Local bourse gained 0.75% on week-on-week basis after MQM ended protests, coupled with healthy foreign buying, successful government offering of UBL, and
Mari announced higher-than-expected production estimates from Ghauri field which brought renewed interest in MARI and PPL. Textile sector also remained in limelight in anticipation of favourable textile policy. News about Government transferring lands to PTC management also helped stock to post gains during the week. Going forward, road shows for next government offering and parliament discussions on budgetary measures will be eyed.
Stock market experts said that despite deterioration in the law and order situation of the city, the celebratory mood at the local bourse was evident as
Overall the benchmark KSE-100 Index rose by 0.8%WoW to close at 29,731. Market liquidity on the other hand was lower compared to last week as average volumes traded during the week dipped by 18%WoW to 216mn shares. On the macro front, (1)
Experts said that the month of May has historically been a dull period for Pakistani equities as over the past 10yr average return during the month has been at -2.5% vs 10yr average annual return of 26%.
Dullness in the market persists during May mainly because of Budget being right around the corner, which forces many investors wait for clarity before dipping their feet in the market A similar story has unfolded this year, with investors facing confusion regarding the upcoming changes in the CGT (Capital Gains Tax) rate and holding period.
However, these dynamics changed yesterday. With recently made changes to MSCI FM Index coming into effect at the end of May 30’14, foreigners flocked to the bourse to get their portfolios recalibrated in accordance with the upcoming changes to the index. This led to brisk activity at the bourse yesterday, which saw benchmark KSE-100 Index gaining stellar 556.26pts (1.92%). Following a 251 session high net foreign buy of
Though sentiments are seemingly restored unanswered questions regarding future of CGT, remain high on investors’ mind. In today’s report we make an effort to deduce what happened yesterday, how it will affect the market’s performance in the long term, how much foreigners actually bought and what they bought.
Around 15 companies that make up for Pakistan’s 7.4% weight in MSCI FM Index cumulatively gained 2.3% yesterday, and in the process outshone the broader market by 40bps. In addition to this, contribution of these companies in markets upsurge of 556.25 was realized at 69% or 382.25 points. The Oil sector enjoyed
Amongst Oil sector we believe PSO enjoyed the highest inflow, followed by OGDC and PPL (rough workings suggest foreigners bought 1.2m PSO, 585k OGDC and 579k PPL shares). Following on, the Chemical and Construction sectors experienced net foreign buying of
In Chemical sector,
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