Dec 29, 2019 (MLN): The forex and equity market experienced bouts of volatility during the outgoing week while the yields in the fixed income market remained relatively stable.
Equity Round Up:
Trading at the stock exchange remained volatile throughout the week with the KSE100 index ending with a meagre gain of 15.54 points.
The index opened on a negative note, losing 825 points in the first session before gaining 1,120 points in the next two sessions, however it lost 280 points in the final session to pare its gains.
The index traded in a range of 1,834 points or 4.5 percent of previous weeks close touching a weekly high of 41,289 points (+456 or 1.12%) and a low of 39,454 (-1,378 or -3.4%).
The negative sentiment in the market was attributed by Topline security to political uncertainty and start of the rollover week however, AKD research pointed out, PPL’s discovery reversed the market sentiment the following day.
According to AKD research other major news affecting market sentiment included “US resuming military training for Pakistan to improve ties, FATF response to Pakistan progress report received, Cost audit of fertilizer industry planned, outdated refineries seeking protection to keep running, and CCI approval of incentives for oil, gas exploration”.
Spectrum research noted that after witnessing panic selling from the investors early in the week the market started to recover due to some positive outcomes from the IMF review. In the IMF report, it was highlighted that some expected misfortunes could occur in 2020 like fiscal slippage and further currency devaluation. This can create further pressure on the economy.
Commercial Banks and Power Generation & Distribution emerged as the top gainers during the week adding 85 points to the index while Investment Bank & Investment Companies, Insurance and tobacco companies in removed 105 points from the index.
All share market cap decreased by USD 200 million during the week while average daily volume decreased from 297 to 229 million shares.
Foreign investors were net sellers by USD 2.903 million during the week, NCCPL data showed, with foreign corporates doing the bulk of the selling.
In local investors, Insurance Companies and Mutual Funds were the main buyers with USD 10.54 and 7.17 million, while Banks /DFIs and Broker Proprietary Trading were net sellers at USD 12.05 and USD 6.3 million.
Forex Round up:
PKR’s run of 11 consecutive weeks of gains ended as the Rupee lost 13 paisa against the USD in the interbank market. While remaining relatively stable during the early part of the week, the Rupee came under pressure in the last 2 sessions as end of the year payments resulted in a greater demand for dollars. According to traders, Dollar was traded as high as 155.50 during Friday’s morning session before falling to 154.80 towards the end of the second session with trades reported at 154.82.
Fixed Income Roundup:
Yields in the secondary market remained relatively stable with short term yields for 3, 6 and 12 months increasing by 3, 4 and 3 basis points. Longer term yields for 5 and 10 years were unchanged while the 3 year PIB yield increased by 5 basis points.
Events next week
- Dec 31, 2019 – MTB Auction
- PBS: Jan 01-02, 2020 – Inflation Numbers for December
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