IMS Day Wrap – PSX: The Final Frontier

These are the voyages of the Starship KSE-100. Its mission: to explore new highs, to seek out new venues for investments & new breed of investors, to boldly go where no man has gone before. Naturally we are taking inspiration from a phrase made popular through its use in the title sequence of the original Star Trek television series. Just for the record, the KSE-100 has outpaced its regional peers and is up +11.97% CYTD (US$ based).

As we get ever closer to the D-Day (14th June) the excitement has gone through the roof; almost on the verge of nervousness, and it seems like there is going to be no tomorrow. Frontier markets generally refer to developing markets that are smaller, with legal, financial accounting and regulatory infrastructure that may be weaker or less developed than emerging markets such as Brazil, Russia, India and China. Notably, political stability and investor rights are of greater concern in frontier markets. Often their securities markets are less developed, market depth and breadth may be more limited, and capital flows may be more restricted—all of which may present significant risks to investors. All of this is going to be a thing of the past soon, hopefully.

The 100 index rallied hard and strong in today’s session, enough to move past its previous all-time high of 36,471 and closed up 366.84 points (+1.00%) at 36,685.05. We are now officially trading in uncharted waters. Market participation surged to 274mn shares for the 100 index compared to 134mn shares in the previous session; similarly the All Share index churned 468mn shares, well above its one month average of 240mn shares. For the All Share index this kind of turnover was last seen in July 2015. Most of the index gains came from MCB, PAKT, FML, PTC and ENGRO to the tune of 105 points while on the flip side OGDC, RMPL and ABOT exerted downward pressure by taking away 45 points. Today’s rally was broad based with major gains seen in Telecom services, Utilities and consumer discretionary names. E&P came under selling pressure as crude oil retraced previous gains in the wake of developing expectations of FED rate hike, which is taking its toll on the global market sentiment as well. It’s is pertinent to note that an upgrade to EM status is now essential otherwise expect the unexpected.

Technically speaking, as mentioned earlier in our morning pulse a close above 36,600+ was needed to ensure a convincing breakout. Considering today's close we are now aiming for 38k as our immediate target.