Pakistan Strategy_KSE-100 index shows no sign of fatigue, (AKD Daily, Sep 02, 2020)
AKD Daily
Pakistan Strategy: KSE-100 index shows no sign of fatigue
- August’20 KSE-100 index return of 4.7%MoM marks the third consecutive month of green (19.4% FYTD), beating long term seasonality (seven of last ten Aug were negative MoM) pulling the index in positive territory on CYTD bases (1.2%) approaching levels last seen during early CY20.
- KSE-100 volumes continued to consolidate with avg. volumes during the month climbing by 16.7%MoM, while KSE-ALL avg. volumes jumped 36.7%MoM taking KSE-100’s contribution to All volumes for the month to 56.3% vs. 8MCY20 avg. of 68.0% indicating some flight to mid/small cap stocks
- Another hallmark for the month was foreign investment trend where FIPI recorded a net monthly inflow of US$6.85mn (mainly in Fertilizers and Cements), reversing what has been a 6M continuous outflow with avg. monthly outflow standing at US$60.7mn
- Within mainboard sectors, interest was fetched by OMCs (+7.7%MoM), on account of expected volumetric rebound and new policy framework limiting FX losses for the players and Power (+7.0%) on expectations of one-off payment of outstanding dues with Govt reaching agreement with some IPPs on major amendments in tariff structures.
- Market is likely to remain in bull-run in the medium run with all liquidity indicators pointing continuation of stronger activity going forward, barring any major negatives risks on the external front or second wave of COVID infections. We reiterate our positive outlook for Banks and E&Ps, where adequate risk buffers are baked into the business modes making them likely candidates to lead the markets continued ascent.
AKD Research
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