The KSE-100 index rose by just about 5 per cent, which was at the lower end of nine competitive regional markets. Indonesia took the lead with 38.8 per cent gain since March 31 and a cumulative growth of 43.8 per cent for the year to date.
‘The KSE has been bleeding due to battle in the North of the country, as well as law and order situation in some other cities’, says a stock broker.
On the other hand, the gains achieved by the MSCI emerging market and MSCI World Indices were attributed by Farhan Mahmood at JS Global to ‘easing concern of global recessionary woes, improved liquidity conditions and reduced risk-aversion of investors’.
In the first quarter of the year, the KSE had beat the best of the regional markets and its cumulative growth at 20.6 per cent was only slightly down the Mumbai index rise by 21.5 per cent.
China was another country that has not done well in 2Q so far with only 9.4 per cent rise, though its aggregate gains in 2009 at 42.5 per cent, was a close second to Indonesia’s cumulative growth of 43.8 per cent including the highest gain of 38.8 per cent in 2Q.
Other markets which fared well during the period included: Taiwan up 28.6pc, India 26.1pc, Korea 24.5pc, Thailand 23.1pc, Malaysia 21.2pc and Philippines rising by 12.5pc.
Traders and brokers at the KSE hoped that healthy corporate earnings announced by most companies in the last reporting season and stable macroeconomic environment in the country could still put the KSE back on the rails.
The question mark was not then on the fundamentals for many stocks at the KSE still offered dividend yields of over 13 per cent, but on the administration’s ability to quickly restore the law and order situation to a semblance of normalcy.
Frontier Index
Investors are watching out with interest the results of the MSCI Inc, Semi-Annual Index Review, scheduled for May 13. MSCI Inc, the internationally acclaimed index provider, headquartered in New York, calculates over 120,000 indices across 70 countries daily.
As the Pakistani stock index was displaced from the ‘Emerging market’ and shifted to ‘the Frontier market’, the results announced by MSCI would be closely watched by the local and foreign investors. Sajid Bhanji, senior analyst and investment manager at Arif Habib Limited, said that the significance of it all lies in the fact that following the Pakistani Index induction into the Frontier market, it would be for the first time that its weightage would be disclosed by MSCI.
In addition, the results would also reveal the Pakistani companies that have been selected to be a part of the Pakistani index in the Frontier market. ‘Those companies can benefit as they will appear on the radar screen of foreign investors who track the MSCI indices’, says Sajid.
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