Investors wonder if PSX moving for a kill, given no weekly close above 50,000 points

KARACHI: Having risen significantly after the Supreme Court's ruling on the Panama Leaks case, Pakistan’s stock market was once again in greener pastures on Thursday. The KSE-100 Index closed up 1.40 percent (or 678 points) at 49,283 points today.

More than 116 million shares exchanging hands in transactions worth almost Rs. 11.22 billion, with chemical and banking sectors leading today's rally.

Shajar Capital CEO Rehan Atiq explained that the investors have some concern regarding the high current account and exchange rates. "Going forward, the investors may be choosy and may buy the script that offers valuation," he said.

Atiq thinks that the banking sector has a valuation, since, for him, the interest rate has bottomed out, and with the rising interest rate, profitability in this space would improve.

'Emerging Market' status boosts market again

Pakistan is all set to regain the MSCI’s Emerging Markets status as the market indexes and services provider will be reviewing the country’s position on May 15, 2017.

In this regard, Invest and finance securities CEO Muzammil Aslam commented on how the upcoming development is fueling the investors’ positive sentiment. “Once approved, it will work from June 1, subsequently opening up new investment opportunities for foreigners in the Pakistani market,” he stated.

Aslam added that this is the main factor behind the robust trading today.

More buying ahead?

Despite the benchmark index moving closer to 50,000-point mark with today’s run and the fact that the market has closed above that level twice in the prior weeks, all of these instances were on a daily basis.

A weekly close above 50,000 points, therefore, is yet to be seen, and if PSX manages to overcome the barrier tomorrow, more buying may be observed ahead of the Budget 2017-18 announcement and Pakistan officially regaining its MSCI Emerging Markets status.