Pakistan Stock Exchange witnessed positive trend during the four-day outgoing week ended on April 30, 2020, on the back of local investors and institutional support.
KSE Index100 gained 146.85 points on a week-on-week basis to close at 3,516.34 points. Average daily trading volumes stood at 163.412 million shares.
KSE Index30 increased by 1224.32 points to close at 18,211.91 points with an average daily turnover of 122.523 million shares.
KSE-100 index surged by 1260.81 points or 3.8 per cent on a weekly basis and closed at 34,111.64 points. Trading activities, however, remained thin as average daily volumes on ready counter decreased by 39.6 per cent to 178.56 million shares as compared to the previous week’s average of 295.82 million shares. Average daily trading value declined by Rs 40.3 per cent to Rs 7.82 billion.
The foreign investors remained on the selling side and withdrew $11.6 million from the local capital market during this week. Total market capitalization increased by Rs 184 billion to Rs 6.376 trillion. “After starting the week off on the wrong foot (KSE-100 declined by 1.5 per cent on first trading day of the week), the market witnessed a stellar performance throughout the remaining three days, providing a perfect closing to the month where 16.7 per cent gain during April 2020 stands to be the highest gain in April for the last decade at least,” an analyst at AKD Securities said.
He said various factors contributed to the cause as increasing oil prices (WTI/Brent increased by 2.7/22.1 percent during the week) provided much-needed support to the oil and gas sector which remained one of the top-performing sectors for the week. On the other hand, expectations of further monetary easing kept cyclical sectors like Cement and Engineering into the limelight, providing more fuel to the market.
Sectors driving returns included Automobile parts and accessories (up 10.5 percent), Oil and gas exploration (up 10.3 percent), Power (up 6.7 percent) while Tobacco (down 6.2 percent) and Commercial Banks (down 0.4 percent) were in the red. Top gainers during the outgoing week were ISL (up 13.9 percent), NATF (up 13.8 percent), HUBC (up 12.3 percent) and NML (up 11.7 percent), whereas laggards during the week were IDYM (down 12.8 percent), SCBPL (down 9.4 percent) and BAFL (down 7.3 percent).
An analyst at JS Global Capital said that the four trading days saw the KSE-100 index of the PSX gain 3.8 percent on a week-on-week basis as it closed at 34,111 level. However, investors’ participation remained dull due to Ramazan; daily traded volumes declined by 40 percent.
Within sectors, E&Ps and Engineering outperformed the index while Commercial Banks underperformed. The week saw some recovery in international crude oil prices which may have supported the index heavyweight E&P sector.
IMF Loan and increasing trend of PSX
On 29 March 2020, the Managing Director of the International Monetary Fund (IMF) announced that the government of Pakistan has requested 1.4 billion dollars under the Rapid Financing Instrument (RFI) and stated that a fund’s team was working expeditiously to respond to this request so that a proposal can be considered by the IMF’s executive board as soon as possible.
Pakistan will receive $1.4 billion from the International Monetary Fund (IMF) next, under the Rapid Financing Instrument (RFI) to deal with the economic turmoil in the wake of coronavirus.
Pakistan Stock Exchange (PSX) was in the green zone earlier in April, with the benchmark KSE-100 Index up over 900 points after the International Monetary Fund (IMF) announced that they would be lending $1.4 billion to Pakistan.
At the time of filing this report at 1:30 pm, the KSE-100 Index was being traded at 31,891.91 points with a positive change of 920.64 points and a percentage change of 2.97 pc.
Government-IMF reached the agreement for $450 million payout
Earlier in February 2020, The International Monetary Fund (IMF) has reached the staff-level agreement during the second review of Pakistan’s economic program under the Extended Fund Facility (EFF).
Ernesto Ramirez Rigo, the Mission’s Chief for Pakistan, on the second review of the Extended Fund Facility (EFF) said: “Following discussions between the International Monetary Fund (IMF) staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, the IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and reforms needed to complete the second review of the authority’s reform program supported under the EFF.
The agreement is subject to approval by the IMF management and consideration by the executive board, which is expected in early April. Completion of the review will enable disbursement of $450 million.