Pakistan Stock Exchange is set to receive trading transactions that could be difficult for the market’s current system to handle. In order to handle the expected foreign traders’ transactions, PSX has changed its formula for the determination of closing prices of the shares. The new method is being employed in the wake of MSCI inclusion which is due on 1st of next month. The temporary change will only be in effect for one week, from May 26th to June 2nd.
The new formula will calculate the closing price of shares on the basis of average of last two hours of the trading session. Contrary to the present method of calculating the price which is done by taking out an average of the last thirty minutes, it will now take into account an average of last two hours prices. In an official statement, it said that, “this is a temporary measure purely to facilitate expected large number of transactions in the transition to MSCI EM Index”.