Stock Watch - New year starts on promising note as PSX index gains 3.6%wow.

Summary

Pakistan Stock Exchange which in the last two weeks of last year December 2019 closed in depressing mode but started with a bang in year 2020 with a rise of 1,475 points on a number of positive news.

In the year 2019, 1H2019 a decline of 9% followed by 2H2019 gains of 20%. The KSE-100 Index recorded a bottom of 28,764 on Aug 16, 2019 (YTD decline of 22%). Overall, the KSE-100 Index recorded an increase of 10% in 2019 in PKR terms. The overall market capitalization closed the year Rs.7,812 billion compared to last year's closing of Rs.7,693 billion. The average volume dipped to lowest since 2016 to 159m shares/day.

Pakistan stocks managed to give a positive return of 10 percent in 2019, after investors were faced with negative returns for two consecutive previous years (minus 8% in 2018 and minus 15 percent for 2017).

Among the positive news were the acknowledgement by IMF that Pakistan's reform program is on track and already producing results. The approval of bills to change laws governing tenure of services chiefs, chairman and joint chiefs of staff committee. The introduction of 'pro-business NAB law' by the government as newly promulgated National Accountability Bureau ( Amendment) Ordinance 2019.

During the week the KSE-100 Index gained 1,475 points to close at 42,323.30. The average volume increased to 282m share/day and the market capitalization increased by Rs.194 billion to Rs.8016 billion.

The stock market closed flat on the first trading day Monday with KSE=100 Index up by marginal 39.10 at 40,887.63. The volume declined to 166 m share/day.

On Tuesday there was directionless trading. The Index lost 152.55 points to close at 40,735.08.

The new year on Wednesday started with cheer of 665-point rally. The volume jumped to 331 points to close at 41,400.00.

On Thursday there was an grand rally of 1,081 points. The investors seems to be confidence over some positives changes in the economy. The downward revision in profit rates between 24 bps and 36 bps on National Saving Schemes will indicated possibility of fund flow into the capital market. The introduction of changes in NAB laws and the amendment in Army Acts signal positive development in the economy. The Index closed at 42,480.70 points.

The last day of the week Friday saw the profit-taking by the investor, The market shed 157.40 points to...