December 01, 2020 (MLN): Alongside other financial markets around the globe, Pakistan Stock Market wrapped a cheery month on Monday, with the benchmark KSE-100 index recovered 1,181 points following two consecutive negative months.
The major breakthroughs during the month in the quest for an effective Covid-19 vaccine have strengthened investors’ confidence, as the promising results from vaccine trials has set the stage for a rapid economic recovery next year.
The month started on a bearish note, as the announcement of US electoral results kept the overall global equity markets in to negative territory. However, the announcement of Biden victory recovered earlier losses.
On the domestic front, the factors that rekindled investors’ interest in domestic equities include, lower than expected CPI numbers in October, Industrial Support Package announced by PM that offers additional consumption of electricity to small and medium industries at 50% less rates, the decline in trade deficit by 23%, retainment of Emerging Market Status in MSCI Semi Annual Index Review and increase in the Large Scale Manufacturing Industries (LSMI) index by 4.81% during July- September FY21.
Moreover, another development responsible for rallying in domestic equities was Current Account Surplus for the fourth consecutive month in October. This coupled with ECC’s direction to prepare a proposal for clearing Petroleum Division’s Circular debt of over Rs 1020 billion within a month and the Asian Development Bank (ADB)’s intention to provide $10 billion in fresh assistance for various development and policy based projects, provided a major dose of hope for economic recovery.
Investors’ confidence bolstered further on the back of increase in Foreign Direct Investment (FDI) by 151% YoY in October, the appreciation of PKR against Dollar and inflow of Workers’ Remittances which remained over $2 billion for the fifth consecutive month in October.
Accordingly, the benchmark index recovered nearly 1,181 points during the said month and closed at the 41,068-mark, up by 2.96% as compared to the previous month’s closing.
Sector-wise, Oil & Gas Exploration Companies, Commercial Banks, Technology & Communication, Chemical and Textile Composite emerged as the best-performing sectors during the month, as they contributed around 517, 444, 331, 64, and 51 points respectively to the benchmark index. To be specific, the scrips of POL (+228), TRG (+218), PPL (+129), UBL (+121), and SYS (+113) turned out to be the most pleasing ones.
On the other hand, investors remained cautious in the Cement sector, as a result, the sector emerged as the worst performing sector during the month, despite the historical high sales recorded in the month of Oct’20, the raid by the CCP has slumped investors’ return by 3% MoM. According to Shajar Capital, during Nov’20, the scrips of LUCK, DGKC, PIOC, ACPL and MLCF down by 2.53% MoM, 3% MoM, 1% MoM, 4% MoM and 6% MoM respectively compared to Oct’20.
During the month, 55 companies traded in green while 44 landed in the red zone. The All-Share Market Cap increased by nearly USD 1.2 billion, i.e. 2.6% higher than the previous month. However, in terms of PKR, the All-Share Market Cap surged by Rs. 153.88 billion i.e. 2.08% higher as compared to the last month.
Figures released by NCCPL showed that foreign investors sold net USD 48.47 million worth of stocks during the month with foreign corporates doing the bulk of selling @ USD 51.48 million. On the local front, Individual investors purchased USD 33.75 million worth of stocks, followed by USD 12.65 million and USD 10.9 million worth of stocks bought by Local Companies and Insurance Companies respectively. Other significant transactions included USD 10.89 million and USD 3.42 million worth of stocks sold by Mutual Funds and Proprietary Brokers respectively.
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