Pakistan Stock Exchange crashes but cement script sustained

The Pakistan Stock Exchange (PSX) plummeted Monday morning due to the crash in crude oil prices and the fear of the global spread of coronavirus. The PSX lost more than 2100 points in 100 indexes of stock across the board as all scripts were down, including the cement industry. However, later the investors realised that fall in crude prices would not impact the cement industry, they have resumed fresh buying and most of the cement scripts regained their lost value.

However, uncertainty is still hanging over the stock market, as a research house predicts that a fall in crude prices will impact oil and gas sector scripts and would also create negative sentiments for the overall market.

The crude prices deeply submerged due to trade war between Saudi Arabia and Russia yesterday and caused a fall in the world stock market.

Pakistan’s cement industry would be beneficial on the back of fall in crude prices. According to a research report of BMA Capital Management Ltd, it will help to reduce production and dispatch cost in the country.

Analyst at BMA sees the depleting crude prices, positive for cement industry and stated that cement Pakistani manufacturers will likely to benefit the most from lower oil prices due to a likely reduction in energy and transportation costs. Moreover, a lower interest rate scenario will bode well for the leveraged sector, which is expected to benefit from the uplift in demand as economic activity picks pace to post the reduction in interest rates.

It may be mentioned here that international oil prices witnessed one of its largest drops in history, with Brent falling by ~30 per cent in two days to around US$32/bbl. Oil prices lost major grounds due to a discord between two major oil producers in Saudi Arabia and Russia, with both countries unable to reach a conclusion over the quantum of production cuts.