Foreigners buy equity worth $10 million

KARACHI: Opening the books after the holiday season, foreign fund managers swooped on the Pakistan equities, lapping up $10 million worth of blue chips.
 
Net inflow after the buy at $10m and sell amounting to $3m stood at $7 million for Tuesday. That propelled KSE-100 index by a massive 220 points.


Traders listed all the good things that had happened or were about to happen, which attracted foreign interest. A return of whopping 60 per cent that the Pakistani stocks yielded during the outgoing year was given a hard look. But some brokers and analysts were not impressed.

Nasim Beg, CEO at Arif Habib Investments, said that investors globally had realised that equities, though among the high risk asset class, also was provider of higher returns.

“Stock markets in many developed countries outperformed our markets because of a low or zero interest rates,” he said. The treasury must have their own problems on mind regarding inflation, but Mr Beg, also a manager of several large funds, expected interest rates to taper off allowing local markets to perform at par with the global trend.

He thought that for a consistent return, investors should put money in mutual funds from time to time, as the markets could go up as well as down. Over the longer term, he visualized the market to reach for the skies.

But many thought that this was the time to take the plunge. And though individuals sold almost equal $7 million worth of shares on Tuesday, traders said it was a mix of both: sheer desperation and the urge to seize the opportunity to make hay while the sun was shining.

Sajid Bhanji, VP at AHL, said that the law and order situation was improving; cracks in the micro numbers were on the mend and share valuations were still good.

The upcoming result season would bring forth corporate performance figures within the next two three weeks for oil marketing companies and oil exploration companies (half terms) and fertiliser and banks (full year).

Many analysts forecast an end of the nagging problem of non-performing loans (NPL), mirrored by hefty rise in banking stocks. But two of the stocks had much to do with the day’s market performance.

Investors warmly greeted the newly-listed Ghani Gases Limited. They sought to strike a bargain at Rs20 to 22 for the company stock, which the seasoned fund managers had valued at Rs14 under the book-binding exercise. And second the index heavyweight OGDC--the oil exploration giant--hit the maximum 5 per cent, adding Rs5.52 to the stock value and contributing 80 points to the index.