Experts predict Pakistan’s stocks will rise 25 per cent this year - GulfToday

Experts predict Pakistan’s stocks will rise 25 per cent this year


Stockbrokers monitor share prices at the Pakistan stock Exchange in Karachi. File/ Agence France-Presse

The benchmark KSE-100 index has given a 50 per cent return since March’s crash and experts predict the rally will continue this year (2021).

However, the market has been range-bound for the past four years and has been trading between 38,000 and 43,000 points in 2020 year-end.

Range bound trading was witnessed at the Pakistan Stock Exchange in Friday’s session. The KSE100 index went down by 58 points to settle at 45,931.

The market closed slightly in the positive however after the Friday break it receded into the red. Volumes continued to show a decline hinting that the index might take a clear direction in the coming week.

The index continues to hover at these levels testing a technical barrier of 46,000 before receding. Investors are hopeful that the index will be able to cross that mark in the coming week and test new highs.

Positive news on the economic front and a further curtailment of Covid-19 cases could be just the trigger that the PSX requires to hit new highs.

President-elect Biden just announced a new $1.9 million stimulus to help boost the Coronavirus response. A new US economic stimulus also boosted sentiments on Wall Street. Oil remained mixed as a new Chinese lockdown raised question of an economic recovery from the Covid-19 impact.

At the closing bell 157 companies had advanced with 206 closing in the red. 17 scrips remained unchanged.

Market participation for the KSE100 Index decreased to 222M from 286M in the previous session (-23% on d/d basis). Major contribution to total market volume came from HUMNL, POWER and FFBL combined for 135M shares out of the total market volume of 531M shares.

Pakistan Stock Exchange crosses 46,000-mark after 33 months

Improving economic indicators are the reason, experts say

Pakistan Stock Exchange’s benchmark KSE-100 index crossed on Wednesday the 46000-mark after nearly three years. Experts say the reason for this increase is improving economic indicators.

“Remittances are above $2 billion for seven consecutive months and current account is in surplus for five consecutive months,” JS Global Research analyst Ahmed Lakhani noted. “The economic indicators have been improving and the rise in the index was already expected.”

Large-scale manufacturing increased 14.5% in November and expectations are that December and January numbers will be robust too, he explained.

“Market expectations are that the index will go up to something around 52,000 to 55,000 points by the end of the year,” Lakhani said.

There’s comparative political stability at the moment, which is strengthening the market sentiment, according to the analyst.

Pak-Kuwait Investment AVP Adnan Sami said that improving economic indicators have a key role to play in the rise of KSE-100.

People tend to make investments in the beginning of the year, according to Sami. After a turbulent last year, investors are now returning.

“The news to resolve circular debt issue of the energy sector, now resumption of the IMF programme and strengthening of rupee against dollar have also improved market sentiments,” he said.

Energy, banking, steel, cement and auto sectors were all performing well, Sami added.

A Gong Ceremony was held at Pakistan Stock Exchange (PSX) to mark the listing of preference shares of Engro Polymer and Chemicals Limited (EPCL).

According to PSX press statement received here, the listing, that had taken place on December 31st, would bring forth a new investment opportunity from EPCL.

To open the trading day, the gong was struck by CEO, Engro Polymer & Chemicals Limited, Jahangir Piracha, amidst presence of the COO, PSX, Nadir Rahman, board members of PSX, and senior management of both the organisations. The leadership and senior management of the Consultant to the Issue, Arif Habib Limited were also present at the occasion.

EPCL planned to raise Rs3 Billion by offering 300 million preference shares of face value of Rs 10/ per share, the statement said adding that the shares were offered through Fixed Price Method at an issue price of Rs10/-per share.

Out of the 300million preference shares, 262.5 million preference shares (87.5%) were offered to and subscribed by the Pre-IPO investors whereas 37.5 million preference shares (12.5%) were offered to the general public.

The IPO of EPCL preference shares was extremely successful with applications for subscription of more than 202.047 million shares being received against an allocated target of 37.5 million shares in the general public portion of the said IPO. The general public portion of the IPO was thus oversubscribed by 5.39 times or by more than 164.547 million shares/ Rs1.645 billion.


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