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Market Moves: Individual Investors bought Rs. 5 billion worth of Stocks in November

December 8, 2020

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Index giving attractive level to Individual investors seen as contributing factors

Individual Investors have bought Rs 5.3 billion worth of equities in November-2020. This is one of the highest monthly amount bought by individuals over the last ten years.

Meanwhile, Domestic mutual funds have sold Rs. 1.7 billion worth of equities in November as compared to Insurance companies net buying of Rs. 2 billion.

During March this year, Stock Market declined nearly 40 percent. But the rise in the subsequent months was equally swift as the KSE100 rose nearly 60 percent to 43,000 levels. A combination of high liquidity and low interest rates drove the rally.

So, why are Mutual Funds are selling then?

“Mutual Funds selling could be because of a combination of factors. Amid the market run-up, fund houses are realizing their gains. Also, net asset values of several schemes have seen an uptick during the rally, which may have led to investors redeeming their investments” says Adnan Syed, Editor Financial Market Desk at Business Tribune PK.

In the current calendar year, Foreign Investors have sold Rs 475 billion worth of equities. If the selling continues in December, this will also be the highest yearly selling by Foreign Investors ever.

Analysts are of the opinion that investors could be taking advantage of the run-up in the markets. With markets at high levels, investors may have decided to take some profits or even exit fully during the rally to reduce their exposure to equity markets.

Diversified equity Fund Schemes have delivered healthy returns in the last six months. Data from MUFAP shows that Stock in Pakistan have given returns of 20 percent on an average during this period with highest return recorded at 48% for AKD Opportunity Fund and lowest return of 6.9% for HBL Energy Fund.