Pakistan Stock Exchange witnesses 7.6%WoW increase in trading volume

Pakistan Stock Exchange (PSX) went through a roller coaster ride during the week ended on 10th January 2020, mainly due to geopolitical tensions. Nosedive at the start of the week on heightened geopolitical tensions was followed by volatility in subsequent two sessions as markets looked for clarity. However, towards the end of the week subsiding tension formed the basis of strong recovery. The benchmark index closed the week at 43,207 points, up 2.1%WoW along with improved activity. Average daily trading volume for the week was up 7.6%WoW to more than 303 million shares. Foreign interest also remained high with a net buy of US$7.02 million against net sell of US$7.29 million for last week. Top performers of the week were: BOP, BAFL, LUCK, HMB and MEBL, while the laggards were: INDU, HASCOL, MLCF, ASTL and KAPCO. The scrips posting highest trading volume during the week included: BOP, KEL, UNITY and TRG.

Other news flows during the week included: 1) Pakistan reaffirming its resolve not to become a part of any conflict in the region and renewed its offer for mediating in the Middle East crisis, 2) ECC approving amendments in the Regulation and Generation of Transmission and Distribution of Electric Power Act 1997, 3) the ECC directing the Ministry of Finance to explore all possibilities for improving the liquidity position of PSO, 4) Pakistan’s exports of goods declining 3.96%YoY in December 2019, and 5) The National Assembly passing a bill — for exchange of information and criminals with countries — to meet a requirement of the FATF.

With the geopolitical noise reducing, local dynamics are expected to take the driving seat where improving reserves (at 21-month high of US$11.5 billion) and increased political harmony signal smooth sailing. However, uncertainty regarding upcoming FATF review is expected to cause volatility. Moreover, result season knocking on the door, any surprise or disappointment in earnings, particularly of heavyweights like Banks, Oil & Gas, can play a key role in determining the direction of market.

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