Weekly Market Roundup

Market Roundup

The KSE-100 index lost around 661 points during the departed week and closed 39,621-mark i.e. nearly 1.66% percent lower than the closing of the previous week.

According to Arif Habib Limited, ‘trading commenced on a negative note given possible curtailment of returns of Independent Power Producers (IPPs) by the incumbent government, under MOUs signed over the weekend. Whereas negative bearings from the GIDC judgment of the Supreme Court on industries (Fertilizer and Cement scrips in particular) from end of last week rolled over in the outgoing week. On the flip side, Oil Marketing Companies (OMCs) rallied on the back of expected clearance of the circular debt position’.

The benchmark index was mainly let down by the performance of sectors such as Power Generation, Commercial Banks, Fertilizer, and Cement as they looted the index by 218, 165, 143, and 57 points, respectively.

Company-wise, the scrips of HUBC, ENGRO, MCB, HBL, and EFERT were the unwanted ones, as they took away 201, 104, 81, 58, and 56 points, respectively.

Figures released by NCCPL showed that foreign investors dumped USD 3.99 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 7.9 million worth of stocks, followed by USD 7.2 million worth of stocks purchased by Individual Investors.

Forex

The Pak Rupee extended it losses against the Dollar into the third straight week, losing 35 paisa and closing within 10 paisa of its all-time low.

During the month of August, the rupee has depreciated by Rs.1.30 or 0.78 percent.

10-day volatility fell to 2.04%, compared to 2.87% last week, as the dollar traded in a much narrower range of just 35 paisa, hitting a weekly high (Bid) of 168.45 and low (Ask) of 168.10 before rounding out the week at 168.2887.

The SBP revealed that Pakistan received its highest ever monthly remittances of USD 2.768 Billion during July 2020.

According to the central bank, several factors have likely supported the growth in remittances to date, including orderly exchange rate conditions and policy steps taken by the State Bank and the Federal Government under the Pakistan Remittance Initiative.

Furthermore, the SBP revealed in its weekly forex reserves update, that it had received USD 249.4 million from Asian Infrastructure Investment Bank (AIIB), however, it paid USD 151 in external debt repayment for the Government. Net result being an increase in Pakistan’s FX reserves by USD 137.20 million.

Money Market:

After rising for the recent few weeks, yields in the secondary decreased marginally for 3, 6 and 12 month by 2, 5 and 6 basis points while the 3, 5 and 10 year yields came down by 5, 16 and 25 basis points.

During the week the SBP conducted multiple auctions, however, it was unable to meet its auction targets.

In the Fixed Rate PIB auction the SBP was able to raise just Rs.44.85 billion against an auction target of Rs.140 billion, while in the GOP Ijara Sukuk (Fixed & Variable rental rate) auction the SBP managed to pick up Rs.39.40 billion against a target of Rs.50 billion.

Furthermore, Commercial Banks borrowing increased during the week as the SBP injected Rs.1,226.80 billion for 7 Days on Friday compared to Rs.1,214.90 it had injected on Monday for 4 days.

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