December 31, 2019 (MLN): As the year 2019 draws to the close, a look back at the dynamics of Pakistan’s equity market signifies that it is not the same as it was when a year was started, it seems that the dynamics have reversed in the blink of an eye.
To start it off, it is worthwhile to note that over the year, the benchmark KSE-100 index gained 3,668 points or up by 9.9% as compared to 2018. The market gave positive returns after two years since 2016 when it surged by 45.68%.
The year 2019 emerged as a heterogeneous year for Pakistan’s equities, from its beginning till August 16, 2019 stock market displayed a dismal performance as it recorded a decline of 22% or down by 8,302 points. Afterwards, the market bounced back in style and has surprised many by its recovery as it surged by 38% or 11,172 points.
During the post-IMF period i.e. by Jul- Aug 2019, the overselling was witnessed and the market traded so thinly that it recorded an all-time low of 28,673 points on August 19, 2019, which the market has not been revisited yet.
The resurgence of the equity market was witnessed after August 2019 as myriad imbalances on the macro front started reversing. A relatively stable exchange rate, peaked-out interest rates and shrinking twin deficits were initial signs of improving economic health which prompted nous investors to aggressively buy stocks.
This proved sufficient to scare away the bearish sentiments and the market shot up like fireworks. Meanwhile, the overall Market Capitalization decreased by 8.94% or $4.9 billion mainly due to PKR depreciation by 11.5% during 2019.
The sectors that contributed in propping the index up during the year were Commercial Banks (1,867 points), Fertilizer (1,132 points), Oil &Gas Exploration Companies (941 points), Investment Banks/ Investment and Securities Companies (437 points) and Automobile Assembler (127 points).
Company-wise Scrips of ENGRO (782 points), HBL (709 points), UBL (597 points), DAWH (429 points) and OGDC (359 points) endured the maximum gain during 2019.
On the other hand, the sectors such as Cement, Tobacco, Refinery, Pharmaceuticals and Food and Personal Care products emerged as the top losers as they collectively snatched 691 points from the index.
Company-wise KAPCO (-130 points), FFBL (-116 points), PAKT (-110 points), HASCOL (-109 points), SEARL (-107 points) endured the maximum loses during the year.
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