PML-N’s dominant victory sparks heavy activity at the bourse.
The market reacted positively to the news, with volumes shooting up and the benchmark KSE-100 index climbing 621 points (3.1%) for the week, closing at an all-time high of 20,537 points on Friday.
The PML-N, known for its pro-business policies, swept the general elections by dominating in Punjab, winning 124 seats out of the 261 for which results have been announced. A simple majority of 136 seats is required to form the government, from the 272 seats for which elections were held.
The PML-N will not require any alliance with a major political party, as it is likely that independent candidates (who won 28 seats) are going to flock to the PML-N, allowing it to form the government at the centre. Resultantly, the party can set its own agenda in government formation, even if it decides to form an alliance with another party.
The rise of cricketer-turned-politician Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) in the run-up to the elections had led to fears that a hung parliament would be a likely outcome as Pakistan went to the polls. However, the PTI only managed to win a majority in Khyber-Pakhtunkhwa, and a total of 28 seats in the National Assembly.
The results of the elections sparked jubilation at the bourse, as the KSE-100 index climbed 1.6% on Monday, comfortably shooting past the 20,000-point barrier. The index registered only one session in the red on Thursday in an otherwise solid week for the bourse.
The rally was across-the-board, with a majority of stocks notching up strong gains. The energy sector received a much-needed boost on the back of the incoming government’s manifesto, which promises an end to load-shedding and circular debt. Pakistan State Oil was a major beneficiary, as its share price climbed 15.6% during the week.
However, challenges for the new government remain, as the country is slowly headed towards a balance of payments crisis following a continuous fall in foreign exchange reserves. Forex reserves currently stand at $11.6 billion, according to latest figures released by the State Bank of Pakistan.
It is expected that the new government will engage the International Monetary Fund and enter a new assistance programme for the economy. The PML-N was also quick to announce that it will be presenting the budget for fiscal year 2013-14 soon.
Average trading volumes at the KSE jumped sharply by 67% to 339 million shares per day, while average daily value shot up 33% to Rs9.84 billion. At the same time, market capitalisation increased 2% to Rs4.99 trillion by the end of the week.
Winners
Bank of Punjab
The Bank of Punjab operates under the status of a scheduled bank in Pakistan. The bank provides commercial banking services.
Pakistan State Oil
Pakistan State Oil specialises in the marketing and storage of petroleum and related products. The company also blends and markets lubricating oils.
Allied Bank
Allied Bank is a full service bank with a focus on retail banking. The bank offers a wide range of financial products and services, including deposit accounts, foreign currency accounts, demand finance, and online banking services.
Losers
Shifa International Hospitals
Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The company’s clinical services include medicine, paediatrics, surgical, obstetrics and gynaecology, dentistry, rehabilitation services and ophthalmology.
Bata (Pakistan)
Bata Pakistan Limited manufactures and sells rubber, leather, and microlon sandals and shoes
Agriauto Industries
Agriauto Industries manufactures auto, tractor and motorcycle parts. The group’s products are sold to the OEM and replacement parts market and include gaskets, valves and sleeves, shock absorbers, camshafts, brake bands, hydraulic lift covers, steering boxes and transmission components.
Published in The Express Tribune, May 19th, 2013.
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I am just wondering why no one is reporting the Gold Price Crash in Comex
Pakistan is lucky to have a LEADER like Nawaz Sharif back on hot seat ... the guy with excellent team ... which can deliver ...