Weekly Market Roundup

Equity:

Despite rollover week, the bullish sentiments continued at Pakistan Stock Exchange during the departed week as the benchmark KSE-100 index gained around 1,651 points or up by 4.4% WoW to close the week at 39,258 points.

According to the report by Arif Habib Limited, during the week commercial banks remained attractive on anticipation of robust results. Furthermore, three-month low COVID-19 cases were reported which improved investor sentiment. Moreover, loans worth USD 505mn received during the week with the Pak Rupee/Parity settling at PKR 166.98/USD, also kept the momentum high. Along with this, PKR 168bn were raised in Treasury bill auction, with yields going up due to postponement in SBP’s monetary policy to Sep’20.

Sector-wise, Commercial Banks emerged as the best performing sector during the week, as it contributed about 480 points to the benchmark index, followed by Cement which added 286 points to the index. The other sectors that helped in propping up the index include Power Generation and Distribution Companies, Technology and Communication and Automobile Assembler as they collectively contributed 337 points to the KSE-100 index.

Company-wise, the scrips of LUCK, HBL, BAHL, TRG and HUBC were the most desirable ones as they contributed 145, 107, 102, 96 and 81 points, respectively.

Figures released by NCCPL showed that foreign investors dumped USD 9.7 million worth of stocks during the week with foreign corporates doing the bulk of the selling.

On the local front, Mutual Funds picked up USD 11.258 million worth of stocks, followed by USD 2.195 million and USD 1.7 million worth of stocks purchased by local Companies and Individual investors respectively.

Forex:

PKR recovered 28 paisa during the course of the week, extending its gains against the dollar into the second successive week.

In the shortened trading week, PKR appreciated to Rs.166.45 by Tuesday before surrendering some of gains in the gains in the remaining sessions.

The Dollar traded in a range of Rs.1.35 touching a weekly high of 167.70 (Bid) and 166.35 (Ask) before closing at 166.9815, with the 10-day volatility increasing from 3.68% to 4.11%.

During the week SBP announced that it had received USD 505 million from the World Bank.

During the first month of FY21, PKR has appreciated by Rs.1.07 or 0.64% against the USD.

Money Market:

Secondary market yields increased for the second successive week with 3, 6 and 12-month yields going up by 33, 42 and 47 basis points, mirroring the increase in the cut off yields in the auction conducted this week.

Yields for 3, 5 and 10-year PIBs also increased by 32, 28 and 22 basis points.

The focus will be on PBS as it will announce the inflation numbers for July 2020, which should give the market some direction for interest rates.

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