The benchmark index of Pakistan Stock Exchange (PSX)
continued its slide during the week ended on 27th March 2020, closing at 28,110
points, down 8.34%WoW on coronavirus hype. State Bank of Pakistan (SBP)
announced a policy rate cut of 150bps taking the cumulative rate cut to 225bps.
There was also an announcement of Rs1.2 trillion stimulus packages, but market
sentiment remained bearish. To a large extent PSX also remained insulated to
the announcement of massive economic stimulus by the US, as opposed to visible
cheering by the other stock markets around the globe. Stocks generating the
highest volumes during the week included:
KEL, UNITY, BOP, HASCOL and MLCF, while laggards were: HASCOL, PSMC,
PSO, ASTL and DGKC.
Major news flow during the week included: 1) announcement of
Rs100 billion refunds to export sectors along with deferred payment of
principal and interests on bank loans, 2) Rs100 billion for deferred payment of
loans for small and medium enterprises (SMEs), agriculture and concessional
loans, 3) reduction in the prices of petrol, diesel and kerosene with immediate
effect, 4) divestment from government debt instruments by foreign investors
reaching some US$1.8 billion, 5) Pak rupee depreciating 4.3% against greenback
over the week, 6) ministry requesting OMCs to halt petroleum imports and
increase their offtake from local refineries, and 6) GoP considering to
approach multilateral lending agencies for additional financial assistance for
fighting adverse economic impact of pandemic. Resulting from reduced market timings,
average daily trading volumes declined 37.3%WoW to 150 million shares. While
the market sentiments in the upcoming week are likely to be dictated by how GoP
grapples with rising coronavirus cases in Pakistan, sectors relatively
insulated from direct economic impacts may manage to remain afloat. The
benchmark index has already shed 33.5% CYTD.
