Weekly Market Roundup

December 19, 2021 (MLN): This week domestic equities closed up by 1.16% or 504.9 points WoW to 43,900 level.

The optimism was mainly the result of near-term outlook by the State bank of Pakistan to keep the interest rates unchanged in order to achieve the GDP growth target of 5% in FY22.

Despite the rise in interest rates by 100bps in the Dec'21 MPC meeting, domestic equities remained robust mainly on the back of a less than expected hike in benchmark rates to 9.75% for the near term. Further, this investors’-oriented hike in interest rates along with the updates on Refinery the policy has augmented ADTV by c.30% to 265mn shares compared to 204mn shares recorded in the previous week, a report by Shajar Capital cited.

From a sector-specific lens, major sectors that kept the index largely in the green zone were cement (282pts), technology (173pts), textile (71pts), engineering (70pts), and refinery (50pts). The technology sector performance was mainly the reason of TRG scrip performance which robustly increased by c.10% during the outgoing week mainly on the announcement by the group to distribute liquid assets worth USD120mn to their stakeholders. Further, the news about starting projects worth Rs11.5bn in Pakistan has also induced market participation in AVN by 8% which has boosted sector returns in the outgoing week.

Whereas, sectors which contributed negative were commercial banks (-208pts), fertilizer (-28pts), automobile assembler (-11pts), power generation & distribution (-8pts) and sugar and allied industries (-6pts).

Scrip-wise major gainers were TRG (112pts), LUCK (155pts), MLCF (45pts), SYS (43pts) and CHCC (36pts). Meanwhile, negative contribution came from MCB (-71pts), UBL (-63pts), MEBL (-29pts), HBL (-27pts), and FFC (-26pts).

Meanwhile, the KSE All Share market cap increased by a Rs65.03billion or 0.87% over the week, being recorded at Rs7.5trillion as compared to a market cap of Rs7.45tr recorded last week.

Flow-wise, foreign investors remained net sellers during the week with an outflow of $3.45mn against an outflow of $0.98mn last week. The major selling was done by foreign corporates amounting to a net $4.38mn.

On the local side, major buying was reported by companies with a net buy of $5.13mn followed by individuals and insurance companies with $2.7mn and $1.1mn respectively. While other organizations and banks stood on the other side with net dumping of $4.04mn and $2mn, respectively.

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