KARACHI: The Pakistan Stock Exchange (PSX) touched an all-time high of 52,500 points on Monday, after adding 770 points to the benchmark 100-index.
The run is mostly driven by Pakistan’s inclusion in the Morgan Stanley Capital International’s Emerging Market Index (MSCI).
It was only last Monday when KSE 100 was trading below the 50,000 level.
Today is the sixth day since and the benchmark index has surged past the 52,500-resistance, gaining some 845 pips for the day but the index is marching north with full force and has gained some 2500 points in between.
According to CEO IFSL — a PSX brokerage house — it was initially CEPC and now Pakistan’s entry into MSCI-EM that is fueling investors’ risk appetite.
“This is the reason for the 100-index’s bull run,” he opined.
MSCI, in a review on June 14, 2016, promoted Pakistan from the Frontier Markets to Emerging Markets Index.
Initially, nine companies were included but two companies were removed in the November 14, 2016, review.
MSCI will review and announce the exact proportion of the Pakistani market and stock to be included and effective from June 1, 2017.The announcement would define the future course of the market.
While financial markets move on sentiment and at present the sentiment is positive, one should always keep the dogma “buy rumors, sell fact” in mind — it often comes into play in the stock market.