The outgoing week saw uplift in sentiments from previous week amid encouraging newsflow on the economic front. The week kicked off on a positive note with Monetary Policy Committee (MPC) announcement of status quo on Policy Rate and decline in Current Account Deficit (CAD) by 55% for 2MFY20, and increase in forex reserves by USD146mn on weekly basis. Moreover, the routine IMF delegation visit remained the center of attention for investors that expressed satisfaction over progress of set targets.
These developments buoyed investor sentiments and drove the KSE100 index up by 630pts, or 2.0%, WoW to close at 32,111 index level.
Overall participation during the week saw ADT clock in at 121mn shares (down 7% WoW) and ADTV was recorded at USD33mn (down 13% WoW). Major activity was driven by foreign investors who accumulated equities worth USD6.2mn during the week (four days). On the local front, outflows of USD7.7mn and USD5.3mn were witnessed from insurance and mutual funds, while individuals emerged as net buyers worth USD4.6mn.
With major macroeconomic concerns likely to be addressed to a larger extent, we expect market volumes to pick up going forward. Commencement of futures roll over week may exert pressure on the market going forward, in our view. Notable developments from the upcoming week are likely to be PM Khan’s ongoing visit to Kingdom of Saudi Arabia followed by scheduled meeting with President Trump in U.S that may play a vital role in Kashmir Issue and FATF. Also, today’s Rights Share announcement by Maple Leaf Cement and possibly other highly levered companies in future can serve as a dampener to the market. We continue to see deep value in the market with our top picks OGDC, PPL, MCB, UBL, EFERT, LUCK, NML, LOTCHEM, and HUBC. (Courtesy- BMA Capital Management Ltd.)