Pkrevenue.com

Category: Stock & Commodity

  • Stock market gains 503 points on buying activity

    Stock market gains 503 points on buying activity

    KARACHI: The stock market gained 503 points on Wednesday amid buying was witnessed across the board.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,153 points as against 44,650 points showing an increase of 503 points.

    Analysts at Arif Habib Limited said that buying activity was observed across the board with E&P and O&GMCs rebounding strongly and supported by Cement and Fertilizer sectors, which showed good progress yesterday as well.

    International crude oil prices jumped significantly on the conclusion of agreement among OPEC+ countries that became the reason for performance of E&P stocks.

    Cement sector leaped on the expectation of an increase in cement price / bag in North region.

    Banking sector also contributed on the anticipation of annual results. Among scrips, BYCO led the table with 97.5 million shares, followed by PRL (87.2 million) and KAPCO (31 million).

    Sectors contributing to the performance include Banks (+118 points), E&P (+101 points), Cement (+62 points), Inv Banks (+59 points) and O&GMCs (+30 points).

    Volumes increased from 582.3 million shares to 664.5 million shares (+14 percent DoD). Average traded value increased by 2 percent to reach US$ 154 million as against US$ 151.2 million.

    Stocks that contributed significantly to the volumes include BYCO, PRL, KAPCO, HASCOL and HUMNL, which formed 41 percent of total volumes.

    Stocks that contributed positively to the index include MEBL (+63 points), DAWH (+54 points), POL (+48 points), LUCK (+37 points) and PAKT (+29 points). Stocks that contributed negatively include HUBC (-23 points), HGFA (-4 points), SCBPL (-3 points), AICL (-3 points) and SRVI (-2 points).

  • PSX introduces regulatory fee to cover costs of stock exchange

    PSX introduces regulatory fee to cover costs of stock exchange

    KARACHI: Pakistan Stock Exchange (PSX) on Tuesday proposed to levy regulatory fee to cover costs of the stock exchange including need to increase marketing and investor awareness programs.

    The proposed amount of regulatory fee is kept equivalent to the difference of Centralized Customers Protection Compensation Fund (CCPF) Levy presently charged and proposed reduced rate of CCPF Levy so that the brokers end up paying the same amount of levy on their traded value.

    The PSX further said that the proposed fee to be charged to TRE Certificate Holders on the basis of per Rs100,000 value of trade would be equivalent to the amount by which the existing levy is proposed to be reduced under the another proposal of reduction in rate of levy collected from TRE certificate holders based on the value of securities traded at PSX and contributed in CCPF.

    “This effectively means that the TRE Certificate Holders would continue to pay same amount of levy per Rs100,000 value of trade as is presently applicable at the rates specified in Schedule – I of Chapter 24 of PSX Regulations.

    The only change PSX is proposing that such collected levy should be bifurcated into two categories i.e. one for CCPF contribution at Re0.01 and the remaining to be retained by PSX as a regulatory fee for meeting regulatory expenses as:

    (i) Regulatory Fee for Ready Market: 0.67084 – 0.01 = 0.66084 per 100,000 trade value.

    (ii) Regulatory Fee for other Markets: 0.93809 – 0.01 = 0.92809 per 100,000 trade value.

    The PSX made another proposal for reduction in rate of levy collected from the certificate holders based on the value of securities traded at PSX and contributed in CCPF:

    Presently, all TRE Certificate Holders are required to contribute in CCPF at the following rates specified in Schedule-I of Chapter 24 of PSX Regulations:

    TABLE

     Market NameRate in Pak Rupee [Per 100,000 value of trade]
    Ready Market Trade0.67084
    Odd Lots Market Trade0.93809
    Deliverable Futures Contract Market- contract0.93809
    Cash-Settled Futures Contract Market-contract0.93809
    Stock Index Futures Contract Market-contract0.93809
    Squaring-Up Market-trade0.93809
    Negotiated Deals Market- transactionNil
    Debt Market – TradesNil

     PSX is proposing to reduce the rate of levy collected from TRE Certificate Holders as a contribution to CCPF to PKR 0.01 per PKR 100,000 value of trade executed in different markets as mentioned above based on the following reasons:

