ZUBAIR YAQOOB
KARACHI Trading commenced on a negative note this week as the OPEC+ announced a production cut that remained inefficient to offset the expected drop in demand amid COVID-19, which resulted in a decline in international oil prices. On the other hand, the Sindh government announced a more severe lockdown on account of rising cases in the province which dampened investor’s sentiments. However, sentiment reversed direction on the last trading day whereby steep gains were witnessed in the wake of 200bps cut in the benchmark rate to 9% by the State Bank in an emergency unscheduled meeting, approval of a USD 1.4bn fund by the IMF for Pakistan, sharp decline in 10-year PIB’s yield from 8.65% to 7.7%, and 2% appreciation in the PKR against USD. As a result, the KSE-100 index closed at 32,832pts, up by 799pts or 2.5% WoW. Contribution to the upside was led by Fertilizer (405pts), Cements (170pts), Pharmaceuticals (127pts), Textile Composite (59pts), and Automobile Assemblers (51pts). Scrip wise major gainers were DAWH (143pts), FFC (125pts), ENGRO (108pts), LUCK (80pts), and SEARL (43pts). Whereas, scrip wise major losers were NESTLE (97pts), UBL (56pts) HBL (55pts), BAFL (54pts) and BAHL (32pts). Foreigners offloaded stocks worth of USD 14.24mn compared to a net sell of USD 16.22mn last week. Major selling was witnessed in Commercial Banks (USD 3.79mn) and Fertilizer (USD 3.03mn). On the local front, buying was reported by Insurance Companies (USD 6.80mn) followed by Companies (USD 4.53mn). That said, average daily volumes for the outgoing week were down by 4% to 178mn shares likewise value traded decreased by 10% to USD 37.8mn. Other major new s: SBP slashes policy rate by 200 bps to 9pc in third such move in a month, Foreign exchange: SBP reserves rise $252m to $10.97b Pakistan wins $1.4b IMF emergency loan, Pakistan may fall into a recession due to COVID-19: World Bank, and Car sales fall 47% during JulyMarch FY20.
