PSX post biggest weekly decline of 15 percent since 2008 financial crisis

Dunya News

Pakistan Stock Exchange witnessed a decline of 5393 points during the week.

KARACHI (WEB DESK) - The capital market’s main benchmark KSE-100 index declined by 15 percent during the outgoing week, making it the largest weekly decline since 2008.

Increase in number of coronavirus cases across the country and resulting decline in commercial activity, dominated investors sentiment where index tested its increased halt limit of 5 percent four times during the week.

Decline in policy rate by 75 basis point to 12.5% in monetary policy announcement earlier this week offered no support to the market, as investors expected a larger cut by SBP.

Average daily trade volume and value declined by 9.5% and 33% respectively on WoW basis to 239mn shares and Rs.8.6bn.

Foreigners continued to be sellers in the market, as they sold equities worth $20 million as of yesterday during the outgoing week.

Analyst from Habib Metro-Financial Service said “We foresee a sizeable drop in inflationary pressures in the days to come as lower oil prices in particular and lower commodity prices in general bode well for Pakistan”.

Moreover, this phenomenon will also help in providing much needed relief to the external account as Pakistan’s import bill is likely to be slashed significantly. These developments pave way for a much larger cut in benchmark rates in the remaining FY20.

The equity markets continue to offer highly alluring valuations amid ridiculously cheap multiples, which warrants for a fresh entry. Global financial markets are still in a state of shock and further bouts of volatility cannot be ruled out in the near term, he said.

BMA Capital Management said “Going forward, market sentiments are likely to remain suppressed as coronavirus outbreak remains unabated”.

However, some respite may emanate as investors seek value bargains on signals from effective curtailment of the virus or introduction of a potential vaccine.