LAHORE: The KSE 100 index has gained 1,055.41 points in the very first hour of the trading session here on Wednesday, currently trading at 34,497.51 points, up 3.16 per cent from its close on Tuesday.
Investor sentiments seem to be running high at the Pakistan Stock Exchange (PSX) in the anticipation of the equity bailout fund.
Capital Stake Director of Research Maha Jafer Butt told Profit, “After a long selling spree the market is seeing some recovery. On the economic front, a lot of things have cleared up in the past few days including the International Monetary Fund (IMF) programme, monetary policy and now media reporting positive response expected of the FATF meeting. Also, blue chips are trading at attractive valuations for investors to grab. Both of which have contributed towards the positive movement of the KSE 100 index.”
Market analysts believe that this rally will be shortlived and the budget measures will soon dampen the economy as a whole. Pak Kuwait Investment Adnan Sheikh AVP Research said, “The index jumped in anticipation of a bailout fund, along with chances of Pakistan being removed from the FATF greylist in June.”
He added, “High net worth individuals have been buying ahead of institutions. Over the last two days alone individual buying stood at $6.5 million while insurance companies bought $2.4 million worth.”
“Interestingly funds have remained net sellers during this period.” He added further, there are a lot of short sellers in the market trying to recover their positions as well in the anticipation of a short term rally.”
Furthermore, the market participants gained some respite from Forex position, as PKR appreciated in early trade and was being quoted at 151.60/90, compared to the previous day’s close of 151.92. However, it is still too soon to speculate if the Dollar-Rupee parity will settle at this rate.
Meanwhile, the fertilizer sector, E&P companies and Commercial Banks seem to be the major driving forces behind this development, as they have collectively contributed around 402 points to the index.
It is pertinent to mention that the KSE 100 index reached its all-time high of 52,636.87 points on May 26, 2017, and currently, the 52-week range for KSE 100 index is between 32,352.40 – 44,332.86 points.
