Highest-ever weekly recovery witnessed

Pakistan Stock Exchange witnessed highest ever weekly recovery during the outgoing week ended on April 3, 2020 on the back of aggressive buying mainly by local investors and institutions.
BRIndex100 gained 408.03 points on week-on-week basis to close at 3,257.62 points. Average daily trading volumes stood at 212.067 million shares.
BRIndex30 surged by 2374.88 points during this week to close at 16,302.63 points with average daily turnover of 161.217 million shares.
KSE-100 index recorded highest ever weekly increase of 3,512.22 points or 12.5 percent on week-on-week basis and closed at 31,621.79 points. Trading activities also improved as average daily volumes on ready counter increased by 51.8 percent to 227.68 million shares as compared to previous week's average of 150.02 million shares. Average daily trading value increased by 70.9 percent to Rs 7.59 billion.
The foreign investors however remained on selling side and withdrew $36 million from Pakistan's capital market during this week and compared to outflow of $13.4 million in previous week. Total market capitalization increased by Rs 542 billion to Rs 6.016 trillion.
"Continuing the momentum gained in the latter part of last week, KSE-100 index closed the out-going week at 31,622 points, gaining 12.5 percent on week-on-week basis - the highest ever in points (up 3,512 points) and highest weekly gain in percentage terms since February 2000 while outperforming other global equity benchmarks on weekly basis (MSCI EM/FM: down 0.48/2.92 percent)", an analyst at AKD Securities said.
Across the board cheap valuations (CY20F P/E: 4.6x, at the start of the week), cabinet approval of the stimulus package announced last week and kick-start of essential industries in the coming week (another incentive package for construction sector announced on Friday) aided investor sentiment in tandem with encouraging news flow regarding number of recoveries from Covid-19.
Within main boards, Cements led the show, gaining 26.0 percent on week-on-week basis on expectation of the construction sector incentive package and news flows suggesting initiation of construction activities for Diamer Bhasha Dam. Cement sector was followed by E&Ps/OMCs gaining 15.7/23.2 percent (as oil prices (Brent) were up 31.5 percent at the time this note goes into publishing, gaining in anticipation of deal between Saudi Arabia and Russia).
For the week, top gainers within AKD universe were ASTL (up 40.4 percent), CHCC (up 37.2 percent), MLCF (up 33.5 percent), PIOC (up 32.9 percent) and KAPCO (up 32.0 percent).
"Till last week, the KSE-100 index had lost 37 percent of its market capitalization from its peak (43,219 on January 13, 2020)", an analyst at JS Global Capital said. There was always a chance that, sooner rather than later, some value buying would be witnessed and so it happened. The KSE-100 index phenomenally recovered 12.5 percent (highest WoW return in recent memory) to close at 31,621 as a string of positive news helped in stimulating positivity at the bourse, overpowering bearish sentiments amid Coronavirus concerns. First and foremost was the anticipated incentive package for the construction sector, followed by expectations of inflows from overseas in lieu of Coronavirus relief and the Rs 1.2 trillion package already announced. Moreover, headline inflation dropped to 10.2 percent on year-on-year basis in March from 12.4 percent in February.
Cements (up 26 percent) and Engineering (up 28 percent) were the obvious gainers as direct beneficiaries of the relief package. Moreover, a rebound in international oil prices triggered a recovery in OMCs (up 23 percent) and E&Ps (up 16 percent). Banks (up 12 percent) also witnessed some positivity during the week.