KSE-100 crosses 50,000 points, touches record high

Published: January 24, 2017
Email
Bullish run also made Pakistan the top-performing market in Asia and the fifth overall in 2016. PHOTO COURTESY: PAKISTAN STOCK EXCHANGE

Bullish run also made Pakistan the top-performing market in Asia and the fifth overall in 2016. PHOTO COURTESY: PAKISTAN STOCK EXCHANGE

KARACHI: The KSE-100 Index – a benchmark for market performance – crossed the 50,000-point level for the first time, spurred by a bull run that has seen it advance over 32% since MSCI announced its decision to reclassify Pakistan as an emerging market in mid-June last year.

On Tuesday, the index increased 164 points during intra-day trading to surpass the elusive 50,000 barrier.

The index has been on a growth trajectory ever since reports of MSCI’s decision started making the rounds.

KSE-100 finishes at record high, closes in on 50,000

The bullish run also made Pakistan the top-performing market in Asia and the fifth overall in 2016 after the benchmark-100 share index registered an increase of over 45% during the calendar year.

In less than a month during 2017, the index has gone up 4.4% as relentless net selling by foreigners is more than offset by domestic buying on the back of increased liquidity.

Recently, a 40% stake in the PSX was acquired by a Chinese consortium, a development stakeholders believe will bring more investment and technology upgrade to Pakistan’s stock market.

The rise

Analysts and stakeholders credit increased economic activity under CPEC, a more stable security situation, low inflation and MSCI’s reclassification as the main positive triggers for the stock market’s strong returns.

Index continues its rising momentum

Pakistan was part of the MSCI EM Index between 1994 and 2008. However, the temporary closure of the stock exchange in 2008 led MSCI to remove it from the index and classify it as a “standalone country index”. MSCI made Pakistan a part of the Frontier Markets Index in May 2009 and it has remained as such since then.

Although the actual reclassification of the index will follow later this year, global investors tend to start factoring in the reclassification ahead of the actual change, which prompts massive inflows of global funds in the case of a favourable decision.

Facebook Conversations

Reader Comments (3)

  • BrainBro
    Jan 24, 2017 - 11:44AM

    Congrats. It is a positive leap forward for Pakistan. However, one must know that all this capitalization comes off of 558 listed companies (majority of the money going into blue chips), and that despite being a large country, the total market cap still stands at a meager $100 Billion. A country like Bangladesh has a market cap of $320 Billion, and this is 2 times the size of PSX.
    Pakistan has the capacity to become a trillion dollar market, but it would require “rigid regional integration with India,” along with the inflow global corporate liquidity based out of Europe and North America. China cannot keep pumping the money into PSX forever.Recommend

  • Lumdheeng
    Jan 24, 2017 - 2:45PM

    Didn’t China bought 60% of KSE? Hope China is not manipulating Pakistan stocks.Recommend

  • XY
    Jan 24, 2017 - 7:48PM

    @BrainBro

    I would very much like to know where is it that you have obtained the market capitalization value for Bangladesh stock market?

    For a country with less than $200 billion GDP, the total market cap cannot be $320 billion. Recommend

More in Business