Weekly Market Roundup

November 21, 2021 (MLN): This week domestic equities closed up by 1.6% or 740 points WoW to 46,489 level.

Despite uncertainty over IMF disbursements and mounting inflationary pressure, the market managed to close the week in green on account of anticipation of a higher quantum of hike in policy rate which drove the banking sector this week. After trading hours of the last session, the State Bank of Pakistan (SBP) announced a hike of 150bps, taking the policy rate to 8.75%.

Moreover, approval of payments to IPPs as the second instalment by ECC coupled with some long-awaited bills approved by a joint session of parliament also impacted investors trading strategies.

Besides, SBP strictly warned the banks to avoid unfair practices in the currency market which supported the PKR in the interbank market. Likewise, it is being anticipated that $3bn from Saudi Arabia will be credited soon, which further supported the PKR and fueled investors sentiments during the last day of trading, a closing note by Spectrum Securities cited.

However, at the same time news of harassment allegations on Zia Chisti, founder of Afiniti, dented investor sentiments during the week.

During the week, the bourse witnessed 3 sessions in favour of bears while 2 sessions ended in green territory. The average traded volume witnessed a decline of 23% WoW, while the average daily traded value slid by 17% WoW.

From a sector-specific lens, major sectors that kept the index largely in the green zone were banks (403pts), cement (158pts), fertilizer (147pts), oil & gas exploration companies (140pts), and power generation & distribution companies (43pts). Whereas, sectors which contributed negative were technology (-176pts), and FMCG (-41pts).

Scrip-wise major gainers were MEBL (96pts), LUCK (76pts), UBL (73pts), PPL (72pts) and MCB (71pts). Meanwhile, negative contribution came from TRG (-233pts), UNITY (-32pts) and PSX (-16pts)

Meanwhile, the KSE All Share market cap increased by a Rs125.8billion or 1.61% over the week, being recorded at Rs7.9trillion as compared to a market cap of Rs7.8tr recorded last week.

Flow-wise, foreign investors remained net sellers during the week with an outflow of $25mn against an outflow of $5.28mn last week. The major selling was done by foreign corporates amounting to a net $26.7mn. Sector-wise, major selling was witnessed in commercial banks ($4.7mn) and fertilizer ($4.7mn).

On the local side, major buying was reported by insurance companies with a net buy of $13.5mn followed by companies and mutual funds with $7.7mn and $6.2mn respectively. While banks and individuals stood on the other side with the net sell of $3.5mn and $2mn respectively.

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