    1. The CCPF has attained adequate size at the current level. As of audited statements of June 30, 2020, size of CCPF is PKR 3,985,384,043. Even with reduced rates of levy collected from TRE Certificate Holders, CCPF will continue to grow further with the support of earnings of treasury income on invested assets of CCPF;

    2. The size of CCPF has grown faster as compared to the actuarial assessment due to the following factors:

    (i) Lesser utilization of CCPF due to lower cases of defaults in recent past;

    (ii) No outflow is made from CCPF on account of Management Fee;

    (iii) Expected increase in treasury income due to anticipation of better interest rates; and

    (iv) The current size of CCPF, which is over PKR 4 billion, is sustainable at its current level. This allows lesser contribution from TRE Certificate Holders.

    In order to give effect to the above proposals, PSX is proposing to make the following regulatory amendments, which are attached herewith as Annexure A in a comparative format.

     Proposal (A) requires amendments to Schedule 1 of Chapter 24 of PSX Regulations whereby the existing rates of levy for different markets are proposed to be reduced to PKR 0.01 per PKR 100,000 value traded.

     Proposal (B) requires amendments to Schedule of Charges notified by PSX under clause 3.4 of PSX Regulations whereby a new “Regulatory Fee” schedule is proposed to be inserted to cover cost of regulatory functions and investor awareness programs and marketing campaigns of PSX.

    Pursuant to Section 7(3) of the Securities Act, 2015, all concerned are invited to provide written comments on the proposed amendments by Tuesday, January 12, 2021.

  • Stock market ends down by 36 points on selling pressure

    Stock market ends down by 36 points on selling pressure

    KARACHI: The stock market declined by 36 points on Tuesday amid selling pressure seen during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,650 points as against previous day’s close of 44,686 points showing a decline of 36 points.

    Analysts at Arif Habib Limited said that the market saw selling pressure from the start of trading session, which was primarily caused by an overnight decline in crude oil prices as well as profit booking in Power, O&GMCs and Fertilizer sector stocks.

    Cement and Steel sector stocks bounced back today after yesterday’s selling activity on the back of healthy growth in cement dispatches.

    Chemical sector stocks also performed well on close of quarter and anticipation of posting better earnings.

    Among scrips, HUMNL topped the volumes with 68.4 million shares, followed by PRL (58.1 million) and TRG (31 million).

    Sectors contributing to the performance include E&P (-108 points), Power (-53 points), O&GMCs (-33 points), Fertilizer (-10 points) and Technology (+46 points).

    Volumes increased from 540.8 million shares to 582.4 million shares (+8 percent DoD). Average trading value, on the contrary, declined by 9 percent to reach US$ 151 million as against US$ 166.3 million.

    Stocks that contributed significantly to the volumes include HUMNL, PRL, TRG, PAEL and KAPCO, which formed 36 percent of total volumes.

    Stocks that contributed positively to the index include TRG (+43 points), KAPCO (+25 points), HBL (+20 points), SEARL (+17 points) and MCB (+16 points). Stocks that contributed negatively include HUBC (-74 points), PPL (-55 points), OGDC (-41 points), PSO (-19 points) and POL (-12 points).

  • Share market gains 252 points amid buying activity

    Share market gains 252 points amid buying activity

    KARACHI: The share market gained 252 points on Monday owing to positive sentiments prevailed and the market witnessed buying activity.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,686 points as against 44,434 points showing an increase of 252 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note and carried the momentum shown on the last trading day, especially with reference to resolution of circular debt that resulted in strong buying in energy chain (HUBC, KAPCO, PSO).

    E&P sector also saw continuation of buying interest, not only due to an increase in international crude oil prices (which jumped 2 percent during the session) as well as the expectation of release of stuck receivables for PPL and OGDC.

    Cyclicals (Cement and Steel) saw slump in stock prices due to profit booking. Tech stocks also bore selling pressure on the latest circular from NCCPL for implementation of close out mechanism for Future Contracts, as Tech stocks composes the most of the open positions in Futures contracts.

    Among scrips, PAEL topped the volumes with 27.3 million shares, followed by HUBC (25.3 million) and HASCOL (24.9 million).

