KSE-100 index springs back 2.7% wow on positive macros and better corporate results
Pakistan had presented the case on October 13-14, last week and this week plenary meeting of FATF (Financial Action Task Force) took place from October 21-23 to decide Pakistan’s status on Friday around 7 pm PST. ‘Hopefully Pakistan would remain on grey list’ disclosed a senior official of the Finance Ministry. As such most of the uncertainty in the market regarding FATF status died down but still market has to wait for the decision at the end of the trading time on Friday.
The bullish trend in the market this week was on better corporate results, consistent improvement of rupee against the dollar; C/A surplus moderated to $73m in September; sizeable growth of 68 percent in foreign direct investment month-on-month in September. The market also discounted the political noise as something representing more of sound and fury with no negative outcome for the government.
During the week, KSE-100 index gained back 1102 points and crossed 41,000 level to close on Friday at 41,266. The market participants improved by 57 percent to average volume at 466m. The market capitalization increased by Rs.159 billion to close at Rs.7.647 trillion.
On Monday, there was bullish trend. At the end of the day Index was up by 176.15 to close at 40,340.17. Fertilizer off-take numbers helped the sector to take lead among gaining sector.
Stocks rallied 616 points as positive corporate results unveiled by banks, oil and gas, fertilizers and steel companies on Tuesday. KSE-100 Index gained 616.41 points to close at 40,956.56. The volume jumped to 493 million.
On Wednesday, stocks gained 579.34 points and broke 40,000 level as KSE-100 Index closed at 41,535.92. The volume also jumped further to 661 million.
There was some corrective mode on Thursday as the Index moved down by 336.90 points after three-day rally. The KSE-100 Index closed at 41,199.02. The volume declined to 500m.
There was choppy trading on Friday as investors waited for the FATF news. The volume further declined to 353 million and KSE-100 Index was range bound as it increased by 66.98 points to close at 41,266.
On average shares of 408 companies were traded. Of these 233 were gainers and 158 were losers and 17 remained unchanged.
Foreigners were net seller $6.87m during the week; companies were buyer by $4.8m, Banks were seller $7.71m; Mutual fund net seller $7.62m, Insurance buyer $1.24m and Individual seller $3.49m.
Participants: Unity Foods 281m; Pak Int’l Bulk 199m; Hascol 160m; Maple Leaf 91m; Pak Refinery 67m; Fauji Foods 62m; TRG Pak Ltd 45m; Aisha Steels 38m; Kohinoor Spinning 26m; K-Electric & Fauji Cement 21m.
– Positive corporate results witnessed: Bank Al Habib profits jump 87.3 percent; Bank Alfalah declared Rs 2 cash dividend; Mari Petroleum posts Rs.9.07 billion profit; Meezan Bank profit jumps 74 percent; Attock Petroleum PAT rises Rs.1.49 billion; Lotte Chemical earns Rs.1.04 billion.
– According to FBR 127 construction projects worth Rs.63 billion were registered under Prime Minister’s Package for construction sector.
– Pakistan, after a gap of five years posted a quarterly current account surplus of $792m during 1QFY21 against a deficit of $1.492 billion recorded in same period last fiscal year.
– Hascol Petroleum fined Rs.10m for Amangarh inferno.
– Circular debt jumps 30 percent to Rs.2.15 trillion in FY20.
– Pakistanis with foreign assets can invest in US dollar denominated Naya Pakistan Certificates by opening a Foreign Currency Value Account.
– OPEC and allied producers on Monday pledged action to boost oil prices.
Upcoming week is a rollover week and FATF decision will have its impact. The market is expected to be volatile while careful watch is required.
Raees Uddin Khan,
Research & Development Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: October 23, 2020