KARACHI, June 13: Karachi Stock Exchange was the best performing market during December 31, 2001 to May 14, 2002 among the 14 leading markets in Asia, with rate of return of 41 per cent, says the Economic Survey FY2001-02.

The Survey points out that Pakistan’s stock market remained buoyant during the outgoing fiscal year. It said that the KSE- 100 index increased by almost 40 per cent during the ten months (July-April 20001-02).

Analysts comment that the Economic Survey has not incorporated the trend of the equity index for all of month of May and it has also to be seen how the market fares till the end of June. These have been the periods of extreme volatility with the index last noted to have jumped 100 points in one day early this week. As the investors’ perceptions change by the day on the possibilities about the Indo-Pak tensions, the 40 per cent gain may not sustain till the end of the year. In spite of it all, the stock market has certainly fared well during the year and the index is up 35 per cent since January.

The Survey does mention that the capital market had witnessed many ups and downs during the outgoing year. It mentions that the events of September 11 had ‘unleashed’ new and unpredictable forces that substantially raised the risk of global downturn and created tense business environment throughout the globe including Pakistan. “The KSE share index lost 116 points or over 9 per cent in just three trading days,” states the Economic survey, adding “This unexpected fallout also led to various settlement problems in the ‘Badla Market’”.

The survey points out that a number of positive developments “changed the environment altogether and led to the resurgence of the (capital) market.” These developments are listed as: decline in interest rates, removal of economic sanctions, trade concessions., economic assistance extended by a number of countries, successful completion of the Standby Arrangement, a new three-year Poverty Reduction Growth Facility (PRGF) with IMF, Paris Club debt rescheduling and Pakistan’s enhanced stature in the comity of nations after September 11.

Economic Survey states that the Pakistan’s stock market has been the “best performing market world-wide” in terms of profitability during January-March 2002. It says that with profitability rate of 43.3 per cent, KSE attracted considerable amount of foreign funds in the third quarter of the current fiscal year. KSE Index was 1366.4 on June 29, 2001, it stood at 1868.1 at the end of March 2002, showing an increase of 502 points or 36.7 per cent during the period.

To update, it may be mentioned that the index is now at 1785, which makes gain of 420 points or 31 per cent during the current financial year.