After a nosedive last week, KSE100 Index took a breather and rose by 274 points or 0.7 percent week-on-Week (WoW) as investors expected ongoing Amnesty Scheme to beef up domestic liquidity. This also concluded the fiscal year FY17-18 with the benchmark index declining 10 percent for the year, with E&P and Fertilizer sectors standing out as top contributors while Cements and Refinery sectors were worst performers. Trading activity rose during the week with average daily traded volumes going up by 7 percent WoW to 182 million shares while the average traded value declined by 1 percent WoW to $ 60 million. In global markets, crude oil rallied by $ 5.6 WoW (up 8%WoW) to $ 78.7 (Brent) post 1) positive developments emanating from OPEC meeting and US President Donald Trump’s announcement to impose sanctions on countries importing Iranian oil. As per US State Department announcement, the Trump Administration could impose sanctions against governments that do not cut imports of Iranian oil to “zero” by Nov 4, 2018. The move came in as a surprise as countries were expecting waivers and a longer grace period before sanctions came into effect. On domestic economic front, Pakistan Foreign Office confirmed that Financial Action Task Force (FATF) would most probably keep Pakistan on its Grey List and ruled out any possibility of placing the country on the Black List. As expected, the news flow did not have much impact on the markets as investors were anticipating similar kind of decision. In local equity market, ongoing Amnesty Scheme remained the most important topic of discussion on the streets. According to unconfirmed news reports, Rs 45bn+ worth of taxes have been collected with another Rs 100 billion+ in the pipeline. The success of the scheme will improve domestic liquidity, but its impact on the Balance of Payment may be limited as we expect foreign repatriations to be on the lower side. In terms of sector performance, Automobile Assemblers and Oil & Gas Exploration companies returned 2.4 percent WoW and 1.4 percent WoW respectively. Major reason behind the positive E&P stock price movement was global oil price rally while Auto Sector performed on the back of third price hike announcement by Indus Motors. Cements and Insurance were worst performers returning -3.1 percent WoW and -4.8 percent WoW, respectively; with the former likely reacting to the possibility of further increase in international coal prices (post rally in oil prices) and continued pressures on Pakistani Rupee. Foreign investors sold shares worth $ 15.5 million during the week. On the domestic front, Mutual Funds and Brokers offloaded shares worth $ 8.4 million and $ 8.3 million, respectively. On the other hand, Insurance Companies and Banks stood out as net buyers of $ 22.9 million and $ 6.5 million, respectively. The news flow on Amnesty Scheme will continue to be the most important sentiment driver over the next week. In case the scheme manages to translate into sizeable foreign repatriations ($2bn+), it will serve as a breather for the Balance of Payment and strained foreign reserves. Moreover, any extension in the deadline (currently set at June 30, 2018) will also be taken positively for the market, said Elixir Research Department. Published in Daily Times, July 2nd 2018.