Pakistan Stock Exchange posts 46%WoW increase in average daily trading volume

The benchmark index of Pakistan Stock Exchange (PSX) continued the upward momentum attained in the earlier and started the week on a strong footing, recouping 900 points in first trading session, supported by declining yields in the latest PIB auction. Additional stimulus was provided by easing noise on the political front. Encouraging numbers of external account also provided support. The positive impact of all the factors put together helped the index to close all 5 trading days of the week in green. The week ended on 8th November 2019 closed the index at 35,978 points, up 4.66%Wow. As a result of active participation of investors, average daily traded volume rose to 243 million, up 46%WoW. Foreigners emerged net buyers with US$4.6 million worth of shares during the week. Top performers of the week included: HASCOL, INDU, PSMC, FFBL and NCL, while ASTL, FCCL, ABL, and MEBL were the major losers.

Key macro and sectoral headlines impacting the market included: 1) local cement dispatches during 4MFY20 rising by 2.3%YoY to 13.312 million tons while exports grew by 16.48%YoY to 2.8 million tons, 2) Prime Minister Imran Khan stating that Government of Pakistan (GoP), with the help of Turkish President Tayyip Erdogan, has amicably resolved the Karkey dispute, saving US$1.2 billion penalty, 3) sales of petroleum, oil and lubricant (POL) products decreasing by 7%YoY to 5.97 million tons during first four months of current financial year, 4) GoP slashing profit rates on Defense Saving Certificates by 2.33% to 10.68% per annum and 5) Economic Coordination Committee (ECC) increasing sale margins of oil marketing companies (OMCs) by Rs0.17/ liter.

After a jubilant week, analysts expect investors to book profits. The upcoming monetary policy is also expected to determine the market momentum. While some analysts expect status quo to prevail over, others don’t rule out reduction in policy rate up to 100 basis points.

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