Markets Round-Up
The KSE-100 index gained around 798 points during the week and closed 32,831-mark i.e. nearly 2.49% percent higher than the closing of the previous week.
“Macro and policy developments remained in a state of flux, with sentiments broadly recovering, coming to a head at the tail-end of the week as foreign debt relief accompanied by the surprise 200bps policy rate decline laid the groundwork for risk-on sentiment” AKD Securities said regarding the performance of benchmark index.
Fertilizer Sector made the highest gain of 263 points during the week, followed by Cement, Investment Banks, and Pharmaceutical Companies which gained nearly 166, 155 and 128 points, respectively. Within these sectors, DAWH, FFC, ENGRO, LUCK, and SEARL made gains of 147 pts, 127 pts, 108 pts, 78 pts, and 42 pts, respectively.
Figures released by NCCPL showed that foreign investors dumped USD 14.2 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 6.8 million worth of stocks, followed by USD 4.5 million and USD 2.9 million of stocks purchased by local companies, and Individual Investors, respectively.
Forex:
PKR appreciated sharply on the final trading session of the week gaining Rs.3.3 against the dollar to close out the week at 163.5797 compared to 166.884 from the previous week.
The rupee remained relatively stable during the first 4 days closing within 15 paisa, however the final day’s appreciation was caused by IMF approving USD 1.4 billion for Pakistan to help cope with the current scenario, along with Pakistan being included in the list of countries expected to get debt repayment deferment.
10 Day volatility shot up sharply from 4.20 percent to 10.20 percent as a result of Friday’s appreciation.
Furthermore, SBP’s decision to reduce the Special Cash Reserve Requirement from 15% to 10% of total FE-25 deposits is expected to make USD 375 million available to financial institutions which would have a positive impact for the market.
Fixed Income:
State Bank of Pakistan (SBP) decision to reduces the policy rate by 200 basis points precipitated a downward revision of yields by 191, 157 and 121 basis points for 3, 6 and 12 month T-Bills and 139, 128 and 112 bps for 3, 5 and 10 years.
So far this year the SBP has cut the policy rate by 425 basis points bring it to its lowest level since October 2018.
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