Pakistan Stock Exchange remained under pressure during the first quarter of FY20 as it declined by 5.4 percent on quarter-on-quarter basis. During the start of quarter, IMF approved $6.6 billion EFF arrangement which led index to gain 3.0 percent in first three sessions of the quarter. However market turned negative and returned negative 15 percent in first half of the quarter as the government mulled to set aggressive tax collection target of Rs 5.5 trillion from already weakened economy in FY20. This resulted in higher inflation and weighed on overall economy and corporate profits, an analyst at Topline Securities said.
In second half, index generated positive return of 9.0 percent as secondary market yields on longer tenor government bonds started coming down in range of 70-170bps. On portfolio investment side, foreigners remained net buyers of shares worth $23.38 million in cement and Banks primarily. Among locals, mutual funds were the largest sellers amounting to $82.28 million. Investors participation remained on lower side as volumes were down 26 percent on quarter-on-quarter basis.
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