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Increased investors participation led KSE-100 gains 1.6pc wow
Summary

Due to long Eidul Fitr holidays there was no trading in Pakistan Stock Exchange (PSX) from May 7 till May 16. It was a high participation with investors’ confidence in the PSX during the week. While it was barely an average volume of 242 million in the previous working week, the volume this week climbed to average 609m shares. Positive indicators this week, which led the KSE-100 Index, added 740.31 points to close at 45,914.98 on Friday. These positive indicators include favorable review in the MSCI; decline in Covid-19 cases, 8.61 percent; optimistic GDP growth between 3 to 4 percent for FY21; high remittance $2.778 billion in April; automobile sales in Pakistan increased 54 percent in 10 months; stable T-Bills auction interest offered rates and first IPP installments payments.

During the week the Index closed higher 1.6% WoW with average volume of 609 billion and the market capitalization increased by Rs85 billion to stand at Rs.7.962 trillion.

On Monday, the KSE-100 Index surged by 621.64 point improving trading activity significantly to 437.449 million shares as compared to 245.642 million shares. This rally was caused by positive MSCI review. Lucky Cement upgraded to EM Standard Index from Small Cap Index.

On Tuesday, the stocks remained bullish and added 185.51 points to close at 45,981.82. The Index crossed 46,000 psychological level but could not sustain due to profit-taking.

On Wednesday, the KSE-100 Index declined by 299.71 points on political uncertainty and closed at 45,682.11. K-Electric was the volume leader with 65.42m shares. Wyeth Pak was the top gainer by Rs.96.31, Abraaj Group sold around 523 million shares.

On Thursday, the stocks kept on declining as KSE-100 Index shed 108.04 points to close at 45,574.07. Another 120 shares of Abraaj were sold.

On Friday, the Index gained 340.81 points to close at 45,914.98. The volume declined to 710m shares from 784m on previous day. The coming week is a rollover week and the monetary policy is on May 28.

Participants/Activity

Foreigners were net seller of $45.724m shares during the week; companies were buyer $18.07m, Banks were seller 3.30m, Mutual fund net seller $0.76m, individuals net buyer $37.22m and Insurance were seller $4.23m.

Volume leaders during the were: World Call Tel 342m; K-Electric 191m; Byco Petroleum 188m; Hascol Petroleum 153m; Unity Foods 110 m; Telecard 100 m; Ghani Global 83m; PIBTL 46m; Summit Bank 38m and TRG Pak 29m.

Triggers

– A big chunk of 523 million shares in Byco Petroleum in Pakistan Ltd was sold on Wednesday by IGCF Oil & Gas Ltd previously called Abraaj Mauritius.

– Wyeth Pakistan announces share buyback. Wyeth Pakistan Limited informed Pakistan Stock Exchange on Tuesday that the parent company ,Wyeth LLC, USA resolved to consider to purchase of shares from all minority security holders in order to de-list the company .

— The country’s overall foreign exchange reserves increased by $168 million during the week ended on May 7. The SBP reserves increased by $177m to $15.774 billion and commercial banks holdings decreased by $9m during the week.

— Amid rising construction activities, increased in the prices by Rs.5000 per ton to Rs.142,500 to 143,500 per ton.

— Backed by low interest rates, total car sales rose to 126,679 units 10MFY21, jeep sales grow 193 percent; tractors sales up 62 percent.

Conclusion

Pakistan Stock Exchange has presented important budgetary proposals for 2021-22 to boost economic growth and address key structural imbalances in Pakistan’s economy.

The core principle of 14 proposals by PSX is to increase the size and depth of the capital market by incentivizing new listings and increasing the investors’ base without impacting government revenues. All the proposals essentially focus on impediments and disincentives that are negatively impacting the developments of the capital market as well as the documented corporate sector.

Raees Uddin Khan,
Research & Development Institute of Securities Management Research& Training (Pvt) Ltd.
Karachi: Dated May 21, 2021

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