–Despite Covid-related volatility, KSE-100 records an appreciation of 1.53pc in FY20
–Fertiliser, cement and pharma sectors remain top contributors to the index
KARACHI: The Pakistan Stock Exchange (PSX) closed the last session of the financial year 2019-20 (FY20) on a positive note, with the KSE-100 posting decent gains amid increased market participation.
“The market remained in the green for almost the entire session as there was a surge in volumes. However, the investors’ focus was still on marked-to-market valuation of securities,” said a report issued by Arif Habib Ltd. “Cement stocks, which performed well during the past two sessions, remained muted, while E&P stocks also lacked excitement, which coincided with international crude oil prices showing nominal price changes.”
The benchmark KSE-100 Index remained positive for most part of the session, recording its intraday high at 34,424.61 after gaining 242.81 points. It ended higher by 240.12 points at 34,421.92.
Among other indices, the KMI-30 Index gathered 27.53 points to close at 54,995.25, while the KSE All Share Index accumulated 149.48 points, settling at 24,660.31. Of the total traded shares, 146 advanced and 164 declined.
The overall market volumes appreciated from 156.67 million shares in the previous session to 223.16 million shares (+42pc). Average traded value also increased by 33pc, from $33.5 million to reach $44.7 million. Pakistan Refinery Limited Right Shares (PRLR1 -66.67pc), Sui Southern Gas Company Limited (SSGC +4.87pc) and TRG Pakistan Limited (TRG +3.56pc) led the volume chart, exchanging 40.00 million, 14.59 million and 13.74 million shares traded, respectively.
Sectors that drove the benchmark index north included banking (+163.98 points), fertilizer (+33.94 points) and food & personal care products (27.04 points). Among the companies, MCB Bank Limited (MCB +77.87 points), United Bank Limited (UBL +24.86 points) and Nestle Pakistan Limited (NESTLE +23.73 points) remained the top contributors.
Adding 2.23pc in its cumulative market capitalization, the banking sector emerged as the top gainer of the day, with MCB Bank Limited (MCB +5.49pc), Habib Bank Limited (HBL +1.05pc) and Standard Chartered Bank (Pakistan) Limited (SCBPL +2.08pc) accumulating decent gains.
As per Profit analysis, the KSE-100 Index recorded an appreciation of 1.53pc in FY20.
Prior to Covid-19, the index had earned 14.62pc returns. However, during the pandemic period, the returns entered red territory at -11pc.
The index touched its highest at 43,468.22 on January 14, 2020. However, following news of the first confirmed Covid case in Pakistan on February 25, it dropped to 27,046.71 by March 26, 2020 – the duration when lockdowns had started to be imposed.
March was the worst month of FY20 where the index dropped by a whopping 23.04pc. However, recovery in April 2020 meant the index gained 16.69pc.
As per Tahir Abbas, Head of Research at Arif Habib Ltd, “Macroeconomic concerns were largely controlled before Covid-19 outbreak, especially on the external side. Current account deficit, currency stabilization, and building up of the FX reserves gave support.”
Foreign outflow (at $279 million) continued for the fifth consecutive year, which was 22pc lower than last year. However, foreigners bought T-bills and PIBs worth $688 million.
Outflows were largely concentrated in E&P ($94 million) and commercial banks ($74 million). The two sectors are the highest weighted sectors in the KSE-100 Index, having a weight of approximately 13pc and 22pc, respectively.
“Majority of the outflow was witnessed post-Covid-19, as foreigners sold equities amounting $290 million since Feb ’20 in line with the trend witnessed in the emerging markets,” Abbas explained.
The major contributors that drove the KSE-100 Index during the year included fertiliser, with a positive contribution of 1,075 points and highest offtake in 2019. This is due to the “marginal impact of the lockdown, stable offtake post-Covid-19 and removal of GIDC,” Abbas stated.
The cement sector was next line, contributing 952 points to the index due to “government’s focus towards the construction industry, the package announced for the revival of the industry, and major initiatives with respect to the strategic projects (Diamer-Bhasha Dam, Dasu Hydro Power Project and Mohmand Dam)”.
The pharma sector was the third biggest driver of the index, with a contribution of 298 points, possibly due to rising demand following Covid-19.