Leading brokerage houses have reduced their growth forecasts for Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index by a huge 7,000 to 8,000 points, which will reach 41,000-42,000 points by the end of this year.
Most research houses had predicted that the index would end 2020 in the range of 49,000 to 51,000 points in December 2019, considering the stability at that time and expected return of growth to the national economy.
Talking to the media, Director Research Atif Zafar said, “There is room for reduction in the PSX growth projection by 7,000-8,000 points to around 41,000-42,000 points by the end of December 2020.”
“The growth in the index will be lower due to the coronavirus pandemic, lockdowns in many countries, a massive drop in international crude oil prices and other commodities, and a likely 200-basis-point cut by the State Bank of Pakistan in the benchmark interest rate by December 2020,” he added.
Arif Habib Limited Head of Research Samiullah Tariq said, “The market has bottomed out, the stock market may consolidate around 30,000 points.”
Furthermore, he predicted, “We had anticipated that the PSX benchmark index would grow to 51,000 points by the end of December 2020. The growth may fall short by around 5,000 points.”
In a recent report, Sharman Securities’ analyst Aftab Awan said, “After adjusting for the recent plunge in international energy prices and the higher probability of a sharp policy rate cut in 2020, we revised downwards our earnings estimates.”