Positive trend witnessed

Pakistan Stock Exchange witnessed positive trend during the outgoing week ended on April 17, 2020 due to healthy buying mainly by local investors coupled with institutional support.

BRIndex100 gained 75.99 points or week-on-week basis to close at 3,376.06 points. Average daily trading volumes stood at 161.894 million shares.

BRIndex30 increased by 423.63 points during this week to close at 17,190.16 points with average daily turnover of 120.096 million shares.

KSE-100 index surged by 798.62 points or 2.5 percent on week-on-week basis and closed at 32,831.83 points. Trading activities and future counter however remained low as average daily volumes on ready counter decreased by 4.2 percent to 178.28 million shares as compared to previous week's average of 186.14 million shares. Average daily trading value declined by Rs 10.1 percent to Rs 6.28 billion.

The foreign investors remained on the selling side and withdrew $14.24 million from the local capital market during this week as compared to outflow of $16.22 million during previous week. Total market capitalization increased by Rs 150 billion to Rs 6.205 trillion.

"Amidst wider domestic healthcare and Covid-19 driven economic developments adopted by the Government of Pakistan, the KSE-100 showcased initial signs of consolidation, managing to close the week up 2.5 percent on week-on-week basis, its third consecutive week of positive returns, a trend last observed during Nov- Dec'19", an analyst at AKD Securities said. Macro and policy developments remained in a state of flux, with sentiments broadly recovering, coming to a head at the tail-end of the week as foreign debt relief accompanied by the surprise 200bps policy rate decline laid the groundwork for risk-on sentiment.

Sectors driving returns included Pharma (up 12.7 percent), Edible oil (up 11.4 percent), Steel (up 8.8 percent) while Banks (down 2.6 percent) and Foods (down 6.1 percent) were in the red.

Stocks driving the KSE-100 index higher were DAWH (up 18.5 percent), GSKCH (up 17.2 percent), GHGL (up 15.4 percent) and INIL (up 15.0 percent), whereas laggards during the week were NESTLE (down 14.7 percent), IDYM (down 11.1 percent) and BAFL (down 9.0 percent).

An analyst at JS Global Capital said that after starting the week on the back foot, losing 1,000 on the very first day, there was an ominous feeling about the market this week yet again. This was nothing out of the ordinary, as global markets had been receding constantly amid the Covid-19 outbreak. Indeed, the market remained sideways for the major part of the week after the first session. However, three major announcements turned the market on its head, gaining 1,502 points in the final session to close at 32,832, up 2.5 percent on week-on-week basis. Firstly, in what most saw as a surprise move, the SBP cut the policy rate by 200bps to 9.00 percent, making it 425bps cut in total so far in 2020. Secondly, the IMF board finally gave approval for $1.4 billion Rapid Financing Instrument (RFI) as Covid-19 support for Pakistan. Finally, the G-20 countries agreed to increase the scope of debt relief from 25 least developed countries (not including Pakistan) to 76 countries (including Pakistan), which would result in postponement of debt payments for one year. To put things in context, as per the foreign minister, the country pays $10-12 billion per annum to multilateral and bilateral lenders.