    Sectors contributing to the performance include E&P (+163 points), Power (+127 points), O&GMCs (+96 points), Banks (++77 points) and Textile (+30 points).

    Volumes increased from declined from 642.6 million shares to 540.6 million shares (-16 percent DoD). Average traded value also declined by 2 percent to reach US$ 166.6 million as against US$ 170.7 million.

    Stocks that contributed significantly to the volumes include PAEL, HUBC, HASCOL, WTL and TRG, which formed 23 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+104 points), PSO (+79 points), PPL (+78 points), OGDC (+63 points) and MCB (+31 points). Stocks that contributed negatively include TRG (-60 points), SYS (-33 points), LUCK (-31 points), DGKC (-21 points) and ENGRO (-19 points).

  • Weekly Review: market likely to move in green

    Weekly Review: market likely to move in green

    KARACHI: The share market likely to move in green over million doses expected to be purchased from China within the ongoing quarter and subsequent distribution, dampening in COVID-19 concerns may fuel the market pack.

    Analysts at Arif Habib Limited said that bull run energy stocks to roll over next week and keep interest in the bourse alive.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.6x (2021) compared to Asia Pac regional average of 15.9x and while offering DY of around 6.1 percent versus around 2.4 percent offered by the region.

    While nervousness ruled market sentiment in the earlier part of the week with 3 cases of the new found coronavirus strain in Pakistan as well as profit taking by institutional investors, the equity bourse quickly posted a rebound amid extension in the Prime Ministers construction package to December 31, 2021.

    We also highlight that potential partial resolution of the circular debt with installment due to IPP’s within Jan’21 aided market momentum. That said, the benchmark KSE-100 index breached the 44k level and closed at 44,435 points, up by 2.34 percent / 1018 points.

    Sector-wise positive contributions came from i) Banks (342 points), ii) Fertilizers (231 points), and iii) Oil & Gas Exploration (202 points) while Power Generation & Distribution declined 37 points. Scrip-wise positive contributions were led by OGDC (112 points), FFC (95 points), MEBL (68 points), ENGRO (64 points), and PSO (63 points). HUBC and KOHC led the negative contributions, declining 43 and 15 points respectively.

    Foreign selling continued this week clocking-in at USD 46.22 million compared to a net sell of USD 20.44 million last week.

    Selling was witnessed in All other sectors (USD 46.14 million) and Technology (USD 0.95 million). On the domestic front, major buying was reported by Companies (USD 41.09 million and Individual (USD 20.04 million).

    That said, average daily volumes and traded value for the outgoing week were up by 4 percent and 3 percent to 528 million shares and USD 142 million, respectively.

  • Share market welcomes New Year with 678 points gain

    Share market welcomes New Year with 678 points gain

    KARACHI: The share market on Friday welcomed the New Year with a bull run by gaining 678 points on the back of date extension to an amnesty for construction industry and hopes of resolution of debt circular.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44.435 points as compared with previous day’s close of 43,755 points, showing an increase of 678 points.

    Analysts at Topline Securities said that bulls dominated the benchmark KSE-100 index on first trading session of the year, as the index gained to make an intraday high of 1,119 points.

    This positivity in the market can be attributed to sources that suggested that IPPs and government have in principle come to an agreement to clear outstanding backlog of circular debt.

    Resultantly IPPs, E&Ps and Oil and Gas Marketing sector (all part of the energy chain) lead the rally in market.

    Other analysts said that the market responded positively to the announcement of the government to extend the date for the amnesty up to June 30, 2021 for no question on investment made for housing projects.

    Some intraday profit taking was observed during the latter part of second trading session, as the index finally settled at 44,435 level (up by 1.55 percent).

    Major contribution to the index came from HUBC, OGDC, PPL, PSO and UBL, as they cumulatively contributed 465 points to the index. Traded volume and value for the day stood at 641 million shares and Rs.27.2 billion respectively. POWER was today`s volume lead with 35.8 million shares.

  • CDC launches fintech initiative for AMCs

    CDC launches fintech initiative for AMCs

    KARACHI: Central Depository Company (CDC) of Pakistan Limited, through its subsidiary ITMinds Limited, has launched the pilot version of a digital platform for the support of the Mutual Fund industry, a statement said on Friday.

