KARACHI: Pakistan Stock Exchange (PSX) touched record high levels on Monday, as investors look ahead to multiplied foreign inflows after MSCI decided to take Pakistan in the Emerging Market (EM) Index again from June 1, 2017.
The total index fund size tracking the EM markets is $1.7 trillion. Analysts believe as per the weightage of 0.15 percent to 0.20 percent, the PSX may register passive inflows of around $400 million during the coming period.
The KSE-100 shares index surged 2.18 percent, or 1,084.78 points, to close at 50,935.91 points. KSE-30 shares index gained 2.63 percent, or 696.70 points, to end at 27,147.67 points. On January 27, 2017, the KSE-100 index made the last record at 50,887 points.
“Domestic investors are buying scrips that will be part of the EM Index ahead of the expected foreign passive inflows of around $300 to $400 million,” Khurram Schehzad, chief commercial officer at JS Global Capital, said.
The market activity improved a bit, as the day’s turnover stood at 326.125 million shares as compared to 308.119 million shares during the last trading session on Friday. Mohammad Sohail, CEO of Topline Securities, believes that net inflows from foreigners during 2017 could be in the range of $100 million to $200 million.
“It is likely that those flows would be met much quicker, as funds tracking MSCI-EM Index may cross large blocks of shares with FM funds, as witnessed during the FTSE rebalancing. “Further, we believe local funds would also provide liquidity to the foreigners, as they have deployed idle cash post-Panama case verdict,” Sohail said in a report.
Top index point contributors on Monday were all MSCI names again with Habib Bank Limited (HBL), United Bank Limited (UBL) and MCB Bank closing at their upper locks, Oil and Gas Development Company (OGDC up 4.3 percent and Lucky Cement up 2.4 percent racking up 552 points to the upside.
The local bourse witnessed across-the-board positivity, as of the 411 scrips traded, 262 closed in the positive zone, 129 declined and 20 remained unchanged. E&P sector gained to close 3.3 percent higher than its previous day’s closing where Pakistan oilfields Limited (POL) up 3.30 percent and Pakistan Petroleum Limited (PPL) up 2.43 percent were the major gainers of the sector.
Growth was also witnessed in the steel sector with International Steel Limited (ISL) up 4.83 percent and Amreli Steel Limited (ASL) up 4.98 percent closed in the green.
Ahsan Mehanti at Arif Habib Limited, said that the stocks closed all-time high led by auto, banking and oil, as investors weigh MSCI announcements on Pakistan reclassification to the Emerging Markets with May 2017 semi-annual index review results likely next week and the Moody's affirmation on Pakistan's B3 ratings with stable outlook.
The MSCI announced on June 14, 2016 that Pakistan will be reclassified from the Frontier Markets (FM) to the Emerging Markets (EM) coinciding with the May 2017 semi-annual index review. The exact proportion of Pakistan market in the MSCI-EM and the stocks to be included are to be announced on May 15, 2017, and would be effective from June 1, 2017.
Highest volumes were witnessed in Engro Polymer with a turnover of 34.942 million shares. The scrip gained two paisas to close at Rs30.95/share. Bank of Punjab (BoP) was the second with a turnover of 18.293 million shares. It gained 34 paisas to end at Rs14.10/share. Aisha Steel Mill was third with a turnover of 17.361 million shares. It gained Rs1.16 to finish at Rs24.44/share.