Market highs and lows

After closing on a high on October 20, the Pakistan Stock Exchange again plunged to lower levels before the start of the weekend. Based on the positive news coming out of various sectors of the economy such as the Sindh Pension Fund’s allocation of Rs75 billion for equity investment and the government’s proposed bailout of the textile industry, prompted across-the-board buying recently. Similarly an increase in global crude oil prices to a 15-month high and Habib Bank’s greater than expected earnings led to both the oil and financial sector also performing well. Trading volumes rose more than 50 million as the market closed at 562 million share volume as compared to 506 million on the previous day. The bench mark 100 index closed at a record high above the 41,500 level thanks to institutional buying and impressive earning figures which kept investors interested despite political uncertainties.

However, the trend did not last and the index fell by 250 points before the start of the weekend in part due to falling oil prices and also because of the political climate within the country. Investors treaded cautiously at the close of the week and big names in the index did not fare well. Analysts expect investors to remain interested due to quarterly earnings figures shall start coming out next week, however the ongoing political issues are keeping them in a careful mood. Despite these wobbles, the PSE is still outperforming other emerging markets. According to Bloomberg, the PSE has become the best performing stock market in Asia this year. It is expected that after the recent completion of the IMF’s programme for Pakistan, the government will make further efforts to boost various sectors of the economy. Infrastructural development and an overall increase in oil prices are expected to pull up the energy sector and banking, too, is likely to rally. Despite the pre-weekend losses, the news continues to be good for the PSE.

Published in The Express Tribune, October 24^th, 2016.

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