Market Roundup

The KSE-100 index gained around 411 points during the week and closed 32,033-mark i.e. nearly 1.30% percent higher than the closing of the previous week.

The benchmark index started the week on an optimistic note after the Prime Minister announced a package for the construction industry. However, this positivity was short-lived as projections put forth by Asian Development Bank and World Bank for Pakistan’s economy, coupled with the rise in the domestic cases of COVID-19 turned the sentiments of investors negative.

Nonetheless, the increase in crude oil prices due to agreement over a significant cut in oil production by OPEC+ once again lifted the market sentiments. The extension given to Pakistan by the FATF for compliance with the outstanding conditions also played a positive role in the market’s performance.

E&P Companies made the highest gain of 125 points during the week, followed by Cement and Insurance Sectors, which gained nearly 75 and 71 points respectively.  Within these sectors, OGDC, BAFL, HUBC, FFC, and DGKC made gains of 118 pts, 52 pts, 51 pts, 42 pts, and 40 pts respectively.

Figures released by NCCPL showed that foreign investors dumped USD 16.2 million worth of stocks during the week with foreign corporates doing the bulk of the selling.

On the local front, Individual investors picked up USD 9.3 million worth of stocks, followed by USD 5 million and USD 3 million of stocks purchased by Insurance companies, and Banks/DFIs respectively.

Forex Roundup

PKR registered its lowest close in history on Tuesday as it weakened to 167.8975 per dollar. However, last month the currency traded at a low of 169.5 and was quoted even lower at 170.50 in the interbank.

The rupee was less volatile trading in a range of 1.55 rupees touching a low of 167.95 and a high of 166.40 with 10-day volatility falling from 14.29 percent to 4.20%.

The rupee regained some of its value after news that the IMF will approve USD 1.4 billion for Pakistan next week along with SBP allowing exchange companies to resume operations as well as a slight slowdown in the outflow of hot money.

Fixed Income Roundup

Yields in the secondary market continued to decline following the MTB auction in which cut of yields came down by 40, 100 and 122 basis points for 3, 6 and 12 months.

This was the first auction since the SBP cut the policy rate by 150 basis points.

Yields for 3, 5 and 10-year PIBs came down by 40, 31 and 34 basis points.

SPI numbers released by the PBS showed yearly inflation declining to 8.20 percent from 20.02 percent on January 16, 2020.

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