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KSE 100 gains 1,291 points in past week on MSCI weight

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KARACHI: Bulls dominated Karachi capital market during outgoing week as the Karachi Stock Exchange (KSE-100) index crossed all time high level of 28,000, mainly supported by the positive developments on the macro economic level while oil and gas sector contributed significantly.
The benchmark index gained 4.76 percent or 1,291.9 points to close at 28,408.03 during the week as compared to 27,116.13 points of previous week’s closing index primarily led by increase in MSCI frontier market weight and anticipated inclusion of Lucky Cement in the index.
Habib Metro Financial Services’ analyst Bilal Asif said, “The month kickoff with an accelerator paddle fully deployed having fifth gear in place. As a consequence within a span of nearly four trading days benchmark added nearly 1,100 points with average daily volume of 292 million shares”. The momentum buildup was such that number of investors were unable to gage the pace and speed of the market. Every next day people feel it’s about time they may get a chance to get the required stocks at a cheaper rate. The increase in MSCI frontier market weight and anticipated inclusion of Luck in the index lift the overall market upwards. Unprecedented buying in Pakistan State Oil from a newly established fund for the country provided another surprise to investors.      
“Now it’s time for investors to look for or dig for real values in stocks. Probably we may have seen in the past substantial activity in mid tier stocks. Nevertheless news related to Dera Ghazi Khan Cement expansion in the south zone did scare the investors as the said news may have implications on the industrial price structure”, added Asif. Asif believed it would be picking and choosing for investors from now on rather a free ride in any stock.   
Another seasoned analyst Furqan Ayub said, “Pakistan equities put on a strong show past week with the KSE-100 Index rising by 4.8 percent Week on Week (WoW) to close at an all time high level of 28,408”.
Bullish sentiment at the bourse was largely premised upon increase in weight for Pakistan equities in the MSCI Frontier Markets 100 Index to 8.9 percent from 4.29 percent and Pakistan’s foreign exchange reserves crossing the $10 billion mark, he added. The surge in the benchmark index also coincided with improved liquidity at the market where average trading volumes rose sharply by 89 percent WoW to 292 million shares. Other key news highlights of the week were Moody assigning (P) Caa 1 rating to Pakistan global bond offering, Pakistan Consumer Price Index (CPI) inflation clocking in at 8.5 percent Year on Year (YoY) in March 2014 as against 7.9 percent in February 2014 and Oil and Gas Development Company (OGDC) announcing a gas discovery at its exploratory well Maru East Well-1, Ayub said.

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