Weekly Market Roundup

Market Roundup

The KSE-100 index lost around 2,158 points during the week and closed 36,060-mark i.e. nearly 5.65% percent lower than the closing of the previous week.

AKD Securities had this to say about the performance of the stock market: “The KSE-100 index underwent gyrations largely from a trifecta of risks, including the opening salvo in global crude price war initiated by Saudi Arabia following the breakdown of OPEC+ talks, spread of COVID-19 (flagged by the WHO as a global pandemic) and US$ jumping 3.2% against the PKR”.

Commercial Banks, E&P Companies, Fertilizer and Power Generation Sectors were the major predators this week, as they collectively snatched around 1,905 points off the KSE-100 index. Within the losing sectors, PPL, ENGRO, POL, HBL and FCCL made losses of 262 pts, 173 pts, 165 pts, 162 pts and 162 pts respectively.

Figures released by NCCPL showed that foreign investors dumped USD 23 million worth of stocks during the week with foreign corporates doing the bulk of the selling.

On the local front, Insurance Companies picked up USD 25.1 million worth of stocks, followed by USD 5.9 million of stocks purchased by Banks and DFIs.

Forex Roundup:

PKR depreciated by Rs.4.73 or 3.07 percent during the course of the week as demand for dollars increased following heavy selling/maturities of T-bills held by foreign investors who began dumping risky assets worldwide.

According to data published by State Bank of Pakistan, foreign investors had withdrawn a net figure of USD 837.20 million by March 12, 2020.

According to traders, in addition to outflow via SCRA, Banks too had been buying dollars as some of them had been running short positions for some time.

10 day volatility surged from 0.64 percent to 7.55 percent as the Dollar made a weekly high (bid) of 159.10 and a low (ask) of 154.71.

However, in the second session on Friday, PKR appreciated sharply towards the end by 1.90 rupees to close at 157.00/157.40.

Fixed Income

Secondary market yields continued to decline amid hopes of a rate cut in the MPC decision to be announced on Tuesday March 17.

With the IMF recommending central banks take adequate measures to safe guard the economic wellbeing and rate cuts by US Federal Reserve, Bank of England, Reserve Bank of Australia and the Bank of Canada cutting rate twice in the space of ten days, the stage is set for monetary easing in Pakistan as well.

Softening inflation numbers, although the SPI’s yearly number went up to 12.40 percent from 11.59 percent a week ago, has fueled the expectations of a rate cut.

The MTB auction conducted during the week saw cut off yields slashed by 66, 83 and 133 basis points for 3, 6 and 12 months.

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