    This platform, named as “Emlaak Financials”, will function as a digital distribution channel initially for Mutual Funds and later on for other asset classes also.

    In the first phase, ‘Emlaak Financials’ will provide a low-cost and centralized solution to investors, initially through covering low-risk investors, but will soon be expanded to a full-fledged distribution mechanism for all types of investors.

    The pilot project has been launched with five Asset Management Companies (AMCs); however, soon more AMCs will be on-boarded on the platform. The launch of the pilot project has been officially announced and formalized in an Agreement Signing ceremony at the CDC House, Karachi. Farrukh Sabzwari—Commissioner Specialized Companies Division (SCD) SECP presided the event.

    While addressing the occasion, Farrukh Sabzwari—Commissioner SCD SECP said, “It is indeed a very important milestone for the Mutual Fund Industry as it embarks on this consolidated digital distribution channel launched for the first time in Pakistan.

    “We, at SECP, are strong proponents of re-engineering processes for promoting efficiency and transparency through digitalization and will continue to support and encourage all such initiatives by providing all the required Regulatory assistance in this regard. Pakistan’s mutual fund segment stands at a meager 1.6 percent of the GDP, which is very low compared to the market’s potential.

    “A major obstacle in moving the needle has been limited outreach and focus on specific market segments. The pivotal role of innovation in economic development is undeniable, and I congratulate CDC on coming up with this innovative solution for the Mutual Fund Industry which will lead to higher productivity, reduced turnaround times, lower costs and wider outreach.”

    At the occasion, describing the objectives of the platform, Badiuddin Akber—CEO CDC said, “After the successful integration of Roshan Digital Accounts with Capital market, CDC is now launching this new FinTech solution which aims to pave the way for the growth of the Mutual Fund Industry and for promoting financial inclusion in Pakistan at the grass-root level.

    “CDC is committed to provide innovative tech-based platforms to Capital Market entities through which they can leverage CDC’s technological edge to enhance their investor outreach in a convenient, informative and interactive manner.”

    The event was also attended by representatives of the participating AMCs and CEO MUFAP, Ms. Mashmooma Majeed, who lauded CDC’s efforts in undertaking this initiative and playing its role for the development of the mutual fund industry.

  • SECP issues requirement for digital account opening by AMCs

    SECP issues requirement for digital account opening by AMCs

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Thursday issued criteria for opening of digital accounts for Pakistani individual customers by Asset Management Companies (AMCs).

    Following is minimum criteria for opening of digital accounts for Pakistani Individuals by AMCs:

    Eligible customers;

    01. Pakistani individual customers having:

    i. an active account at any bank/active e-wallet mobile account; and

    ii. an active mobile number in his/her own name.

    02. Minimum customer information/personal profile/documents required by AMCs:

    The customer shall access the online portal (website, mobile App or any third party application) and provide the following minimum information for the purpose of registration:

    i. Customer’s name

    ii. Father/spouse name

    iii. Date of birth

    iv. CNIC/identification number with scanned copy along with date of issuance and expiry

    v. Existing residential and mailing address

    vi. mobile number registered in his/her name

    Provided that the AMCs may in special circumstances use where the Pakistani individual customer does not have mobile number in his/her own name, the mobile number of close family member or the mobile number provided to Pakistani individual customers by his/her employer, or the international mobile number of Pakistani individual customer having CNIC/NICOP and an active account at any bank/active E-Wallet mobile account subject to the following:

    In case where mobile number of close family member is provided, a duly signed written authorization, on prescribed format, from both the Pakistani individual customers and the person whose mobile number is being provided;

    In case where mobile number provided by employer is used, Pakistani individual customer shall provided the bill of service provider in accordance with the procedures and a letter from employer stating that the said mobile number is provided by employer to its employee;

    In case where international mobile number is used, Pakistani individual customers shall provide the bill of service provider in accordance with the procedures.

