Bullish trend continues for third week of Sept; KSE-100 index up 2% wow
The bullish trend continued in the third week of September with 2% WoW improvement in the Index. During three weeks of September KSE-100 Index gained 8% WoW or adding 2439 to the index.
The gone-by week signal some positive indicators for the economy. State Bank of Pakistan on Monday holds policy rate steady at 13.25 percent pointing to stable inflation. Monetary Policy Committee (MPC) forecasts inflation to come down in target range of 5-7 percent in next two years.
During the week the KSE-100 Index gained 629 points to cross 32,000 level to close at 32,111.10. The average volume during the week declined to 123 million and market capitalization improved by Rs.85 billion to close at Rs.397 trillion
On Monday due to weekend attack on Saudi oil installation the oil prices jumped and oil stocks help index gain 447 points to close KSE-100 Index at 31928.55. Exploration and production alone contributed 225 points with PPL, OGDC and POL hitting their upper circuit.
On Tuesday the Index could not keep their upward trend and close flat losing 19.63 points to close at 31,908.92. The further fall in Index was supported by banking sector due to unchanged monetary policy rate by SBP.
On slippage of oil prices in international market on Wednesday all four oil stocks OGDC, POL, PPL and Mari petroleum turned red. Stocks fall 353 points on profit-taking. The Index closed at 31,555.47.
The investors started taking interest on Thursday in banks, fertilisers, exploration and production and got massive gains of 628.56 points to close at 32,184.03.
It was volatile day on Friday when the Index kept swinging between high of 32,332 and low of 32,055 to finally close at 32,111.10. The average volume touched highest of the week of 153 million shares. The foreigners and individual remained buyers with $1.57m and $2.13m respectively.
On average shares of 354 companies were traded. Of these 172 were gainers and 162 were loser and 20 remained unchanged.
Foreigners were net buyer $7.75m during the week; companies were seller by $1.94m, Banks were buyer $1.25m; Mutual fund net seller $6.77m and individuals net buyer $6.72m.
Volume leaders during the week were: Maple Leaf 35m; K-Electric & Pak Elektron 26m each; Lottee Chemical 23m; TRG Pak 20m; Pak Int’l Bulk 15m; D G K Cement 14m; Oil & Gas Development, Hascol Petrol & Unity Foods 12m each and World Call Telecom 10m.
– The country’s current account deficit (CAD) narrowed by massive 54.66 percent to $1.3 billion, or 2.8% of GDP during the July-August period of FY20 as the overall economic slowdown sapped imports. CAD down by 14,22 percent year-on-year to $641 million in August against $720m in the same month last year.
– Foreign exchange reserves held by the State Bank of Pakistan increased by $138 million to $8.6 billion as on Thursday with total reserves rising to $15.9 billion.
– The Central Bank in its latest Pakistan Investment Bond (PIB ) auction raised Rs.274 billion in the three, 5 and ten years instruments. The auction saw cut-off yields declines in all tenure after the SBP held its policy rate steady at 13.25 percent in its monetary policy on Monday.
– The Indus Motor Company has decided to shut down all production for the remaining days of September bringing the number of ‘non-production days’ to 15 in the month due to continuing fall in demand.
– Around three million barrels per day of Saudi oil will remain offline for a month, about half the production halted by the week end’s devastating attacks on key crude facilities
– Bikes sales skid as economic slowdown bites. The country’s total bike production fell by 13 percent to 2.459 million units in FY19 from 2.825 million units in FY18.
Technically in case of gain the likely target could be 33,106. Any down side will find support at the 50-DMA at 31,620. A fall below cause the down trend to resume with 30,734. The RSI and the MACD has improved, supporting a positive view.