Weekly Market Roundup

August 16, 2020 (MLN): The KSE-100 index gained around 261 points during the departed week and closed at 40,190-mark i.e. nearly 0.65% percent higher than the closing of the previous week.

It is to be noted that this is the eighth consecutive week of positive close for the benchmark index, during which it has gained almost 6,851 points i.e. 20.49%. Moreover, the market capitalization during this time has increased by USD 6.02 billion.  

Commenting on this week’s performance, a report by Arif Habib Limited said: ‘This week trading commenced on a negative note due to profit taking which resulted in selling pressure in Cement, Steel, Automobile, and E&P sector. On Tuesday however, a rebound was witnessed at the index attributable to increase in international oil prices and prospects of consensus between Independent Power Producers and the Government of Pakistan’.

‘On the other hand, increase in fertilizer prices also increased activity in the fertilizer sector. However, honorable Supreme Court of Pakistan announced its reserved verdict on GIDC today whereby industries are required to pay PKR 457 billion which once again brought pressure on industries’, it added.

Power Generation & Distribution emerged as the best performing sector during the week, as it contributed about 265 points to the benchmark index, followed by sectors such E&P, Commercial Banks and Textile, which combinedly contributed 303 points to the index.

Company-wise, the scrips of HUBC, UBL, PPL, KAPCO and SNGP were the most desirable ones as they contributed 219, 55, 48, 40 and 35 points, respectively.

Figures released by NCCPL showed that foreign investors bought USD 8.7 million worth of stocks during the week with foreign corporates doing the bulk of the purchasing.

On the local front, Banks/DFIs sold up USD 10.74 million worth of stocks, followed by USD 5.4 million worth of stocks sold by Insurance Companies. Other significant transactions included USD 11.3 worth of stocks purchased by Individual Investors, as well as USD 6.24 million worth of stocks bought by Mutual Funds.

Forex:

The Pak Rupee recovered to close out the week just 5 paisa lower against the Dollar after closing at an all-time low on Monday.

PKR has depreciated by a further Rs.0.95 or 0.57% in august so far, closing the week at 167.9318.

Dollar traded in a range of Rs0.53 during the week touching an intraday high (bid) of 168.45 and a low (ask) of 167.92 as 10 day volatility decreased from 3.39% to 2.86%.

While no significant inflows of USD were reported by SBP, and its reserves being largely unchanged, foreign investors were net buyers of local debt instruments in the month of August so far.

Money Market:

Cut off Yields in the MTB auction went up by a tiny margin for 3, 6 and 12 months increasing by 4, 8 and 1 basis point.

However, secondary market yields were mixed with shorter term yields easing and longer term yields inching up.

Yields for 3,6 and 12 months were down by 11, 6 and 4 basis points while the 3, 5 and 10 year yields were up by 1, 6 and 13 basis points.

The SBP is scheduled to conduct multiple auctions in the coming week for PIBs and Gop Ijara Sukuks.

The SBP will issue a fresh 3 year PIB with the annual coupon rate reduced from 9% to 7% which will result in the bond being issued at a discount as 3 year yields currently stand at 8.26%.

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