    Explanation: For the purpose of this circular, the term ‘close family member’ shall mean and include spouse, dependent parents and dependent children only.

    vii. email ID

    viii. Mother’s maiden name

    ix. Bank/E-Wallet Name and Bank Account IBAN Number / E-Wallet Mobile Account Number

    x. Digital / online signature card

    xi. Details of nominee

    xii. Source of fund/income

    xiii. dividend mandate

    xiv. operating instructions, if any

    xv. statement of account request

    xvi. digital/online declaration regarding profession and source of fund/income along with uploading of valid documents as proof thereof

    xvii. digital/online undertaking declaring that funds being invested are his/her own funds and that the funds beneficially owned by other persons will not be used and uploading of declaration / undertaking as a proof thereof

    xviii. Digital/online consent for account opening and using information/documents provided digitally / online for necessary due diligence and verification functions

    xix. Digital / online acceptance of terms and conditions of the account

    xx. Any other documents required under AML Act, 2010 and Securities and Exchange Commission of Pakistan (Anti Money Laundering and Countering Financing of Terrorism) Regulations, 2020 (AML/CFT Regulations) (customer specific)

    After submission of the required information and documents, a message shall pop up for the customer on the online portal that his/her request is in process and he/she will receive an One Time Password (OTP) once the basic information is verified.

    03. Verification by AMCs

    AMCs will carry out required due diligence including but not limited to:

    a. verification of the CNIC/National Identity Card for Overseas Pakistanis (NICOP)/ Pakistani Origin Card (POC) of customer through NADRA VERISYS;

    b. the CNIC and mobile number pairing (whether it is registered in the name of the customer) through Pakistan Mobile Network Database.

    Provided further that in all the circumstances mentioned in proviso of clause 2(vi), AMC shall perform digital verification to conduct online face to face interaction on real time basis through any virtual meeting application (Whatsapp, skype etc.) for authentication of the customer and original identification document.

    c. Screening of the prospective customer against application sanction regimes (UNSC, NACTA, etc.)

    d. IBAN / E-Wallet Mobile Account Number verification through 1-link title fetch service or IBAN/W-Wallet Mobile Account Number and CNIC pairing or Digital Verification to conduct online fact to face interaction on real time basis through any virtual meeting application (Whatsapp, skype etc.) for authentication of the customer and original identification document;

    Provided that for such Pakistani individual customer who do not have mobile number is their own name or provide international mobile number, IBAN/E-Wallet Mobile Account Number verification through 1-Link title fetch service or IBAN/E-Wallet Mobile Account Number and CNIC Pairing and Digital Verification to conduct online face to face interaction on real time basis shall be mandatory.

    e. Verification of contact details through one time password, email or call back;

    In case the verification is successful, an OTP shall be generated and immediately sent on the designated mobile number and/or email address of the customer, as the case may be, valid for a limited period of time.

    f. AMC shall ensure before opening the account that all documents required for screening and risk rating are available and it can conduct screening and risk rating.

    g. the customer will not be allowed to proceed in case the information cannot be successfully verified by AMC.

    04. Account Opening and Activation:

    The AMC will proceed with opening of account after the customer has successfully accessed the portal using the OTP. Account may be opened after due diligence checks and satisfactory completion of the requirements. The opening of customer account shall be subject to compliance with all other applicable legal and regulatory requirements.

    05. Additional Measures by AMC:

    > AMCs shall develop SOPs for:

    * Information and documents to be collected through website/mobile App;

    * Turnaround time (TAT) for decision to open or decline account is 3 working days from the time of upload of all information/documents. In case of any discrepancy in documents or where additional documents are required, AMC would revert back to customer within three working days;

    > AMCS shall not open digital/online accounts in joint names;

    > AMCs may record the real time online fact to face interaction call with the customer while carry out KYC process for opening of account;

    > AMCS to ensure data/ privacy protection, safety and security of information/ documents through reliable IT infrastructure;

    > AMCs should ensure to deploy necessary technical infrastructure and system while establishing business relationship through e-KYC to comply with AML/CFT regime of the country;

    > After opening of account, as part of ongoing monitoring and customer due diligence, AMCs may seek additional information from customers based on their ongoing internal risk assessment and compliance framework;

    > AMCs may carryout periodical re-profiling of the customers in accordance with AML/CFT policy;

    > AMCs shall deploy adequate controls to ensure that customer is not a robot (e.g. CATPCHA Codes);

    > AMCs shall ensure customer care service through call center;

    > To eliminate the risks of impersonation of the customer or identity theft, the AMC should take appropriate security measures;

    06. Types of CIS offered by AMCs

    > All types of mutual funds may be offered to the customers subject to minimum investment limits as per the Constitutive Document of the fund and compliance with disclosure, disclaimer, risk profiling, risk categorization and other regulatory requirements.

