February 5, 2020 (MLN): The KSE-100 index gained around 895 points during the month of January and concluded at 41,630-level, nearly 2.2% higher than the previous month’s close of 40,735 points. By posting another gain for the month, the benchmark index has successfully scored a hat-trick.
Looking at the overall performance from an eagle’s point of view, it seems that the total gains could have been higher than the current level, had it not been for the last few sessions where the index witnessed an unsolicited bearish spell.
The first three weeks proved to be highly endearing for the benchmark index, as several economic factors, such as inflow of foreign funds via investment in T-bills, stability in PKR-USD exchange rate, curtailment of Current Account Deficit and enhancement in SBP’s foreign reserves, helped reach the index touch an altitude of over 43,000 points.
The mounting tension between the United States and Iran, after the former assassinated a top Iranian official, had dented the well-being of the index temporarily, as it was seen as an opportunity by investors to indulge in profit-taking.
The situation worsened after Iran after launched missile attacks on US targets in Iraq in retaliation to the killing of its top general. While this entire political turmoil generated uncertainty on the trading floors, the situation quickly recuperated after the US announced that it had no plans to further escalate the tensions.
As mentioned before, the last few sessions of the month, especially the last week, turned out to be a grave disappointment as the index was exposed to persistent profit-taking. The negative sentimentalities emanating from the MPC announcement as well as the result of CPI figures led to the benchmark index falling below the 42,000-mark.
The sectors that contributed maximum points to the index included Commercial Banks (+529 pts) and Cement Sector (+184 pts). On the contrary, the sectors that swiped the index off by highest points included Tobacco Sector (-101 pts) and Fertilizer Sector (-49 pts).
Speaking of the Fertilizer Sector, the benchmark index was subjected to volatility because of the policies proposed in relation to this sector. The Government, in a quest to provide relief to farmers in the form of reduced urea prices, decided to remove the GIDC from the Fertilizer sector, which in turn impacted the stock prices of the companies operating in it.
Company wise, the index was lifted by LUCK (+140), HBL (+95), HUBC (+88), PPL (+81) and PSO (+76), whereas it was led down by PAKT (-94), EFERT (-76), POL (-63), OGDC (-60) and KAPCO (-28).
The KSE All Share Market Cap also witnessed a growth during the month, as it increased by $372.1 million and settled at $50.8 billion, i.e. 0.74% higher than the previous close of $50.4 billion.
Foreign investors were net buyers during the month, with the total purchase of securities by them being recorded at $2.8 million. Amongst these investors, Foreign Corporates were the largest buyers with a total purchase of securities worth $6.39 million. On the other hand, local investors were the net buyers, with Individual Investors making the largest sale at $22.7 million.
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