The Pakistan Stock Market benchmark index has sunk to a five-year low because of the coronavirus. The KSE-100 index, a market gauge to determine its standing, has not been this low since at least March 2015.
It went down a staggering 37% since January 10 this year. A drop of 30.8% alone has been recorded since March 5 when news of COVID-19 intensified.
The index was trading above 27,000 points but blue chip companies are panicking. Sui Norther Gas Pipelines lost 48% of its share price followed by Nishat Mills, recording a loss of 47.95% in the same period. Lucky Cement was no different, incurring a loss of 40.59% of its value.
A consistent leader, Bank of Punjab, plummeted 39.88%.
Due to these factors and a lockdown in the PSX home province of Sindh, the Security Exchange Commission of Pakistan made some changes in the schedule and conditions of the market.
The trade halt limit was first increased from 45 minutes to 120 minutes. The trade halt is a temporary suspension in trading to stem market volatility when KSE30, which tracks the performance of 30 large and most liquid (frequently traded) stocks, declines or surges around 5% of its opening value. However on the request of the market it was brought down to 1 hour where it stands now. The market opening hours were changed from 9am to 11am.
Stock experts have, however, suggested that since it has hit rock bottom, the market is ripe to ensure profits from this point forward.
“A situation in which the market has lost nearly 40% in a matter of days cannot go on like this for long,” wrote Standard Capital in its report on the market performance. It added that the market is “certainly ripe for value-seeking on paper at least.”
But the report also noted that given the uncertainty of local and global markets at this point, “Investor interest is needed to be safeguarded.”