Reason of increased profitability
Profitability of listed companies increase by a massive 43% as finance cost decreases 28%.
Economic activity resumed after lock down restrictions eased. SBP took several measures to stimulate activity in the economy including monetary easing & deferred loan payments. The central bank has cut policy rate by 625bps to 7% since beginning of the pandemic.
We gathered data of 399 companies listed on the Pakistan Stock Exchange to analyze the change in their finance cost and profitability during the quarter ended Sep 30, 2020.
Collectively they paid PKR 29bn as finance cost during the period which was 28% less compared to Jul – Sep 2019. Highest net interest was paid by the textile composite sector followed by the cement sector.
Profitability increased by 43% during the quarter to PKR 215.73bn with commercial banks recording the highest net profit of PKR 67.91bn followed by the Oil & Gas Exploration Sector.