COVID19 PREVENTIVE MEASURES MADE POSITIVE ECONOMIC IMPACT AS KSE100 CLIMBS.

SUMMARY

Government started taking medical and economic measures since Covid19 outbreak in Pakistan in March 2020. Covid19 seems to be blessing in disguise for the economy of Pakistan as it opened doors of opportunities and unthinkable steps to follow. The deferment of IMF's program for at least a year to save around $12 billion payment and the flow of $1.4 billion from IMF for coronavirus and other multilateral institutions to follow.

State Bank of Pakistan (SBP) had to revisit policy rate within a month to bring down policy rate from 11% to single digit 9%.

Government has introduced a number of economic packages. It has announced a Rs.1.2 trillion package mostly cash payment to poorer of the society. Rs.70 billion package for laid off worker and Rs.51 billion package for SME.

The importance of all these economic or survival packages are that for the first time the growth will follow different pattern from down to up thus should benefitting the poorer and middle class section of the society.

The investor in stock realizes the importance of these timely action in correct direction and PM statement "Covid19 cases far less compared to other states" reassures them.

Short 4 days trading week due to May 1 holiday, saw the index gain1,305 points to cross 34,000 level to close at 34,111.64. The average KSE100 Index volume decreased to 178 million. The market capitalization increased by Rs.209 billion to Rs.6,377 trillion.

Stocks dip 492 points on Monday as some lower earning given by some companies. Amreli Steels post Rs.688 million loss. PSO earnings tumble 49 percent. KSE100 Index lost 491.81 points and closed at 32,314.57.

On Tuesday there was the unexpected buying by foreigner of $0.21m. The news of cement price not revised downward picked up by cement sector. The Maple Leaf and Pioneer were gainers. Stocks added 602 points to close at 32,553.39.

On Wednesday the expectation of declining inflation and indication of further interest rate cut pushed the Index up by 605 points to close at 33.158.84. Finally the market on Thursday remained buoyant because of number of positive developments like single digit head line inflation for April, further 200 bps cut in policy rate, positive trend oil price in international market, sharp recovery...