CHINESE INVESTMENT TRIGGERS SUBSTANTIAL GROWTH IN PAKISTAN STOCK MARKET
Chinese consortium to appoint its directors at the board of PSX soon
The bench mark KSE-100 Index managed to post a new high and closed well above 50,000. The current formation of historic level indicates that Index could continue this upside move with the exception of intermittent correction due to heavy buying in the coming week.
Although the Index dipped slightly by 228 points on the last trading session of the week after rallying to the all-time high beyond 50,000 levels dipped slightly below 50,000 levels as the profit making drags the Index to 49,963 levels, yet the market sentiments are still bullish and trading in the coming week above mentioned resistance zone could add further gains and could lead the Index towards second resistance zone, which is placed at 51,500.
After epoch making entry of Chinese investors into Pakistan capital market, the Pakistan Stock Exchange is actively considering to float CPEC infrastructure bonds, which may be a major sign of Chinese investment in Pakistan stock market. The infrastructure bond names as Pakistan Development Fund (PDF), worth Rs150 billion has enough potential to gear up the market in near future.
In fact the week stared on a positive note and crossed 50,000pts on several occasions, however, it could not retain this level as profit-taking pushed the Index down to close the week below 50,000pts.
KSE-100 closed the week at 49,963.8pts with a WoW increase of 1.2%. Foreign Institutions Portfolio investment (FIPI) registered net outflow of US$13.6mn. Average volume traded increased massively by 34.7% WoW with average value traded by 16.1% WoW.
Meanwhile stability in international oil prices, which rose in the previous session to US$54/bbl, highest in three weeks, as US stocks rallied and added long position in crude oil proved to be a windfall for the oil based stocks and oil marketing companies. However, US oil production increased to 8.96mnbpd, offsetting significant amounts of any OPEC-led supply cut.