    AMCs shall at all times comply with all requirements of AML Act, 2010 and AML/CFT Regulations, 2020 issued by SECP from time to time.

  • Stock market gains 60 points amid profit booking

    Stock market gains 60 points amid profit booking

    KARACHI: The stock market ended with a gain of 60 points on Thursday amid profit booking seen on the last day of the year 2020.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 43,755 points as against previous day’s close of 43,695 points showing an increase of 60 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note on the last trading day of CY20, adding a total of 195 points during the session and closing +96 points (unadjusted).

    On an annual basis, the benchmark index returned around 7 percent and highest closing since 2016.

    Institutional investors resorted to mark to market activity besides booking profit on positions taken earlier to improve half year and full year financial results.

    Cement sector took cue from extension of Real Estate Amnesty Scheme by the Prime Minister, which would eventually help Cement and Steel Sector listed companies.

    Among scrips, PRL topped the volumes with 41.4 million shares, followed by SILK (38.5 million) and FFBL (36.7 million).

    Sectors contributing to the performance include Cement (+61 points), Power (+39 points), Fertilizer (+12 points), Banks (-18 points) and Insurance (-9 points).

    Volumes increased from 455.9 million shares to 578.2 million shares (+27 percent DoD). Average traded value also increased by 5 percent to reach US$ 148.8 million as against US$ 141.8 million.

    Stocks that contributed significantly to the volumes include PRL, SILK, FFBL, TRG and PIBTL, which formed 32 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+37 points), UBL (+18 points), LUCK (+16 points), MLCF (+16 points) and MCB (+15 points). Stocks that contributed negatively include BAHL (-28 points), MEBL (-18 points), NESTLE (-9 points), ENGRO (-8 points) and PSO (-7 points).

  • KSE-100 Index grows by 7.3 percent in 2020

    KSE-100 Index grows by 7.3 percent in 2020

    KARACHI: The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) has posted 7.3 percent growth during the year 2020 as one day is still remaining to conclude the year.

    Analysts at Topline Securities on Wednesday said that Pakistan benchmark KSE100 index gained 7.3 percent (USD: 3.6 percent) in 2020 (one trading session left). The return in USD terms during 2020 is better than -1.8 percent of 2019, however lower than the last ten year average of 10 percent.

    “The year 2020 was a story of two halves for Pakistan equities as the first half witnessed a decline of 15.5 percent (USD: -22 percent), while a robust recovery was seen in the second half as the benchmark index recovered by 26.9 percent (USD 33.1 percent). Just like peers, PSX rallied 60.5 percent from its bottom on Mar 25, 2020.”

    Interestingly, despite lower broader market return, few mid cap stocks have posted a billion normal returns (adjusted) namely TRG (up 270 percent), SYS (up 242 percent), PIOC (up 234 percent) and CEPB (up 200 percent).

    Pakistan under performed MSCI Emerging Market and MSCI World indices. However, against MSCI Frontier Market, PSX outperformed as MSCI FM declined by 4 percent.

    During 2020, Pak Equities gain of 7.3 percent was also lower than Gold and PIBs return of 28 percent and 17 percent, respectively.

    Activity at PSX increased significantly, due to a rally in mid-caps led by local investors. Traded volume and value in 2020 was 328 million shares/day and Rs12 billion (US$75 million)/day, respectively.

    The analysts said that KSE-100 may touch 52.5,000 mark in 2021 due to strong corporate earnings growth along with re-rating. Four key triggers to watch out for during 2021 will be (1) COVID-19, (2) IMF, (3) foreigners activity and (4) politics.

    KSE-100 Index under performed its peers and global benchmarks during 2020.

