Weekly Market Roundup

January 5, 2020 (MLN): Though the trading at the stock exchange remained volatile throughout the week, the KSE-100 index still managed to gain around 1,474 points by the end of it.

The index opened on a positive note, gaining 800 points in the first session before losing 393 points in the next three sessions. However, the table turned around quickly on Thursday wherein the benchmark index marked a gain of 1,080 points.

Going by the analysis of AKD Research, the investors’ sentiments were boosted by a number of economic and political factors, including CPI numbers which clearly met the market expectations, rise in the foreign reserves and introduction of Army Act in the national assembly.

Commercial Banks, E&P Companies and Power Generation & Distribution emerged as the top gainers during the week, as they added 653 points to the index.

Moreover, All-share market cap increased by USD 1.3 billion i.e. 2.49% during the week.

Foreign investors were net sellers by USD 7.29 million during the week, as per the data maintained by NCCPL, with foreign corporates doing the bulk of the selling.

Within local investors, Mutual Funds and Banks/DFIs were the main buyers with USD 8.64 and 4.17 million, while Companies and Broker Proprietary Trading were net sellers at USD 2.3 million and USD 853.4 thousand.

Forex Update:

PKR reversed its losses from the previous week to gain 13 paisa against the Dollar in the interbank market.

The Pak Rupee ended at 154.89 compared to 155.03 from the previous week.

While the local currency depreciated overall by 11.51 percent in CY19, in the last six months of CY19 it has appreciated by 3.25 percent. 10 day annualized volatility has increased from 0.48 percent a few weeks ago to 0.74 percent.

During the week the dollar touched an intraday high (bid) of 155 and a low (ask) of 154.85.

Fixed Income Update:

After rounding out an exciting year in 2019, Yields for short and long term treasuries have displayed relative stability.

An auction conducted in the outgoing week witnessed the cut off yields remaining static, as a consequence yields  in the secondary market were largely unchanged remaining within 5 bps of previous week.

With the average inflation for FY20 climbing over 11 percent and rising oil prices, courtesy of fresh madness in the Middle East, decline in interest rates might be a pipe dream in the short term. However, the PIB auction scheduled for the coming week should provide some insight into the central bank’s thinking.

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