The pundits at Karachi Stocks Exchange (KSE) foresee the equity market to shoot up by 400 to 500 points on Monday in reaction to the dominant position the Pakistan Muslim League-Nawaz (PML-N) has achieved in Saturday’s general elections.
The unofficial election results so far reported by the media clearly put PML-N in the driving seat with 125 seats possibly to form a coalition government in center. The PPP and PTI are fighting each other for the runner-up position having so far begged 32 and 31 National Assembly seats, respectively.
Saturday’s political positive, stocks analysts and brokers believe, would have a skyrocketing affect on the country’s largest bourse on Monday, the first day of trading after polls.
“The stocks market would react very positively to the formation of a business-friendly government in the country,” viewed Mohammad Yasin Lakhani, a senior broker and director of KSE board.
Led by the sentiments of risk-averse investors, the equity market, Lakhani said, would remain in a positive mode in the post-election scenario. He, however, desisted from quoting numbers in terms of increase the KSE 100-share index would be witnessing today (Monday).
“By quoting figures I don’t want to give a lead to the investors,” the chief executive of Lakhani Securities said.
While the KSE director did not give a figure, other market observers offered their estimates for Monday’s hike. “The index (on Monday) is likely to rise by 2.5 to 3 percent,” said an analyst, requesting anonymity. This percentage, the analyst said, would translate into a gain of 400 to 500 points for the benchmark index.
Mohammad Sohail, chief executive officer of Topline Securities, also forecasted Monday to be a bullish day on the back of one party, PML-N, getting closer to win a simple majority in the lower house. “With one party getting closer to majority in election, the stocks market would rally on Monday,” the senior equity analyst viewed.
Lakhani, however, insisted that investors’ sentiment would remain positive even if the PML-N failed to win a majority and had to form a coalition government. “In that case the party would easily form government with likeminded parties and even a coalition government would benefit the stocks market,” the former KSE chairman opined.
Asked what makes him believe that Nawaz Sharif, the country’s would-be prime minister, would be business friendly in his policy approach, the senior broker replied: “The past”.
“The past experience tells us that he would be pro-business. Frankly, Nawaz is a human and not a cat which has nine lives. He must have realized now that the Almighty is not going to bless him with opportunities again and again,” argued Lakhani. “The market would boom as soon as it opens,” he said recalling that many of the inquisitive investors started ringing him up as soon as the unofficial election results started pouring in.
The trend at KSE, on the eve of general election, already has been bullish with Friday, last week’s trading day, seeing the index peaking to an all time high of 19,916.27 points, gaining 254.81 points on the back of investors’ hope for the formation of a ‘pro-business’ government.
The country’s equity market, analysts said, had neared the $ 50 billion mark with the market capital on Friday standing above Rs 4.889 trillion compared to Rs 4.836 trillion of the previous trading session. “Pakistan market is now worth approximately $ 50 billion,” rejoiced Sohail.
