EUR 8.55 For Business Accounts Only

Pakistan Market Strategy: Market down 22.8% in 4QFY19; In FY19 Market down 38.5%

• Pakistan market witnessed a major decline of 12% (23% in US$ terms) during 4QFY19 amidst macro-economic uncertainties. During Jan-June 2019 it is down  9% (21%US$).
• During the outgoing fiscal year, the benchmark Pakistan Index fell by 19% (~39% US$) for the second consecutive year. The said decline takes the last two fiscal year losses to 27% (52% US$).
• Market capitalization has fallen drastically by 53% in the last 2 fiscal years from US$91bn to US$43bn in FY19 primarily on the back of worsening economic conditions and significant PKR devaluation.
• During FY19, the market activity also remained muted as average volumes during the day fell by 11% YoY to 155mn, while in PKR terms value per day settled around Rs6.4bn; down by 22% YoY in the cash market. Furthermore, in the Futures market, average volume per day was up by 14% to ~69mn shares while the average value per day was down by 19% to Rs2.7bn, respectively.
• USD currency strengthened significantly by 14% in the last quarter against local currency, taking total FY19 gains to 32%. During the last 2 years, US greenback has gained approximately 53% against Pak rupee, respectively. 
• Amongst regional countries, Pakistan stock exchange (PSX) was one of the worst performing markets; down by ~23%/39% during the 4QFY19 and in FY19 respectively, according to the Bloomberg data.
• Though foreign investors were buyers in the last 2 quarters; they remain sellers during the FY19. Foreigners as per NCCPL bought shares worth USD1,501mn and sold USD1,857mn in FY19 resulting in net selling of USD356mn.