Pak stocks cross 30,000 points barrier

After weeks of shedding points due to uncertainty caused by political crisis in the country, Pakistan's stock exchange crossed the 30,000 points psychological barrier in the trading week ending on Friday.
Spurred on by mostly foreign institutional investors, the Karachi Stock Exchange (KSE) 100 index gained 186.52 points (0.62 per cent) to settle at 30,044.89 as the market closed on Friday.
During the week, foreign investors had bought approximately USD 8.34 million worth of stocks taking the week's inflow to USD 18.6m, a financial analyst said.
"Clearly it seems investors have regained confidence after weeks of uncertainty caused by the political scenario in the country," he said.

Zubair Ghulam Hussain, head of equity sales at Foundations Securities, which caters mainly to the overseas clients, said, "Month-to-date foreign inflows amount to USD 38m and the year-to-date (since July) figure looms at USD 136m."
So, while the local institutional and individual investors, fearful of the political uncertainty and economic headwinds, stood on the sidelines, the foreign investors did not act like a panic-prone herd and seized the opportunity to pick up blue-chip stocks at dips after the index had plunged by over 1,500 points post July.

Hussain insists that there is method in this madness.
"While weak sentiments have played havoc with local investors, foreigners look at ground realities," he said.

The senior broker, however, cautioned that if the political uncertainty continued and the government was to be displaced, the market can expect foreign investors to flee.
On Friday, mutual funds were other major buyers of USD 4.7m worth equity. The funds had put to use the cash generated from huge sales the previous month while oil and gas sector remained the apple of investors' eye as they invested mainly in currency hedged stocks.
Over the past week, the KSE-100 index gained 531 points or 1.8 pc. A senior analyst cautioned that the market could face a low down if the political deadlock continued between the ruling PML (N) and Imran Khan-led PTI.

Another factor that could affect the market is that the government has failed to meet their 4 per cent power tariff hike deadline and this could delay the IMF loan's fifth tranche to the government.
"Broad macro metrics could witness further slippage across the next few months as ongoing flooding has an impact," Raza Jafri, head of research at AKD Securities said.