March 03, 2020 (MLN): The month of February was host to a number of antagonistic news for the domestic Stock market that shifted investors into panic mode thereby wiping out steady gains of last month.
Subsequently, the KSE-100 index lost around 3,647 points during the month and concluded at 37, 983 -level, nearly 8.76% lower than the previous month’s close of 41,630 points. In the preceding month, KSE-100 index gained around 896 points, delivering a return of 2.2% MoM.
This big bombshell in Benchmark KSE-100 Index is attributable to multiple factors, as at the beginning of the month, a hotter than expected CPI readings for January and delays in conclusion of the second IMF review dented investors’ confidence.
In addition to this, a deterioration in large scale manufacturing index on account of low demand, increase in yields of government securities, concerns over fiscal recovery due to considerable revenue shortfall and the vagueness over FATF meeting to ascertain Pakistan’s status have shattered market sentiments and investors chose to remain on sideline as they figured further slowdown in the economy.
In the mid of the month, the market took a temporary breather as FATF decided to put Pakistan in grey list till June 2020, moreover speculators also took an advantage of the massive panic selling by buying stocks on dips which led the market to recover some of its losses.
Nevertheless, again a selling stampede in global equity markets was observed as the epidemic Coronavirus dispersed rapidly beyond its epicenter in China, reaching to other Asian Countries including Pakistan further exacerbated negativity and havoc, triggering the selling pressure in the domestic market.
With all this negativity, Market Capitalization of All share Index took a tumble as well by recording a massive decline of 9.67% MoM to stand at Rs 7.85 trillion.
The sectors that contributed in dwindling the index during the month were Oil &Gas Exploration Companies (992 points), Commercial Banks (575 points), Oil & Gas Marketing Companies (399 points), Fertilizer (326 points) and Power Generation and Distribution Companies (254 points).
Company-wise Scrips of PPL (461 points), OGDC (287 points), ENGRO (215 points), PSO (198 points) and DAWH (176 points) endured the maximum loss during the month.
Moreover, Foreign investors were net sellers during the month, with the total selling by them being recorded at $56.397 million with the major selling observed in Oil & Gas Exploration sector followed by Cement and Commercial Banks. Amongst these investors, Foreign Corporates were the largest sellers with a total sale of securities worth $55.69 million.
On the other hand, local investors were the net buyers, with Insurance Companies making the largest purchase of $55.624 million worth of shares.
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