September 26, 2021 (MLN): This week the benchmark KSE-100 index lost nearly 1,562 points (3.35% WoW) and closed at 45,073 level.
During the week market witnessed six consecutive bearish sessions as the meagre rise in the policy rate by 25bps after a time span of 15 months caused notable selling pressure in the benchmark KSE-100 index.
Regardless of a rise in interest rates in Sept'21 MPS, Banking Sector remained in the selling pressure which could have contributed to the Post Sept'21 MPS.
According to a report by Shajar Securities, banking sector returns were affected mainly by the Amendments in the Finance Bill'21 where SBP has imposed banking sector to lend more Advances and to improve their ADR ratio. This has caused investors to reduce portfolios in the Banking Sector.
Further, the investor sentiments dented by looming uncertainty on the macro front amid ballooning current account deficit because of rising import bills and commodity prices. Furthermore, IMF staff-level talks which may bring some fiscal consolidation, continue to deteriorate the market sentiment.
On the global front, property giant Evergrande debt woes and its spillover fears sparked a global selloff during the week.
From a sector-specific lens, negative contributions came mainly from Technology & Communication (-275pts), Cement (-196pts), Commercial Banks (-148pts), Oil & Gas Exploration Companies (-134pts), and Fertilizer (-133pts). Whereas the sectors that contributed positively included Miscellaneous (44pts), Chemical (3pts), and Real Estate Investment Trust (2pts).
Scrip-wise major laggards were TRG (-142pts), SYS (-124pts), HBL (-71pts), OGDC (-70pts), and PPL (-55pts). Whereas major gainers were PSEL (46pts), MCB (18pts), BAFL (15pts), SNGP (12pts) and ABOT (10pts).
Meanwhile, the KSE All Share Market Cap decreased by a Rs304billion or 3.74% over the week, being recorded at Rs7.83trillion as compared to a Market Cap of Rs8.13tn recorded last week.
As the Governor SBP has shown intention to take stringent action following the IMF program along with the rise in Electricity and further chances of a hike in interest rates, has caused KSE ALL share average daily trading volume plunging by 4.2% during the outgoing week to 384mn shares compared to previous week 400mn shares.
Flow-wise, foreign investors emerged as net buyers during the week with an inflow of $6.73mn against an outflow of $10.9mn last week. The major buying was done by overseas Pakistani amounting to a net $4.69mn.
On the local side, major selling was reported by Individuals ($7.54mn), companies ( $3.48mn) and brokers ($2.95mn). Other significant transactions included $5.85mn and $3.26mn worth of stocks purchased by Other Organizations and Banks / Dfi respectively.
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