KARACHI: The stock market investors had little to cheer in the first nine months (July-March) of 2019-20 as they were handed down a negative return of 13.78 per cent (minus 17.22pc in dollar terms).

The Pakistan Economic Survey points out that Covid-19 was damaging. But as we calculate from July 1 of the previous year to date (June 11), the market has managed to recoup all the losses and yield a positive return of 3.62pc.

In contrast, the market was down 19.11pc in FY19 and 17.30pc in the 10-month period. The PSX outperformed the MSCI Emerging Market index which fell 19.61pc during July-March.

The survey notes: “Between Feb 26 and Mar 31, the index dived 23.75pc and Rs1,582bn were wiped out of the market capitalisation. Rupee depreciated by 8pc against the dollar between that period which constrained the spending power.”

However, the fiscal stimulus package announced by the government in late March and the SBP deciding to cut policy rate by 425 basis points to 9pc made up for the projected loss.

Turnover remained low in the first quarter of FY20 and in February, indicting investors’ unwillingness to put their money at risk by taking stakes in shares. But the timely release of Public Sector Development Programme funds, stable exchange rate and improvement in macro indicators showed market rise during October-January.

Total funds mobilised by the market in July-March stood at Rs250 billion. The figure last year was Rs22bn and the significant difference was due to debt amount issued which came in at Rs230bn, up from Rs14bn.

During the year, foreigners offloaded shares worth $130m which were absorbed by the domestic investors. Total number of companies stood at 530 with aggregate market capitalisation amounting to Rs5,621bn. Not a single new entity came up for listing against two the previous year.

Published in Dawn, June 12th, 2020