The KSE 100 Index is sustaining above 40k and appears to have absorbed another hike in the policy rate that has taken the policy rate to 21%.
More over. No more selling pressure in the market, foreign or otherwise. And despite taking a hit in profitability, listed companies are generating a relatively good dividend stream. Further, the valuation measures are at historic lows. Companies buying back their own shares. Insiders are lifting big chunks and building positions.
All this is putting a floor under the market.
All of this has been true for quite some time, though. But the market kept descending. The event flow at the national level had overtaken the market, and events are still in the lead. It is not about fundamentals anymore. Since the mid-eighties, I have not seen a more negative flow of events. This period seems to be statistically improbable.
Political issues at the national level have created an environment that has shaken business confidence. Just as a weak body attracts various ailments, our weak polity has created various issues for public finances and the business environment.
At this stage Pakistan stock market is waiting for an event. An event that could show that national politics is stabilizing and institutional networks are intact. Such an event would give a tremendous boost to the market.