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WEEKLY REVIEW: Positive developments boost Karachi stocks 131 points

KARACHI: The Karachi stock market witnessed a bullish trading week on account of flow of positive news after the International Monetary Fund’s staff meeting with Pakistani officials in Dubai and improved investor confidence regarding ending of prevailing political uncertainty in the country.

The Karachi Stock Exchange (KSE) 100-share index gained 130.73 points or 1.5 percent to close at 9,067.17 points as compared with 8,936.44 points of the previous week.

Analysts said that during the week the market surged on expectations of receipt of $1.8 billion from Friends of Democratic Pakistan next month and reduction of discount rate in the next monetary policy announcement by the end of the current month. The turnover was recorded at 153.52 million shares as compared to 97.12 million shares of the previous week, reflecting an increase of 58.07 percent.

“Key talks between Pakistani officials and the IMF staff continued during the week with the fourth tranche worth $1.2 billion expected to be disbursed by mid-December,” said analyst at JS Research Mustafa Bilwani. “The IMF appreciated the efforts being made by the government on the structural front and hinted at improvement in certain sectors coupled with easing inflation.” It also stated the risks to the broader economy remain and more will need to be done to continue on the recovery path, he saiod and added that the announcement improved investor confidence and helped the index gain 1.6 percent on Friday. Further, the improving economic situation was reflected by the CPI figure for October, which came in at 8.87 percent- back into single digits after a gap of 22 months.

MSCI Barra completed its semi annual review of the MSCI licensed indices, with Pakistan’s 14 scrips having a cumulative weight of 3.4 percent in the frontier index. There was only a single change in the list of the companies, as Engro Chemicals replaced NIB Bank. This positive news flow boosted sentiment in the scrip, which was up 4.7 percent during the last two days. Foreigners were amongst the major sellers as they offloaded shares worth US$7.5mn. On the contrary, mutual funds remained net buyers worth US$5.8mn. “Bullish activity was witnessed in oversold market as political uncertainty waned with Pakistan People’s Party and Pakistan Muslim League-Nawaz dialogue and expectations of receipt of $1.2 billion IMF tranche next month,” said analyst at Shahzad Chamdia Sec Ahsan Mehanti.

Investors remained optimistic on renewed foreign interest, inclusion of Engro in MSCI Pakistan Index, rise in international oil prices and favourable inflation numbers, he said. staff report

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