Euphoria over MSCI inclusion drives stocks to new peak

Euphoria over MSCI inclusion drives stocks to new peak

KARACHI: Pakistan Stock Exchange (PSX) performed extremely good last week and set new records mainly on the back of institutional and retail buying, brokers told Business92.

The bourse continued the positive momentum of last week. and first day of the week marked a rally at the index with the KSE-100 closing at its all-time high of 50,936 points.

“We cite re-inclusion of Pakistan in the MSCI Emerging Market Index as the primary reason for upbeat sentiments of market participants in the past week,” said an analyst at Arif Habib Securities.

The market ended this week achieving yet another high water mark of 51,751 points, up 3.8 percent from last week.

Some of the potential scrips for MSCI EM inclusion contributed a total of 737 points to the index, namely HBL (+261 points), MCB (+190 points), LUCK (+148 points), and OGDC (+138 points).

On a sectorial basis Commercial Banks emerged as the top contributor (+715 points) to the index amid exuberance over MSCI inclusion. Similarly, E&Ps contributed 363 points with Arab Light price rebounding (up 4.02 percent WoW) on the back of a possible extension in the OPEC production cut. Cements added another 142 points to the index, fueled by the investor interest in LUCK.

The buoyant sentiments of market participants was also reflected in the average daily traded volumes, which increased to 355 million shares this week compared to 259 million shares last week (up 37 percentWoW).

Foreign players continued to be net sellers during the week ($2.47 million vis-à-vis net sell of $19.2 million last week) with overseas corporates leading the offloading with a net outflows recorded at $2.1 million.  Albeit, foreign investors too built positions in the MSCI scrips (net buying was witnessed in cements: $2.3 million).

The statement of Finance Minister Mohammed Ishaq Dar that the country’s economy is expected to grow above 5 percent in ongoing fiscal and stable rating by Moody’s impacted the market positively.

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