Bulls take PSX to record high in 600-point surge in intraday trade
The Pakistan Stock Exchange’s benchmark KSE-100 index traded in the green in early morning trade on Wednesday and crossed the 54,000 barrier.
At 11:30am, the index gained 615.22, or 1.14 per cent, from the previous close of 53,735.73 to reach 54,350.95.
Mohammed Sohail, chief executive of Topline Securities, said, “Another high touched by KSE-100 index reaching 54400 during the trading this morning.”
He said the positive sentiment was due to expectations building that interest rates may come down sooner than expected after a fall in global oil prices, which will help in easing inflation in Pakistan.
Faran Rizvi, head of equity sales at JS Global, said that the market has entered uncharted territory, and is technically being overbought and potentially in need of a pause at these levels.
However, he cautioned that the stock valuations remain remarkably low, and investors are actively seeking opportunities that have yet to fully materialise.
“Stock valuations have declined to just one-third of the index’s peak as observed back in May 2017.
“To provide a specific example, the price-to-earnings multiple — a measure of a company’s share value relative to its per-share earnings — stood at 12 in May 2017 when the index was around 52,800 points. Presently, this multiple has dwindled to a mere four, even as the benchmark hovers around 54,500 points.”
