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Pakistan Stock Exchange reaches nine-month high

SAMAA | - Posted: Dec 5, 2019 | Last Updated: 10 months ago
Posted: Dec 5, 2019 | Last Updated: 10 months ago
Pakistan Stock Exchange reaches nine-month high

Pakistani stockbrokers sit near a share prices board during a trading session at the Pakistan Stock Exchange in Karachi. Photo: AFP

The Pakistan Stock Exchange (PSX) crossed the 40,600 mark in the first half of Thursday showing a steady upward trend. This is the highest PSX level since early February.

The rise can be partly attributed to local sentiment and buyers’ confidence due to macro-economic improvement. Moody’s recently upgraded Pakistan’s economic outlook rating from negative to stable. New and individual traders seemed to have made the most of the market’s activity and claimed profits of up to 40% since August.

While the market is expected to beat February’s peak of 41,600, a correction exercise (when the market shrinks back to its actual value) cannot be ruled out.

However, the State Bank repaying the $1 billion Sukuk Bonds loan to the US with interest may have an effect on the rupee’s value. It may drop slightly.

“With around 40% returns since the year-to-date low [in August], a correction is possible but local investor sentiment remains strong and so are flows. The market continues to look good on a medium-term view,” Raza Jafri, research director at Intermarket Securities, told SAMAA Digital.

He said that mutual funds are cautious about investing in the PSX just yet, but if they turn more aggressive, it could extend the market’s momentum.

With cement sales’ growth up to 5.8% in the second half of the 2019 financial year, analysts predict that this will soon translate into higher cement sector dividends along with steel, energy and eventually the auto sector, ensuring long-term sustainability in the market.

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