Stock Watch- Stocks remain upbeat after positive steps taken to keep economy progress under covid-19 fear.

Summary

Government is faced with the task of controlling spread of coronavirus in the country while at the same time continue with the positive activity to run the economy of the country. It's a great balancing act as said by Prime Minister Imran Khan. The government has taken the risk to walk through the two extreme poles of managing the pandemic as well as to start gradually economic development efforts.

There were some specific decisions and action plans initiated by government, which has boosted the moral of investors and businessmen. As such the stock market remained positive throughout the week except on Monday when it shed 1000 points.

First there was the unexpected cut in monetary policy rate to 9 percent in emergency meeting, making it 425 bps cut in 2020 and to meet the demand of business committee for a single-digit policy rate. During the week, KSE-100 Index gained 799 points an increase of 2.49%. The volume declined to average 178 million and the market capitalisation increased by 150 billion to close at Rs.6,205 trillion.

Second the IMF Board finally gave approval for US$1.4 billion Rapid Financing Instrument (RFI) as COVID-19 support for Pakistan.

Thirdly G20 countries agreed to increase the scope of debt relief from 25 least developing countries (excluding Pakistan) to 76 countries (including Pakistan) which would result in postponement of debts payment for one year. The country pays $10-12 billion per annum to multilateral and bilateral lenders.

Finally Ordinance promulgated by President Arif Alvi for Tax Laws (Amendment Ordinance 2020 for Construction Industry).

The week on Monday started with the news on Sunday by World Bank "Pakistan faces sharp economic recession along with a skyrocketing fiscal deficit as fallout from the prevailing global coronavirus pandemic". The KSE-100 Index declined by 1000.22 to close at 31,032.99.

On Tuesday, the market remained range bound. The good news was the Asian Development Bank (ADB) agreed to lend $800 million to Pakistan help combat challenges posed by coronavirus. The Index gained 189.75 points to close at 31,222.74.

On Wednesday, the stock opened positive on the partial lifting of lock down. The stock closed flat at 31,242.19 with a gain of 19.48 points.

The stock continued to gain 87.27 points as the relaxation of lockdown continued. The Index closed at 31,329.49 on Thursday.

On Friday, the market turned bullish and skyrocketed by 1,502 points or 4.8 percent. It was the highest...