September 22, 2019 (MLN): The KSE-100 index gained approximately 629 points over the week and concluded at 32,111-mark, i.e. up by 2.00%.

Trading at stock markets in the first session of the week started off on a positive note, and then eventually saw a downturn in the next two sessions. Nonetheless, the market bounced back after the PIB auctions, as investors quickly started switching towards equity instruments following a decline in the market yields of government securities.

Oil and Gas Exploration Companies, Commercial Banks, Oil and Gas Marketing Companies, Fertilizer as well as Pharmaceuticals sector helped the index gain momentum, as they collectively contributed 565 points to it. In particular, the scrips of PPL, HBL, UBL, OGDC and ENGRO collectively contributed 368 points to the benchmark index.

Meanwhile, the KSE All Share Market Cap rose by Rs.84.5 billion or 1.34% over the week, being recorded at Rs.6.39 trillion compared to a Market Cap of Rs.6.31 trillion recorded last week.

This week, the local investors sold securities worth of Rs.35.7 billion, amongst which, Individual investors emerged as the largest net sellers as they sold securities worth Rs.22.2 billion. This resulted in an overall net selling of Rs.1.2 billion over the week.

Forex summary

The Pakistani Rupee (PKR) gained 11 paisa against US Dollar (USD) during the week, and closed at 156.07 per USD, against last week’s closing of 156.19 per USD.

This is the fifth consecutive week in which PKR has appreciated against the dollar. The local currency has gained Rs.2.87 per dollar since August 16, 2019, when it last showed a weekly decline.

Visibly, PKR is trading at its highest value since it hit an all-time low of 164.05 on June 27, 2019, and has gained Rs.7.97 since then, which has resulted in the value of Pakistan’s total external debt coming down by Rs.847 Billion.

Fixed Income summary

Bond yields decreased further during the week, following the bond auction on Wednesday wherein PIB yields fell by 14 basis points for 3Y, 30 basis points for 5Y and 38 basis points for 10 years as compared to the yields from Friday Sep 13, 2019.

Since the start of the quarter, yields have decreased by 122 basis points for 3Y PIBs, 174 basis points for 5Y and 171 basis points for 10Y.

It is pertinent to note that yields have been declining since the SBP governor hinted that Inflation is expected to start declining in the second half of FY20.

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