Karachi, July 01, 2021 (PPI-OT): Pakistan Strategy: FY21 KSE-100 post highest dollar adjusted return since FY04

KSE-100 closes FY21 with the index returning 37.6% – the highest annual return since FY14 whereas performance is more attractive in US$ terms as the index gained 46.7% which culminates into highest return since FY04.

Liquidity improved significantly during the year (FY21 avg. ready volume: 527.4mn shares vs. 196.5mn shares with 4QFY21 volumes standing at 669.4mn shares – one of the highest in PSX history). Traded value stood at PkR27.7bn in FY21 compared to PkR10.3bn in the same period last year.

Flow wise, foreigners accelerated to cut positions in line with their global strategy with an outflow of US$387.3mn – the highest since FY17. On the other end of the spectrum, Individuals and Companies continued to dominate with net inflow of US$332.1mn and US$137.8mn respectively.

While near term volatility cannot be ruled out given Govt. and IMF continues to engage on roll-out of reforms, we believe market is set to continue its bull run over medium to long run. Hence, any correction should be taken as an opportunity to accumulate with our preference tilted towards construction-chain and refineries.