Bourse makes record surge as political dust settles

Benchmark KSE 100-share Index gains over 1,400 points

Our Correspondent November 01, 2016

KARACHI: Pakistan equities rebounded with a roar as the KSE 100-share Index recorded the highest single-day gain on Tuesday following a peaceful end to a highly charged political drama.

The Pakistan Stock Exchange’s benchmark KSE 100-share Index recorded a rise of 3.52% or 1,406.03 points to end the day at 41,299.87.

Stock prices leap as PTI chief beats a retreat

Commenting on the market performance, Elixir Securities, in its report, said stocks were higher at the outset on thin volumes as speculation was swirling that an end to the political crisis was likely, given court’s pending decision on the Panamagate scandal.

Investors were hopeful of a resolution to the dispute between the ruling and opposition parties despite ongoing crackdown and arrests of Pakistan Tehreek-e-Insaf (PTI) workers and leaders.

“The market saw a broad-based sharp upward swing as the Supreme Court assured petition filers of a swift investigation and decision on allegations related to the Panama Papers while Imran Khan-led PTI celebrated and called off the Islamabad lockdown plan,” said analyst Faisal Bilwani.

The PTI will now put a show of strength in Islamabad on Wednesday in a “Thanksgiving Rally”.

“Meanwhile, S&P rating upgrade and higher-than-estimated inflation were ignored as investors breathed a sigh of relief and struggled to grab any decent offers available on the screen that pushed the KSE-100 index to a level that is a stone’s throw away from an all-time high,” Bilwani added.

JS Global analyst Ahmed Saeed Khan was of the view that positivity stemmed from the settling of political noise as Imran Khan called off the sit-in in Islamabad after involvement of the Supreme Court.

Imran’s show yet to begin and $3.35b wiped off already

“Meanwhile, inflation for October stood at 4.21% year on year, which was higher than expected, resulting in a strong rally in the banking sector as speculation grew over interest rate hike in the upcoming monetary policy,” said Khan.

Top index movers of the sector were Habib Bank Limited (+3.50%) and United Bank Limited (+3.92%).

“Overall the market sentiment has turned positive after fresh political developments, where we expect positive momentum to continue from here onwards,” he added.

Trading volumes rose to 506 million shares compared with Monday’s tally of 237 million. Shares of 440 companies were traded. At the end of the day, 388 stocks closed higher, 39 declined while 13 remained unchanged. The value of shares traded during the day was Rs17.26 billion.

Pakistan-India tension takes toll on stock market

K-Electric was the volume leader with 41 million shares, gaining Rs0.27 to finish at Rs9.60. It was followed by The Bank of Punjab with 28.5 million shares, gaining Rs1 to close at Rs16.61 and Ist Dawood Bank with 22.5 million shares, gaining Rs0.97 to close at Rs3.51.

Foreign institutional investors were net buyers of Rs107 million during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 2nd, 2016.

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