KSE 100 index closed at 49434.59 on 6th March 2017 after facing a decrease of about 118.92 points. Nowadays, KSE 100 index is facing problems due to current political uncertainty as well as security situation. The following are some of the important factors which are bound to affect the Pakistan stock market:
Rapidly fluctuating oil prices
Oil prices are fluctuating for past few days. It is not only petrol prices but also crude oil prices which have been increasing all over the world. In 2016, the prices of oil were decreasing steadily. However, after the start of 2017, this trend has changed. It has increased to $57 per barrel a week ago. Due to this, there has been an increase of about 10 Rs. Per liter in Pakistani market as well. This increase in oil prices is positively affecting the stock market of Pakistan as prices of oil based stocks are increasing with the increase in the oil prices. But increasing oil prices are bad for overall economy as it can hurt the long-term profitability of the big industries of the country.
Increasing value of real estate in Gwadar
Due to CPEC projects, the value of real estate has been increasing tremendously. These increasing prices are good for overall economic situation of country since it is bound to give boost to stock market. If this works out, the investments in stock market are estimated to be increased by 50% by 2020. There would be an immense development in power as well as cement industry stocks. So, cement and power sectors stocks can really help investors to improve their long term returns. They can easily improve their long term returns by investing in cement and power sectors stocks. However, there are still security situations due to which there is a some uncertainty regarding potential of real estate business.
Issue of Panama leaks finished
The issue of Panama leaks has finally come to an end with the court sessions coming to an end. This is good for political stability and would surely be good for economic conditions as well. However, if the decision is against Prime Minister, then it would increase the political instability and stock market would get affected adversely.Buy and hold investing strategy is best for investors at that moment of time.
ECO session in Islamabad
ECO session was held in Islamabad on 1st March 2017. In this conference, many heads of states participated which has given a strong hope that economic boost would be given to Pakistan. The local stock market is also expected to stabilize after this conference. This has increased the sense of security not only locally but also internationally.
Issue of brokers
Broker’s issues are one of the most important issues in any stock market. Previously, such issues caused KSE to fall by more than 6%, thus causing turmoil in local economy. The issue of fraudulent brokers is also fresh right now due to which companies are hesitating to invest in Karachi stock exchange. Similar issues are again on a rise due to which foreign and domestic investors confidence is badly hurt.