Market Roundup
The KSE-100 index gained around 507 points during the departed week and closed at 42,530-mark i.e. nearly 1.21% percent higher than the closing of the previous week.
According to a research note by AKD Securities, prominent performance by banks and Cements drove the index towards further gains, as the former was trading cheaply as valuations stretched elsewhere while the latter witnessed run up as PM announced Karachi uplift package of Rs. 1.1 trillion.
‘E&P sector found its place on the other end of the spectrum as international oil price trended downwards with Saudi Arabia planning to sell at lower rates in October 2020 and cabinet ratifying CCoP’s decision to offload 7% and 10% shares of OGDC and PPL respectively, only to be partially resurrected by large gas discovery in Kalat (over 1tcf) by Pakistan Petroleum Limited (PPL)’, the report added.
Commercial Banks and Fertilizer emerged as the best performing sectors during the week, as they contributed about 327 points to the benchmark index, followed by sectors such as Cement, Power Generation, and Insurance, which combinedly contributed 190 points to the index.
Company-wise, the scrips of LUCK, ENGRO, HUBC, FFC, and SYS were the most desirable ones as they contributed 125, 77, 69, 54, and 54 points, respectively.
Figures released by NCCPL showed that foreign investors sold USD 4.39 million worth of stocks during the week with foreign corporates doing the bulk of selling.
On the local front, individual investors purchased USD 22.84 million worth of stocks, followed by USD 8.5 million worth of stocks bought by Mutual Funds. Other significant transactions included USD 16.7 worth of stocks sold by local companies.
Forex:
PKR ended the week down 20 paisa to the USD in the interbank ending its two-week run of gains.
The dollar traded in a range of 80 paisa, being quoted at a high of 166.5 (Bid) and a low of 165.75 (Ask) as 10-day volatility decreased from 4.76% to 4.65%.
The Dollar ended the week at 165.9705 compared to 165.7685 a week ago.
Data released by the SBP showed that Pakistan’s Forex reserves increased by USD 118.50 Million or 0.6% and the total liquid foreign reserves held by the country stood at USD 19,961.30 Million on Sep 04, 2020.
SCRA data released by the SBP showed no inflows or outflows from MTBs & PIBs during the first 10 days of September.
The SBP is likely to release the remittances data for August sometime this week.
Money Market
Secondary market yields remained placid following the MTB auction in which the cut off yields remained largely unchanged.
Yields across all tenors remained in a range of -3 to +3 bps of the previous week. Another reason for the yields remaining stable might be the market expectation of the upcoming monetary policy decision. While SBP has not as yet announced the date for the MPC meeting, it is expected to happen in September.
Furthermore, the SBP conducted an open market operation on Friday in which it injected Rs.1.0 trillion for 7 days.
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