Stock Review-Index keeps surging on improved economic factors.

During the week ended 17th April 2020, the benchmark index of Pakistan Stock Exchange (KSE-100 Index) exhibited initial signs of consolidation, managing to close the week at 32,831 points, up 2.5% WoW. This was the third consecutive week of positive returns, a trend last observed at the end of 2019. Macro and policy developments remained in a state of flux, with sentiments broadly coming to a head at the tail-end of the week as foreign debt relief accompanied by the surprise 200bps policy rate cut changed investors' sentiment.

Key news flows during the week included:

1) The SBP launched a refinancing scheme providing cheaper loans to businesses at 4-5% for payment of wages and salaries, while on Thursday, in an emergency meeting of the Monetary Policy Committee of the SBP, the benchmark policy rate was cut by 200bps,

2) The GoP is planning to promulgate a Tax Laws (Amendment) Ordinance, 2020 to implement the tax incentives package for the construction industry including immunity from disclosing the source of investment made in future projects to be executed by developers and builders, a draft of which was passed by the Cabinet,

3) Power Division convened meetings of public sector Independent Power Producers (IPPs), Generation Companies and private sector IPPs on April 15-16th in Islamabad aimed at exploring different ways to reduce tariff, and

4) Pakistan was included in the group of countries eligible for debt relief on all principal and interest payments to bilateral creditors announced by the G20 countries, where reportedly, the suspension period for debt relief will start from 1st May and continue till 1st December, 2020 with all debt service falling due in this period will be packaged into a new loan on which the payments will not start until June 2022.

Sectors driving returns included: Pharma (+12.7%WoW), Edible oil (+11.4%WoW), Steel (+8.8%WoW), while Banks (-2.6% WoW) and Foods (-6.1%WoW) were in the red. Stocks driving the benchmark index higher were: 1) DAWH (18.5%WoW), 2) GSKCH (+17.2%WoW), 3) GHGL (+15.4%WoW), and 4) INIL (+15.0%WoW), whereas laggards during the week were: 1) NESTLE (-14.7%WoW), 2) IDYM (11.1%WoW) and 3) BAFL (-9.0%WoW).

Average daily traded shares during the week remained relatively stable at 178.3 million shares. Volume leaders being: 1) HASCOL (67.2mn shares), 2) MLCF (66.5mn shares), 3) KEL (48.3mn shares), and 4) UNITY (45.0mn shares). Insurance, Individuals and Mutual Funds remained net buyers during the...

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