    The benchmark index posted a US Dollar return of 4 percent compared to MSCI Emerging Market return of 12 percent and MSCI Developed and World Market return of 13 percent.

    However, PSX outperformed MSCI Frontier Markets as its value declined by 4 percent.

    The benchmark index also under performed its peer countries with Bangladesh, India, Sri Lanka amongst top markets during 2020 (refer to below).

    Overall traded volume (ready/cash) at PSX averaged at 328 million shares/day (+107 percent YoY) in 2020, highest after 15 years.

    Similarly, traded value also increased to an average of Rs12 billion/day (or US$75 million/day), up 106 percent from 2019 and most after 12 years.

    In the futures market, PSX volumes were also at a 15 year high of 101 million shares/ day. Similarly, traded value in futures is at a 12 year high of Rs4.7 billion/day (or US$29 million/day).

    Most activity, in terms of average volumes, was witnessed in small and mid cap stocks like HASCOL (21 million shares/day), UNITY (20 million shares/day), TRG (16 million shares/day),MLCF (15 million shares/day) and KEL (13 million shares/day).

    In value terms, the most activity was seen in TRG with an average value of Rs746 million/day, LUCK (Rs564 million/day), MLCF (Rs481 million/day), DGKC (Rs474 million/day), and PPL (Rs368 million/day).

    Amongst market participants, share of individuals in total activity increased from 60 percent to 63 percent while foreigners share dropped from10 percent to 7 percent in 2020.

    Settlement Ratio (UIN) during 2020 dropped to an average of 56.6 percent from 60.9 percent in 2019. Leverage to Market capitalization increased to 0.26 percent compared to 0.18 percent in 2019.

    Foreigners continued to remain sellers to the tune of US$570 million, highest in more than a decade. Cumulative selling in the last six years has amounted to US$2.2 billion.

    This non stop selling could be attributed to closure of few frontier market funds, under performance of Emerging and Frontier markets and negligible weight of PSX in MSCI Emerging Market

    Highest foreign selling was witnessed in the Banking sector with a net outflow of US$176 million followed by E&Ps (US$125 million) and Cements (US$107 million).

    Most of the selling in these sectors was absorbed by local insurance companies, and local individuals.

    According to SBP data, widely followed, foreign portfolio investment stands at US$3.0 billion (high of US$8.4 billion on May 26, 2017 and low of US$1.0 billion on Mar 14, 2009). Within this (US$3 billion), our estimates suggest that, around US$0.5 billion-1 billion is strategic holdings of sponsors.

    That said, remaining US$2 billion is 4 percent of market capitalization and 13 percent of free float capitalization.

    The analysts hoped that US$200-300 million net foreign selling during 2021, where the overall outlook of Emerging and Frontier Markets is also improving.

    Gold remained the most value generator asset class for investors for the second consecutive year by posting a return of 29 percent in (PKR Terms). Gold prices increased significantly due to tough economic conditions globally amidst COVID-19 outbreak as its considered a safe haven during times of global turmoil.

    Fixed Income return (10-year PIB) was 17 percent in 2020, higher than equities return of 7.3 percent.

    Real Estate posted a return of 2 percent during the year (2019: 5 percent. The performance of this asset in 1H2020 was poor (-1 percent) just like equities, however it rebounded in 2H2020 by 4 percent after the announcement of the construction package in July 2020.

    USD remained relatively stable (+4 percent) against PKR compared to the previous two years’ average gain of 19 percent. Stability in this asset class is due to higher than expected remittances resulting in a Current Account surplus during 5MFY21 and overall weakness of the US Dollar.

    The KSE-100 Index has outperformed Emerging and Frontier markets over the last 10 years as PSX 10-Year US$ based CAGR is 7 percent, higher than 1 percent of MSCI Emerging Markets and MSCI Frontier Market decline of 1 percent.

    However, performance of PSX has remained in line with MSCI Developed Market and MSCI World indices.

    Amongst different asset classes in Pakistan, PSX has outperformed others by posting the highest return of 14 percent a year during the last 10 years. This was followed by Gold’s return of 10 percent and T-bills’ return of 9 percent.