Pakistan economic revival: Stock Exchange bounces back with millions of dollars pouring in

Pakistan economic revival: Stock Exchange bounces back with millions of dollars pouring in
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KARACHI - Pakistan Stock Exchange has started to bounce back on th news of economic revival.

The capital market during the outgoing week recorded appreciable improvement where sharp increase in crude oil price helped build handsome rally in local oil and exploration companies which accounted for 40 percent gained in the overall index.

The KSE-100 index gained 1,502 points or 4 percent closing at 39,049 level during the outgoing week. The improvement was also due to development that around $3 billion support package was agreed with the United Arab Emirates, as per official announcement, to help the country with its balance of payments crisis.

Furthermore, the Financial Action Task Force (FATF) expressed a degree of satisfaction over Pakistan’s efforts and action plan to combat money laundering and terror financing under international obligations and indicated certain areas to do more before May this year to get out of the grey list, as per Pakistani officials. This news further improved investor sentiments.

With WTI crude oil rising 10 percent in past week, E&Ps were the best performers during the week adding 606 points to the index. They were followed by Commercial Banks and Fertilizers, which added 600 points, cumulatively.

The average daily traded volumes for the week were 140 million shares, up 18 percent on weekly basis and average daily traded value for the week was $46 million, up 12 percent compared with preceding week.

Foreign investors accumulated stocks worth of $0.6 million in the past week compared to net selling of $0.5 million last week.

Buying was concentrated in Commercial Banks, and Cements. On the local front, Mutual Funds led the bullish sentiments, displaying major buying at the index worth $6.7mn followed by Broker Proprietary $6.4 million.

Other key news during the week were (1) remittances increased by 10 percent during first half of the fiscal year, while Dec-2018 remittances declined by 2% YoY, (2) State Bank of Pakistan’s (SBP) forex reserves fell to $7.05 billion in the last week, (3) the government appointed new managing directors for Sui Northern Gas Pipeline (SNGPL) and Sui Southern Gas (SSGC) and (4) World Bank released a report where it expects Pakistan’s FY19 GDP growth to decline to 3.7%.

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