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Sunday, September 20, 2020

KSE100 - Week 38-2020 Closing Notes: A See-Saw Week


KSE100  remained volatile and indecisive through out the week with cyclical showing strong trend of profit booking. While index briefly dipped below its pivot during the trading week, it has sustained closing above its pivot which lends some credence to upcoming minor recovery in the index with top side target of 43000 +/- 300. The recovery is likely to be led by bank, OEP and fertilizer sectors. And as we have reminded over and over, one must focus on the scrip and not the index because index can be misleading depending on which sector is leading the index growth. A parabolic pattern was also observed developing during the last few trading session. This has multiple interpretations but a common expectation is making a new high before collapsing for correction. Looking forward, we reiterate our stance of profit booking and hunting for stocks which are still at bottom and are likely to perform against the index. 

Looking as market capitalization we observe a sharp drop between Sep-14 and Sep-16 as compared to the outgoing week-37 average. However, a gradual recovery is observed from Sep-17 onward and the weekly average shows a gain of +13.13 Billion/PKR. A major financial event on Sep-16 was State Bank PIB auction, which has under performed (link-1). Upcoming major financial event which can impact stock market is MTB auction of 450Bn on 23-Sep. For complete calendar of PIB, MTB and Sukuk auction calender, visit here.