February 16, 2020 (MLN): The trading activity on the floor remained flat during the week as the KSE-100 index closed at 40,243 level, i.e. up by 0.25% WoW in comparison to the previous closing of 40,143 points.
According to a research report by JS Global, the 2nd review by IMF remained the focal news this week. As per news flows, mini-budget might not materialize now. On the other side, the IMF seemed to be in an unrelenting mood due to the tax revenue collection target.
Towards the latter part of the week, news about FATF started to surface, with Pakistan taking some steps to improve its chances of being included in the grey list.
During the week, Commercial banks made the highest contribution to the benchmark index with a gain of 121 points, followed by Cement and Power Generation as they contributed 64 points and 55 points respectively while sectors such as Food & Personal Care Products, Inv.Banks/Inv.Cos/Securities Cos, Oil & Gas Marketing Companies pulled the index down by a total of 110 points.
Company-wise, HBL (+91), HUBC (+83), LUCK(+45), MCB (+38) and PAKT (+26) captured the highest gains, whereas NESTLE (-52), DAWH (-29), FABL (-25), COLG (-22) and KAPCO (-18) emerged as the losers during the week.
Likewise, the All-Share Market Index declined by $1.49 million during the week, before settling at $49.06 billion.
Foreign investors were the net sellers during the week, with the total sale of securities being recorded at $11.15 million. Amongst these, Foreign Corporates emerged as the largest group of sellers as they sold securities worth $10.97 million.
On the contrary, local investors were the net buyers, with Insurance Companies that appeared as the largest buyers as they purchased securities worth $8.81 million, followed by other organizations that purchased securities amounting to $5.58 million.
Forex Roundup:
PKR appreciated the 7th successive week against the dollar, gaining 23 paisa which is the largest increase since the week ending Oct 11, 2019 concluded the week at 154.17 per USD.
PKR continued to appreciate against the Dollar on the back of higher inflows and higher demand of Rupee than its supply as per traders.
While Pak Rupee’s Real Effective Exchange Rate Index for the month of December decreased by 0.15 percent it has increased by 5.13 percent in FY20. However, the SBP has clarified “Appreciation (depreciation) of REER is confused with the concept of currency overvaluation (undervaluation) while these are two separate concepts and not necessarily interpreted in the same direction.”
On a monthly basis, PKR has appreciated against the dollar throughout FY20.
PKR’s Monthly Performance against the Dollar
Month End | USDPKR | Change | % Change | FY20 % |
|---|
Jun-19 | 160.0521 | | | |
Jul-19 | 159.5982 | 0.4539 | 0.28% | 0.28% |
Aug-19 | 156.8577 | 2.7405 | 1.72% | 2.00% |
Sep-19 | 156.3654 | 0.4923 | 0.31% | 2.30% |
Oct-19 | 155.6737 | 0.6917 | 0.44% | 2.74% |
Nov-19 | 155.2399 | 0.4338 | 0.28% | 3.01% |
Dec-19 | 154.8476 | 0.3923 | 0.25% | 3.25% |
Jan-20 | 154.4878 | 0.3598 | 0.23% | 3.48% |
Feb-20* | 154.1697 | 0.3181 | 0.21% | 3.68% |
* Current Date Feb 14, 2020
Fixed Income:
The inverted yield curve flattened slightly for the short-term instruments as the 3- and 6-month yields decreased by 13 and 5 basis points while those for 12 months increased by 17 basis points during the week.
Cut off Yield for the 12-month MTB in the auction conducted on Feb 12, 2020 went up by 39 basis points while the 3 and 6-month cut-offs were relatively unchanged.
Further, Secondary market yields for 12-month T-bills have overtaken 3 month yields for the first time since October 2019.
Regarding PIBs, no noticeable changes in the yields were observed.
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