Updated on
Summary The lull period seen last month at local bourse was not observed since 1998.
Volumes globally are thin since last few months, however the decline in volumes in Pakistan is abnormal.With investors not making any money in this calendar year as Index is down 4% (7% in US$) all major players prefer to remain on the sideline amid uncertainty in global markets, local political noise and the ongoing taxation issues. And as a result the volumes crashed in the month of November. Thus, once most liquid market of Asia is suffering from extra ordinary low volumes thereby making impossible to execute large orders.Last time the lowest daily volume was recorded at 39mn shares (US$31mn) in the month of January 1998. But at that time the market size was also small with average market cap of Rs489bn (US$11bn). However, in the outgoing month, market saw average daily trading declining to 45mn shares (US$27mn) which is at 166-month low while market capitalization is currently at Rs3.0tn (US$35bn). Such a dull activity has been seen after almost 14-year. Our analysis excludes 4-months (Sep-Dec 08) market performance during and post infamous price floor rule as hardly any activity was seen as most of the stocks were on lower limits. We have taken volume in shares of cash/ready market for our analysis.
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