Monthly Review: KSE-100 Index kicks off FY21 on a promising note

Aug 3, 2020 (MLN): After the muted activity in June, the capital markets of Pakistan rebounded sharply during the first month of the fiscal year 2020-21, July, on an account of policy cut by SBP to 7 % on 25^th June that helped investors improved their earnings, and increased liquidity due to the shifting of the flow of funds from money market to the equity market.

The KSE-100 index gained approximately 4,837 points during the month and settled at 39,258-level, i.e. 14.05% higher than the close of the previous month.

Meanwhile, it is worth highlighting that it has been the highest return in the month of July in the past 17 years.

According to the market analysts, besides the abovementioned factors, several other measures and economic developments drove the stock markets, such as the jump in SBP’s reserves (with inflows from multilateral institutions) reversing the PKR-USD parity to 166/USD level from PKR 168/USD Jun’20 closing, business-friendly policies doled out by the govt, and a noticeable drop in COVID-19 cases.

During the period under review, the sectors that contributed the most during the first month of FY21 include Commercial Banks, Cement, E&P Companies, Automobile Assembler and Fertilizer as they commutatively added 3,118 points to the index.

Commercial Banks led the index, as it made the highest contribution of 1283 points amid the positive result expectation for the 2QCY20. This was followed by the Cement sector with the gain of 722 points on the back of improved earnings with the help of lower financial charges.

Company-wise, the scrips of HBL, LUCK, TRG, PPL and BAHL generated the maximum returns as they contributed 421, 347, 200, 190 and 184 points, respectively to the index.  On the contrary, the shares of ABOT, PSEL, ARPL, Nestle and JDWS took away 16, 8, 6, 5 and 4 points, respectively.

The figures released by NCCPL showed that the local bourse continued to absorb foreign selling at $68.27 million during the month, with Foreign Corporates doing the bulk of the selling.

On the local front, Insurance Companies did the maximum buying as it picked stocks worth $33.87 million, followed by Companies, Individuals, Mutual Funds with an accumulation of $19.8 1million, $17.24, and $14.98 million respectively.

The KSE All Share Market Cap rose by $4.82 billion, from $38.85 billion to $43.68 billion, depicting an increase of 12.42%.

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