KSE-100 index closes in positive after two consecutive years in red

KARACHI: The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed 2019/2020 with a positive return after two consecutive years in red, portraying a Pak Rupee based increase of 1.5 percent.

Analysts at Arif Habib Limited said that the performance of the fiscal year 2019/2020 is in stark contrast to the last 10-year performance of the benchmark index, which has depicted an average positive return of 15.4 percent.

Key highlights of the outgoing year include:

Macroeconomic concerns were largely controlled before COVID-19 outbreak, especially on the external side [CAD (still under control), currency stability, and building up of FX reserves].

However, post COVID-19 outbreak, the economy slowed down significantly amid introduction of a lockdown and overall decline in consumer spending.

The government announced a fiscal stimulus amounting PKR 1.3tn while the SBP announced various schemes/incentives to support households and industries’ stressed cash cycles alongside a reduction of 625 basis points since March 2020 post COVID-19 to stimulate spending and economic activity.

Profitability declined by -7.2n percent YoY in 9MFY20.

Foreign outflow (USD 279 million) continued for the fifth consecutive year. However, foreigners bought T-bills and PIBs worth USD 688 million.

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