Month-on-month basis: Overall exposure levels of mutual funds decline slightly

KARACHI: Overall exposure levels of both Islamic and conventional mutual funds declined slightly on a sequential month-on-month (MoM) basis in January 2021.

While Shariah compliant funds saw exposure levels drop by 0.6 percentage points to 92.4 percent, exposures of conventional funds declined by a relatively tamer 0.3 percentage points to 96.8 percent over the period.

“Upon closer inspection of NCCPL data, we find that mutual funds have been net buyers of $3.6 million during year-to-date (YTD) CY21 ($1.1 million in January-21 and $2.6 million during month-to-date (MTD) February-21) with a particular interest in the cement sector where they have been buyers of $23.4 million,” an analyst at the JS Global Capital said.

Following the long trend, the required space has been created by selling in the fertilizer sector ($9.6 million) and the E&P sector ($8.5 million).

An interesting point to note here is that mutual funds have turned net buyers of $1.8 million in the E&P sector during MTD February-21 after net selling of $10.2 million during January-21.

On the flip side, mutual funds have become net sellers ($2.5 million) in banks after exhibiting net buying ($4.3 million) during January-21.

Copyright Business Recorder, 2021