Abbasi’s help to revive the ailing stock-market by announcing a bailout package for it.
The news of an imminent bailout package helped prop up the KSE-100 index last week which gained 5.62pc (2,242 points) to settle at 42,087.89 points on Friday.
In a note to investors last week, Exotix said there were expectations for a devaluation of the PKR considering the current stock valuations at the PSX, said Bloomberg.
Also, Tundra Fonder AB Vice Chief Investment Officer Shamoon Tariq felt the KSE-100 index had the potential to touch 80,000 points by 2019.