KARACHI: The long-awaited moment for the stock market arrived on Thursday when the KSE-100 index performed the incredible feat of crossing comfortably over the 30,000 points level.
The ravaging bulls tossed the index up by 400.94 points or 1.35 per cent to 30,177.11. The volume also jumped 83pc over the previous day to 206 million shares.
The immediate trigger for the bulls was provided by the global rating agency Moody’s upgrade of outlook for Pakistan’s economy to ‘stable’ from ‘negative’. It was sweetened further by the rating agency’s outlook on five Pakistan banks to ‘stable’ from ‘negative’.
All five banks were major gainers on Thursday with ABL up by Rs5.87; HBL by Rs3.66; MCB by Rs5.41; NBP by Re0.69 and UBL by Rs8.35. Elsewhere, PSO rallied by Rs7.67 and Lucky Cement advanced by Rs15.93. Brokers said that cement shares were powered by expectations of healthy June results.
Most market gurus admit that foreign investors have been the engine that drove the market to its all-time high. On Thursday, foreign funds bought equity worth $6.44m, which raises the total inflow to $33.7m only during the first three weeks of July.
KSE MD Nadeem Naqvi, when asked to comment on the memorable moment, told Dawn: “This is a positive upside move, which indicates that the market still has momentum to move forward.”
He asserted that the Moody’s rating upgrade changed local sentiments for the positive, while foreigners had continued to accumulate Pakistan equity.
Mohammad Sohail, CEO at Topline Securities, observes: “After increasing by 49pc in 2012 and again 49pc in 2013, local market index is up 19pc in this calendar year to date.”
He pointed out that in the last two and a half years, the index had shot up from 11,000 points to reach 30,000 led by “foreign flows, smooth political change and recent signs of economic recovery.”
Khurram Schehzad, chief investment officer, Lakson Investments, pointed out that the Pakistan bourse had benefitted from increase in weight in the MSCI Frontier Market index which elated Pakistan to third place, after Kuwait and Nigeria.
He observed that since January 2012 when the market first picked up momentum, foreign inflows into the Pakistan market amounted to the tall order of $826m.
Published in Dawn, July 18th, 2014