Pakistan's 100 Index tops 48,000-point mark, headed for 49,000

Staying on its bullish trajectory, Pakistan’s KSE-100 Index on Monday opened this year with aggressive activity. It commenced trading at 47,806 points today at the opening bell, and peaked to reach 48,335 points at 11:31 AM, rising 529 points.

The benchmark index closed 2016 on a positive note, and registered an 1117-point gain on December 30 to reach 47,806 points – the highest-ever levels before markets opened today.

Pakistan Stock Exchange has observed a continuously-upward momentum over the past week and generally last month, as it recorded new record-highs every few days. Investors remained focused on cement and banking sectors.

As per a local business daily report, “Tobacco, Food & Personal Care, and Commercial Banks [industries] were up 17.6 percent, 4.8 percent, and 2.5 percent, respectively,” becoming the biggest gainers last week.

In calendar year 2016, KSE-100 Index surged 46%, comparatively ahead of 10-year average of 20%, according to Topline Securities’ report. It posted a whopping 400% increase from 2009 to date, outshone numerous Asian markets, and came fifth in top global markets.

JS Group CCO Khurram Schehzad said, “KSE-100 rose 5,185 points, or 12.2%, in the month of Dec-16 alone, making it the largest rise in the month of December since 2002.”

A rebound in the oil prices, improved safety and security measures in the country, and formal recovery of Pakistan’s Emerging Markets status by MSCI are factors that drove the bullish sentiment, and continue to do so.

However, despite the upsurge, this week poses a risk of instability, as the Panama Leaks case is set to resume on January 4, while at the same time, worldwide oil prices may oscillate on the back of US inventories. Yet, due to the long weekend on the Wall Street, no foreign selling is expected in Pakistan, and local interest continues to grow.

It is noteworthy that CFRA director of ETFs and MF research Todd Rosenbluth commented earlier, “Investors have been embracing riskier assets and moving away from safer municipal bonds and Treasuries,” a local business daily reported on Sunday.

As stocks on the New York Stock Exchange (NYSE) fell on Thursday based on investors’ fears pertaining to budget deficit, no move to safe havens – such as US dollar and bond markets – was observed. This supports Rosenbluth’s statement that movement in non-traditional secure assets is increasing.