During May’16 the benchmark of Pakistan stock market, PSX-100 Index continued its upward trajectory breaking its all-time high and crossing 36,000 resistance level. This happened almost after a year as the market closed at 36,062, up a healthy 1,343 points from 34,719 at end April’16. Volumes also picked up the pace during the month as average daily volume rose to 272 million shares as compared to an average daily volume of 235 million a month ago.
The month started with persistent upward trajectory, gaining points on daily basis, crossing 36,000 mark in the first few days; breaking its all-time high of 36,205 touched in August last year, with 37,000 barrier in sight and setting a new all-time high of 36,723. Market remained range bound during the middle on account of investors remaining on sidelines and pre-budget jitters. However, Index lost its momentum in the last few days of the month on account of political noise and anticipation of tax-laden budget to be announced during first week of June’16.
Going forward, analysts believe that future Index direction would depend on the upcoming budget. PML-N led government wants to improve power sector liquidity situation by resolving circular debt issue and reducing subsidy on power tariff, which bodes well for power generation and oil marketing companies.
Any attempt to increase capital gains tax (CGT) on equity income would have negative impact on the market. However, in medium to long-term, investors are likely to focus more on economic improvement which would come from large infrastructure projects of China-Pakistan Economic Corridor (CPEC).
The incumbent government has also expressed intentions to increase allocation for public sector development projects that will provide impetus to cement and banking sectors, which are under pressure after recent surprise interest rate cut announced by the central bank.
Analysts also anticipate higher inflow of funds in equities market amid speculation of announcement of likely inclusion of Pakistan in MSCI’s Emerging Markets. Investors have a preference for better dividend yielding companies belonging to power and fertilizer sectors, whereas cement and power sectors are forecast to outperform the benchmark index.
Breaking 10-month long selling spree foreigners were net buyers during the month under review, purchasing equities worth US$3.62 million. Sector-wise, key recipients were Oil & Gas (net inflow of US$13.5 million), Cements (net inflow of US$6.5 million) and Fertilizers (net inflow of US$3.1 million) while Commercial Banks registered a net outflow of US$6.6 million.
- Achieving food security in Pakistan
- Announcement of policy rate by State Bank of Pakistan
- Defending Pakistan's territorial integrity
- Dirty oil politics
- Dishonest Western Media
- Energy Crisis in Pakistan
- Financial Inclusion program of SBP
- Geo political importance of Pakistan
- Geo Politics in South Asia and MENA
- Global Oil Glut
- Importance of remittances in pakistan's economy
- Investing in Commodities
- Investing in Pakistan stock market
- Investing in Pakistan Stock Market
- Investment opportunities in Pakistan
- Islamic Finance in Pakistan
- Making textile insutry robust
- Mutual Funds in Pakistan
- Oil and Gas Production in Pakistan
- Pak Afghan Relations
- Pakistan Foreign Policy
- Pakistan Stock Market Weekly Review
- Perforamance of exploration & production companies
- Performance of cement industry in Pakistan
- performance of commercial banks in Pakistan
- Performance of commerciial banks
- Performance of energy sector companies
- Performance of Fertilizer Industry in Pakistan
- Performance of insurance companies in Pakistan
- Performance of power generation companies
- Performance of textile sector of Pakistan
- Robust agriculture in Pakistan
- State of Pakistan Economy
- State of Pakistan's economy
- State of Pakistan's Economy
- Taxing POL consumers
- Textile Exports of Pakistan
- US-Saudi oil war
- War between shale oil producers and OPEC
- Warehouse Receipt Financing in Pakistan
- Who controls this world