KARACHI: After a mixed performance for the first three quarters of the year 2015-16, the stock market gathered momentum from the start of the last quarter (April-June) when the benchmark KSE-100 index galvanised to touch the all-time high (36,848 points on May 20), the Economic Survey 2015-16 mentioned under the head ‘Capital markets’.

Until end-March, the index touched its highest point at 36,228.88 on August 6, 2015 whereas, its lowest point was at 30,276.25 on February 23, 2016 which suggests that the index suffered decline during the nine months period ended March 31, 2016.

“The decline during the period could be attributed to a number of factors including recession in oil prices internationally, stringent enforcement policy by the regulators of capital markets and selling pressure by the foreign funds managers.”, explained the survey. It added: “It is believed that the recent bullish trend in stock prices is a result of Pakistan’s reclassification from a frontier market to an emerging market by MSCI and to some extent rebound in oil prices”.

The survey mentioned the major event during the year as the merger of KSE, LSE and ISE into Pakistan Stock Exchange (PSX) operational from Jan 11, 2016. It said the basic purpose (of integration) was to enhance operating efficiency of Pakistan’s Capital Market and to provide all players with a single, deep liquidity pool and fully integrated national trading platform.

On the cut-off date of end March, total listed companies at PSX stood at 560 with listed capital of Rs1.29 trillion and market capitalisation at Rs6.92tr.

“According to a rough estimate, among the 30-odd sectors listed on the PSX, only around eight accounted for 80 per cent of market activity. Those included banks, oil and gas exploration, fertilisers, cements, textiles, automobiles, food and pharmaceuticals. It meant that index could sink or swim based on the performance of those sectors which could be counted on the finger tips,” the Survey affirmed.

Foreign institutional portfolio investment (FIPI): The foreign investment in the stock market exhibited net outflow of $341.279 million from July 2015 to March 2016. IPOs: During the period July-March 2015-16, three companies entered the market: Hi-Tech Lubricants Amreli Steels and Awwal Modaraba.

Debt Capital Markets: During the period July-March 2015-16, two debt securities were issued: ‘Privately Placed TFCs of Rs10bn’ and ‘Privately Placed Commercial Paper’ of Rs0.8bn. Mutual Funds: The total size of the industry stood at Rs510.91bn as on March, 31, 2016 compared to Rs492.23bn on June 30, 2015, showing an increase of 3.8pc. The total numbers of funds at the closing date were 170. National Saving Schemes: As of March 31, 2016, the portfolio of NSS amounted to Rs3,197,463.25m which constituted around 24pc share of overall domestic debt of the government.

Published in Dawn, June 3rd, 2016