Saturday Jan 13, 2018
KARACHI: The devaluation of rupee has turned out to be positive for Pakistan Stock Exchange, as it led to an increase of 2,500 points in the 100-index during the first two weeks of January.
The 100-index experienced a domino effect – market was active as a large number of shares were traded due to increase in foreign investment.
The past week saw 1.38 billion shares traded in the market. This happened as a lesser value of rupee attracted more foreign investment.
As per the market trend, investors putting in foreign currency found rupee at 2017’s lowest after its value went down by 5% on December 15, 2017. This is why a large number of shares were traded December 20 onwards.
After the value of rupee went down, a further drop was feared after two days. During those two days 100-index also went down. However, after the fear subsided, the journey of 100-index going up started.
In 25 days, the market value of shares i.e market capitalisation went up by Rs780 billion.
According to JS Global Capital Limited’s Khurram Shehzad, foreign investment has not stopped since the decline in value of rupee. He added profit on foreign investment was turning out to be good for the market.
The political situation was being monitored, he said, but it was not feared at the moment, which is why more foreign investment was expected.
Moody’s analysis suggest the shift in exchange rate has eased pressure and was proving to be good for the economy.