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KSE-100 index posts 12pc increase in volume
Summary

The market recovered this week after the Index shed 2,077 points in early two weeks of March. The completion of Senate election last Friday with government nominees elected as Chairman and Deputy Chairman and majority in Senate gave government edge over opposition while scheduled ‘long march ‘ of PDM to Islamabad on March 26 stood postponed and government is now in majority in both Houses, which will facilitate them in legislation pushed confidence back in the market. More favours are for the market include that this is the right time for the government as they have restarted the IMF program. The week was also important for investors as on Friday March 19 Monetary policy was to be announced by the State Bank of Pakistan.

During the week the KSE-100 Index gained 1,113.23 points to close at 44,901.31. The volume increased by 12% to average 483 million shares and market capitalization increased by 154 billion to close at Rs.7.947 trillion.

On Monday, the KSE-100 Index shoot through the roof with intraday gains of 1,051 points and close up by 978.51 points to settle at 44,766.59. The investors were of the opinion that government had overpowered the opposition after winning the election of Senate Chairman and Deputy Chairman. There was profit-taking on Tuesday and Index gained 90.47 points to close at 44,857.06. The recovery in stock continued on Wednesday as KSE-100 Index gained 593.25 points to close at 45,450.31. Stocks snap four-day rally on Thursday and lost 726.22 points to close at 44,724.09 but traded up and down during the sessions and added 177.22 points to closed at 44,901.31 on Friday.

Participants/Activity

On average shares of 404 companies were traded. Of these 232 were gainers and 153 were losers and 19 remained unchanged. Foreigners were net buyer $3.02m during the week; companies were seller by $8.18m, Banks were seller $11.2m; Mutual fund net buyer $10.20m, individuals net seller $1.11m and Insurance were buyer at $8.15m.

Volume leaders during the week were: Byco Petroleum 21m; TRG Pak. 158m; K-Electric 106m; Unity Foods 104m; Pakistan Refinery 71m; Hum Network 64m; Telecard 36m; Ghani Global Holding Ltd 23m and Azgard Nine 20m.

Triggers

— Monetary Policy on Friday. A survey conducted by a brokerage house said on Tuesday that 82 percent believe that that the policy rate would remain same.

— The dollar fell 98 paisa to close at Rs.155.74 on Wednesday.

— Saudi Arabia’s Al-Jomaiah Group on Wednesday sought early resolution of payables and receivables of K-Electric and urged the government and public sector entities to facilitate the power utility’s takeover by China Shanghai Electric Ltd.

— Foreign investment plunged by 30 percent in eight months. The country received $1.3 billion in FDI during July-Feb 2020-21 compared to $1.854 billion in the same period last year.

— Textile exports fall by 3 percent in February. The export value of these sectors fell to $1.23 billion in February from $1.27 billion over the corresponding month of last year.

— Auto-financing all time high at Rs.273 billion as of Feb 28,2021 showing a jump of four percent month on month.

— Large-scale manufacturing grows by 9.13 percent in January.

— The foreign exchange reserves of SBP increased by $4 million to $13.020 billion during the week ended on March 12, scheduled banks dipped by 3m to $7,139.4m and total reserves inched up by $1m to $20.159bn.

— Pakistan non-textile exports posted 1.02 percent growth year-on-year to $6.324bn in the first eight months of FY21.

Conclusion

The Chief of Army Staff Gen Qamar Javed Bajwa on Thursday made a strong pitch for peace with India and sought the world’s help in ending the conflict between the two South Asian nuclear armed rivals. Gen Bajwa, while proposing peace with India, echoed Prime Minister Imran Khan who had at the inaugural session called for resolving the outstanding disputes through dialogue and establishing ‘civilized neighbours‘ like relations.

Commerce Ministry said on same day that summary on import of cotton from India is under process. This is a remarkable economic development for Pakistan’s economy. In 2006-07, Pakistan’s total cotton production was 13 million bales, which has declined to 7.7 million bales in 2020-21. National Assembly Standing Committee on Commerce was apprised that the summary for import of cotton from India through land route in June is ready.

Raees Uddin Khan,
Research & Development Institute of Securities Management Research& Training (Pvt) Ltd, Karachi.
Dated: March 19, 2021

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