Karachi, March 27, 2020 (PPI-OT): Bears continue to reign as KSE100 loses another 8.3% WoW
The latest week cost Pakistan equities another 2,558 points as the benchmark index closed at 28,109 level, down 8.3% WoW. Market participation declined significantly as average volumes per day fell by 37% WoW to 150mn shares while value traded declined by 50% to US$27mn per day. During the week, the MPC held an emergency meeting that culminated in a 150bps cut in the policy rate, mere days after a 75bps cut. Cumulatively, the two announcements have brought the policy rate down to 11.00%.
Meanwhile, the government announced a substantial support package worth over Rs1tn to keep the economy afloat. Among numerous other things, the package included a significant cut in POL prices (Rs15 per litre) to be applicable for the next three months and an immediate Rs100bn tax refund to exporters with a deferred payment facility on loans. This may have played a role in the textile sector outperforming the benchmark index during the week. In other news, foreign exchange reserves with the SBP deteriorated by ~US$690mn WoW to ~US$11.9bn, levels last seen in Jan-2020. During the week, the PKR depreciated against the greenback to record levels before recovering to close at 165.50.