The Karachi stock exchange -100 index continued to climb this week and ended at the record high of 46,585 points. The market continued its upward ride as due to investors showed interest in power sector, pharmaceutical sector and oil and gas sector.
So, let us analyses the key factors that can affect the Pakistan stock market next week.
Russia supports Pak-China Corridor
The foreign investors continue to show confidence in the current economic situation of the Pakistan. Adding to the list is the Russia, who not only supports the China Pak Economic corridor but also wants to improve the bilateral trade with Pakistan.
The Russian has a strong economic model with GDP of 1370 USD Billion. The Pakistan stock market is not considered favorable for long-term investment by the foreign investors. The confidence of the Russian government will also increase the confidence of other investors and will improve the overall investment scenario in the stock market.
Govt Takes back 33Pc cut in gas prices
There is good news for the industrial sector in this winter. Due to the strong protest from the industrial community, Government takes back 33pc cut on the gas prices. This decision will leave a positive impact on the overall profitability of the sector. This will increase the trading activity in major textile based stocks such as The Nishat Mills, the Crescent Mills, and the Fazal Textile mills LTD.
Cotton Prices rebound
It is good news for the cotton investors. The cotton prices increased from Rs 200 to Rs 300 maund. The increase in the cotton prices will increase the net profit of the manufacturers. Consequently, the shareholders will get more dividends.
The reason for the increase is the ban on the Indian cotton. The supply is not matching the demand and resulting in the increase of the cotton prices. So, it’s a good time to invest in the Faisal Spinning, Dawood spinning, and Ittehad textile industry LTD and other spinning mills stocks.
Car manufacturing industry
In 2015, total 179,953 units were assembled and manufactured in the Pakistan. This figure is a valid proof of continuous boom of this industry.
The relevant news is, the Suzuki motor increases car prices by 3%. The net profitability will be increased due to rise in the prices. Pakistan government gave an indication of amending the National auto policy 2016-2021.Auto sector has high expectations from the amended policy .The amended policy can really bring huge investment in the auto sector. Pakistan Suzuki has announced that $460 million in Green Field only if government amends the auto policy. Adding more to the auto industry news, the Renault and Audi have shown interest to invest in the Pakistan. Their inclusion will reduce the monopoly of some of the major car manufacturers namely Honda, Toyota and the Suzuki.
Hubco to build two-imported coal- based plants
The hub power company will build two coal-based plants of 660-megawatt each on imported coal. In the power sector, the Hubco investors have good news in the year- end. The Hubco shares have already shown 21% rise in this year and selling at PKR 123. This mega project will enhance the production capacity in the future and will encourage the investors to invest in the Hubco.