Pakistan Stock Market Sets New Record Highest Weekly Gain of 12.5%
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Bulls made an energetic comeback at the Pakistan Stock Exchange (PSX) following three weeks of bearish trade as the KSE-100 index rebounded with 12.5% jump – the highest weekly return. The KSE-100 index posted gains of 3,512 points settle at 31,622 points.
Investors cheered measure announced by the government to soften the below to the economy from the coronavirus pandemic, which fueled a rally at the bourse.
We will see great rebound in our New York stock market also. It has happened before and it will take place again.
“Till the last week, the KSE-100 index had lost 37% of its market capitalization from its peak (43,219 on January 13, 2020). There was always a chance that, sooner rather than later, some value buying would be witnessed and so it happened.”
Although Monday witnessed a marginally bearish session following a rout in global markets as worldwide fatalities from the coronavirus pandemic rose swiftly, turnaround was quick. The Economic Coordination Committee (ECC) approved a Rs 1.2 Trillion economic relief package to shield the economy from adverse effect of the coronavirus pandemic. Buoyed by the announcement, investors made fresh investment in the PSX as it climbed over 1,000 points.
Meanwhile, recovery in global and reginal stock market, which staged modest rallies to end the quarter on bullish note also lent support to the domestic market. Further positive measure by the government and a lower inflation reading for March 2020 continued to bolster investor sentiments.
With the few positive developments on the horizon, the stock market staged a handsome rally on Thursday and soared close to 1,300 points as investors cherry-picked stocks that had dropped to attractive valuation following multiple rounds of hammering in the past month owing to the spread Covid-19 in Pakistan.
Banks and E&P stocks had rallied stocks had rallied as valuations had reached dirt cheap levels. Towards the end of the week president Trump`s announcement of a possible agreement between Saudi Arabia and Russia to cut production also sent oil prices soaring (WTI up 18%) week on oil had taken such a deep downturn that it was to rebound and thereby E&P Stocks. Bulls maintained control on the last trading of the week as the index- heavy stocks pushed the benchmark well above 31,000 points.
The rally marked the fourth successive session in the green despite growing COVID-19 cases in the country and overseas.
The euphoria was seen on the back of prime minister`s assurance to the construction sector for an economic relief package coupled with Moody`s rating agency`s upbeat statement about measures taken by the state bank of Pakistan to cut the key policy rate and cushion banks asset quality and lending business, which sparked institutional interest. Participation picked up as average volume jumped 52% week on week to 228 million, while average value surged 66% week on week to 46 million. Investors hunting for bargains saw the opportunity to jump back in the stock market which help single week gain.
In terms of sectors, contributions came from commercial banks (up746 points), oil and gas exploration companies (550 points), and cement (537 points). Scrip wise, positive contribution was led by HUBC (up 290 points), Luck (227 points) and UBL (186 points).
Other major news of the week: inflation rate dropped to 10.2% in March, Moody`s sees Pakistan growth rates sliding to 2% demand for electric, gas, oil drops dramatically, and ECC approved Rs, 1.2 Trillion relief package.
We have seen few years back Pakistan stock market on fire. Increases day by day, month by month, and setting new records.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
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