Banks lead Pakistan share rally
Pakistan's benchmark stock index gained yesterday, led by banking shares on expectation they will report higher earnings as economic growth accelerates and companies borrow to expand and meet demand.
The Karachi Stock Exchange 100 Index rose 120.25 points, or one per cent, to 11,895.07 at close. National Bank of Pakistan Ltd, the country’s biggest lender by assets, added 1 per cent to Rs242.25.
“Shares gained because of a rally in banking shares because they were undervalued and also on expectation that they will report an increase in profit,” said Syed Ali Hussain, head of research at Investcapital Securities Ltd in Karachi.
Pakistan’s banks are attracting overseas investors as they profit from rising demand for credit in an economy the government estimates will grow seven per cent in the year that ends on June 30, faster than the 6.6 per cent growth a year earlier.
Bank loans to companies amounted to Rs402 billion in the year ended on June 30, 2006, exceeding the central bank’s target of Rs330 billion.
“Growth in car sales prompted buying in auto shares, pushing the index into positive,” Hussain said.