Stock market sustains 43,000 level

Lahore          -       The weekly performance of stock exchange remained largely subdued. The news flow also slowed down which was evident from the lower volumes. The market rested at 43,167 points slightly negative by 0.1 percent or 39 points. Some positives during the week on macro front included Fitch affirming Pakistan at ‘B-’ with stable outlook and increase in FDI by 68.3 percent in Jul-Dec19 but both failed to provide the impetus to continue momentum from previous weeks. Furthermore on last session of week, foreign investment in T-bills recorded largest single day inflow of $536.1 million taking total net foreign investment in T-bills and PIBs to $2.26 billion in FY20 which bodes well in terms of Forex reserves. Based on NCCPL data, foreigners were net buyer of $2.81 million. On the local side, Banks were net buyer of $2.3 million and Mutual Funds were net seller of $1.7 million. Stock market experts said that the KSE took a breather in the outgoing week as investors likely opted to consolidate their positions in light of the rally. The market settled above the psychological level of 43,000 points. The uneventful week saw remittances recording at $11.4 billion for 1HFY20, up 3% YoY and forex reserves reaching $18.1 billion. Major sector news flow included release of automobile numbers for Dec 2019 where car sales declined by 43% in 1HFY20 as compared to 1HFY19 same period last year where the only notable improvement was for PSMC, which posted an increase of 49%MoM. Engro Polymer and Chemicals Limited (EPCL) notified issuance of preference shares amounting to Rs3 billion in order to finance ongoing expansion of PVC to 100K MT and VCM bottlenecking project to maintain favourable debt to equity ratio. Foreigners remained buyers during the week with net inflow of $3.5 million (four days) concentrated in E&Ps and Banks with net buy worth $1.8 million and $1.4mn, respectively. On the local front, individuals and insurance offloaded equities worth $3.2 million and $2.8 million, respectively while Banks and Brokers were net buyers with inflows of $2.1 million and $1.6 million, respectively.

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