On Monday, the Pakistan Stock Exchange (PSX) saw a comeback of bulls as shares increased by more than 500 points. Analysts attributed the move to expectations that political groups would soon come to an agreement over the formation of the government.
Growing skepticism regarding the establishment of a fresh coalition government last week, coupled with nationwide demonstrations against purported election results tampering, kept market confidence low. The KSE 100-share index fell by an incredible 3,071.04 points, or 4.9 percent, week over week, closing at 59,872.96 points.
Today the index moved sideways, indicating a high level of volatility. But at closing, the KSE-100 index increased by 586.78, or 0.98 percent, from the previous finish of 59,872.96 to 60,226.43.
The director of research at Next Capital Limited, Shahab Farooq, observed that “prevalent political uncertainty” was the reason behind the stock exchange’s ongoing volatility.
He did, however, add that the market was “fueled positive sentiments” by the PML-N and PPP’s prospects of a settlement, the Supreme Court’s adjournment of the hearing on an application to annul the polls on February 8, and the rebound in foreign bonds.
It should be noted that just one day prior, PML-N leader Khawaja Asif declared that the PPP and PML-N will establish the federal government against all odds, and insiders informed Dawn that Nawaz Sharif was actively involved in the backroom negotiations to build the federal and Punjabi administrations.
Topline Securities CEO Mohammed Sohail also credited the increasing trend to expectations that political parties will soon come to an agreement on forming a new administration.
Even though futures had dropped the week before, he said, mood had strengthened.
Head of JS Global’s equities sales Faran Rizvi noted that investors hoping for sustained economic stability needed to analyze future government initiatives.
He pointed out that given their potential to “benefit from the recovery of the economy and regulations supporting financial sectors,” banking stocks may be a robust long-term investment, even though the market might be unstable until a new administration was formed.
SOURCE: DAWN NEWS
