May 22, 2020 (MLN): The KSE-100 index performed beyond expectations during the month of April, in spite of several atrocities and hardships that the country saw as a result of the COVID-19 pandemic.
In our review done on the performance of the benchmark index earlier this month, we discussed how the timely decisions taken by the State Bank of Pakistan regarding the cut in policy rates helped in lifting market sentiments.
Furthermore, the fact that several companies were given permission by their respective Provincial Governments to resume operations also helped in improving market activity.
All in all, the benchmark index managed to gain approximately 4,880 points during the month and settled at 34,111-level, i.e. 16.69% higher than the close of the previous month.
Keeping in line with this, all Equity Mutual Funds generated positive returns during the month under review, with several passing the benchmark set by the KSE-100 index i.e. 16.69% by an exceptional margin.
As seen in the graph below, the top three positions were grabbed by the equity stocks of HBL. HBL Growth Fund emerged as the top-performing stock as it provided a return of 26.26% to its investors, followed by the HBL Investment Fund and HBL Energy Fund as they generated returns of 25.83% and 25.16% respectively.
Apart from the stocks of HBL, the JS Growth Fund, ABL Stock Fund, and MCB Pakistan Stock Market Fund also performed fairly as they managed to provide returns of 22.62%, 20.71%, and 20.47% respectively.
Shariah Compliant Equity Funds
The performance of the Islamic Equity Funds during the month of April 2020 recuperated well compared to the previous month as the equity market sentiments improving due to a reduction in interest rates and stability in PKR against USD.
In addition to this, after reopening of the economy by the federal government to lessen the impact of Covid-19 on different sectors, a sharp recovery on the economic front is expected to fuel up demand and lower financial costs on the other side support the company’s profitability which built positive sentiments in the market.
Just like the conventional equities, Islamic equities also recouped the bulk of its losses in April 2020 compared to March 2020 prompted by the aforesaid factors as KMI-30 index, which is the benchmark for Shariah Complaint Equity Funds, gained around 10,478 points during the month, i.e. up by 23% as compared to last month.
Based on the data aligned by Mettis Global Private Limited, only 6 Shariah Complaint Equity Funds out of 18 successfully managed to cross the benchmark of 23%, while all funds delivered positive returns to their investors.
Of these 6 funds whose returns were higher than the KMI-30 index, the top 3 best performing funds were Al Ameen Shariah Stock Fund, NBP Islamic Energy Fund, and ABL Islamic Stock Fund.
Al Ameen Shariah Stock Fund recorded a 25.58% surge in its Net Asset Value (NAV), followed by First NBP Islamic Energy Fund and ABL Islamic Stock Fund whose returns jumped by 25.10% and 24.83% respectively.
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