Announcement of the relief package last week amounting to PKR1.2tn as a fiscal stimulus as well as targeted relief packages for the export oriented and construction sector helped drive the local bourse to its best weekly return in over a decade. The KSE 100 index rallied 12.5% WoW amassing 3,512 points to deliver a decisive close at a level of 31,622 points. Further, optimism emanated from NCPI for Mar’20 at 10.24% YoY or 0.04% MoM on the back of lower food and energy rates. On the other hand, trade balance saw a dip of 30/27% YoY/MoM during Mar’20 with a deficit of USD1.5bn as compared to USD2.1bn last year on the back of 20/21% drop in imports.

Market participation saw an increase where ADTO clocked in at 228mn (up 22% WoW) while ADTV rose to USD45mn (up 24% WoW). For the week, major inflows (four days) amounting USD10.2mn and USD6.9mn were witnessed from individuals and mutual funds companies, while brokers emerged as net sellers worth USD0.3mn during the week. Foreign investors sold a cumulative of USD27.4mn worth of equities during the week concentrated towards Oil and Gas, Cements and Commercial Bank sectors.

Outlook

The upcoming week will likely negate the disappointing data release expected from various industries as lockdown continues to restrict normal business. Moreover, any developments with regards to international oil prices and movement are likely to grasp investor’s attention. We expect the rally to partially spill over the next week provided concerns over coronavirus spread remain in check. (BMA Capital Management Ltd.)