Shares rally at PSX after govt's support measures give investors relief, hope - Business

Shares at the Pakistan Stock Exchange changed course today after days of carnage, with the government’s recent policy measures – which include a Rs1.2 trillion stimulus package and a slashed policy rate – giving investors some much needed relief and hope after the virus outbreak has slowed down economic activity in the country.

The benchmark index opened at 27,228 and has largely kept an upward trajectory since. Around 12:25pm, almost two hours intro trading, the KSE-100 was up 826 points or 3.03 per cent at 28,054.

Major gainers today as of 12:25pm.

Speaking to on today’s situation, Ali Asghar Poonawala, Deputy Head of Research at AKD Securities, said the market was “posting a relief rally”.

“Value seekers seemed to have found solace in a stream of policy measures in favour of market participants, where raising of debt financing limits and reduced tax measures were seen to improve liquidity,” he said.

Additionally, Poonawala said broad-based sectoral performance including Banks, Foods, Cements and Power sectors indicate investors were swaying towards equity exposures after the State Bank’s recent cut in benchmark rates reduced required returns.

“Investors await clarity on leniency in banking sector arrangements where initial reports indicate that Banks/DFIs could be allowed to extend some relief in markup payments and debt restructuring,” Poonawala said, adding that reclassification of margins on lending may dampen the blow to incomes in the real economy from the ongoing coronavirus pandemic.