Zubair Yaqoob
Karachi
4.7% Return – An 11-week High, the jubilance in the KSE-100 index continued from last week and provided an 11-week high return of 4.7% WoW. Expectation of a rate cut in the near future on the back of continuous decline in government securities’ yields was further cemented with the government slashing National Savings Scheme profit rates by 170-228bps across the different schemes. However, inflation reading for Oct’19 settled at 11.04% YoY which was higher than expectations, but failed to deter the positive momentum. Moreover, SBP reserves increased to USD 8.4bn which is the highest level since April. Furthermore, external account position continued to improve with the trade deficit declining 34% YoY during 4MFY20. The index closed at 35,978 points – a 6 month high (124 trading sessions), and up by 1601 points WoW. Sector-wise positive contributions came from Fertilizer (374pts), Commercial Banks (357pts), E&P (211pts), OGMCs (115pts), and Automobile Assembler (91pts) while negative contributions were led by i) Textile Weaving (5pts).