January 7, 2020 (MLN): Having started the year on an applause-worthy note, the KSE-100 index took a sudden hit amidst mounting tensions in the Middle East after the assassination of Iranian General by the United States.
Despite these unsettling political situations, as well as many other unforeseen events that will certainly take place this year, several market spectators, including Darson Securities, believe that the benchmark index might cross the 50,000-level by the end of the year 2020.
This expectation has been backed by various other assumptions pertaining to the state of the economy, some of which include growth in corporate earnings, the materialization of the second phase of CPEC and monetary policy easing which is expected to take place in May 2020.
Moreover, the increase in cash liquidity and higher flexibility of the incumbent government towards its predecessors is further expected to boost investor participation throughout the year.
However, it is imperative to bear in mind that this prophecy shall materialize only if there are no economic hindrances. For example, the threat of Pakistan being blacklisted by the Financial Action Task Force (FATF) lest it fails to comply with the given conditions might take a serious toll on the equity market. Similarly, any further external shocks of political nature might shake the confidence of several investors, which may end up in several points being taken away from the benchmark index.
Nonetheless, given the pace of economic recovery as well as the positive impact of stringent policies implemented by the incumbent government in the previous year, the chances of the benchmark index surpassing 50,000 points after almost three years are somewhat high.
