Investors feel that a stable government will force economic leaders to take bold steps to put the economy back on track.
KARACHI: The Karachi bourse welcomed the news of a stable government and ploughed through the landmark 20,000-point barrier as investors seemed satisfied to see one political party reaching close to majority vote in the landmark May 11 general elections.
The election results defied analysts’ predictions of a weak parliament as the PML-N looked able to form a government without the help of its traditional rival the Pakistan Peoples Party and new challenger Imran Khan’s Pakistan Tehreek-e-Insaf, reported AFP.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index jumped 1.65% or 328.55 points to end at the 20,244.82 point level. Activity picked up as trade volumes improved to 280 million shares compared with Friday’s tally of 218 million shares.
“The bourse hit a record high on Monday as Nawaz Sharif looked set to form a government that would be less fragile than expected after the May 11 elections,” according to Samar Iqbal of Topline Securities.
Investors feel that a stable government will force economic leaders to take bold steps to put the economy back on track. “There is an expectation that the economy will be much better handled by one party, and a pro-business party, leading the government as opposed to an unstable coalition,” added Iqbal.
Pro-industry manifesto of the leading party generated interest in “Mansha stocks”, said Harris Batla, analyst at Elixir Securities. Resultantly, Nishat Mills and Muslim Commercial Bank also performed well due to buying by institutions.
Moreover, PML-N’s intention to reduce circular debt to tackle energy crisis went in favour of Pakistan State Oil and power producers, added Batla.
On the contrary, Engro remained under selling pressure as gas supply issues continue to plague its fertiliser division.
The value of shares traded during the day was Rs9.81 billion.
Fauji Cement was the volume leader with 31.81 million shares gaining Rs0.40 to finish at Rs10.58. It was followed by Bank of Punjab with 14.85 million shares gaining Re1 to close at Rs10.31 and Jahangir Siddiqui and Company with 13.76 million shares climbing Rs0.65 to close at Rs11.93.
Foreign institutional investors were net buyers of Rs590 million, according to data maintained by the National Clearing Company of Pakistan.
Published in The Express Tribune, May 14th, 2013.
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