Karachi, September 01, 2021 (PPI-OT): Geopolitics, 4th wave keep KSE100 in check during Aug-2021

The KSE100 gained merely 0.8% during August as the index closed the volatile month at 47,420 level. Cumulatively during the calendar year, the index has gained nearly 7.5% so far.

Investor participation remained subdued during the month as average daily traded volumes declined by 21% over the preceding month to 364mn shares while average value traded slipped by 17% over the same period to US$78mn per day. This limited participation could partly be attributed to geopolitical uncertainty emerging from the Afghan situation and partly to the alarming COVID-19 infections which may have dented investor confidence.

During the month, while price increases were the major reason for the outperformance of the Engineering sector, the Refinery sector gained on expectations of the Oil Refining Policy. Moreover, it was refreshing to see Commercial Banks finally make the list of major sectors that beat the benchmark index.

With net selling of US$14.4mn, Insurance companies were the largest net sellers during the month, outpacing the net selling by foreign investors. Cumulatively during the calendar year however, Individuals have been a pillar of strength for the KSE100 by far with net buying of US$176mn.

Going forward, we believe the market may remain range-bound during the remainder of the ongoing calendar year given uncertainty on the pandemic and lack of investor confidence on macro indicators.