February augured well for Pakistan stocks market where most of the indictors are in the green zone with Pakistan equities clinching back the top-five equity market slot by what the analyst said outshining the global average returns. Pakistan equities with 7 per cent returns were rated fourth after China (7 per cent), India (5 per cent) and Indonesia (1 per cent) in terms of average market returns in the Asia Pacific region for the month of February.
On the inflows front, of the total $12.53 billion net inflows that came into the Asia Pacific region during the month under review Pakistan received $8.2 million, which placed the country on third position in the region after India and Indonesia which, respectively, attracted foreign portfolio investment of $4.9 billion and negative $166 million. Thursday saw the benchmark 100-share index closing as high as 12,941 points after peaking to the intraday high of 12,957 points, the market observers foresee the index all set to cross the 13,000 level anytime soon. “With the upside trends the KSE 100 index (is) preparing itself to cross 13,000 points level,” viewed Abdul Azeem, an analyst at InvestCap Research.
During February, the index outperformed its benchmark MSCI Frontier Market index with a fat margin of 2 per cent, the Emerging Markets by 6 per cent and the MSCI World index b 5 per cent. The trading turnover at KSE is also higher with daily average volumes standing at 128.4 million shares and market capital accumulating to at $36.7 billion.
The market observers, however, warn that the ball was in the government’s court as a stretch from Islamabad’s assurances on the implementation of reformed CGT (Capital Gains Tax) regime might spoil the current rosy picture at the country’s bourses. “Continuity of the market rally is now largely contingent upon the materialisation of the verbal acceptances with respect to the changed CGT regime while any stretch from April 2001 (implementation deadline) may cascade negative impacts on both volumes and returns,” warned Khurram Schehzad, Head of Research at InvestCap. The analyst said the long-awaited acceptances over the most-aching CGT-related concerns by the Ministry of Finance did the KSE 100 attract the desired liquidity levels.
As such, he said, besides yielding over 8.4 per cent in Feb-12, KSE 100 recorded healthy improvement in average trading volumes of 40.7 per cent MoM and 36.9 per cent YoY to $61.9 million during the month.
