Equities continued recovery drive on the second consecutive day and made hefty gains, under the lead of petroleum sector, on local stock market amid reports that a consortium of institutions has agreed to buy OGDC shares. The LSE-25 index rose by 81.10 points or 1.9 percent to close at 4220.61 as against 4139.51 of the previous session, while the turnover also improved to 78.675 million shares from 53.085 million, registering an increase of 25.589 million shares.
Led by PSO and PPL, share prices recorded healthy gains, which helped index to move upward direction and close above 4,000 points level. However, OGDC, despite positive news stayed in minus zone. Fertilisers, ICI Pakistan, Adamjee Insurance, telecommunications and banks were the prominent chips showing strength. When the market finished, gainers were far ahead of losers.
According to stock analysts, the involvement of banks and institutions to help badla settlement has sent positive signals in the market, boosted confidence of small investors, who have suffered heavily during the current crisis. Now they have started believing that difficult time is over and they have come out of the fear of defaults.
The market has staged a healthy recovery and the upward trend continued on Wednesday amid positive news, which shows issue of settlement is over, and there is no more crisis, a broker said.
Dr Shahid Zia, head of research, Switch Securities Ltd, said the market has successfully thumped the losing streak continuing since March 16 and seems back on track. Due to heavy pressure, that was needless in a panic situation, the market turned heavily oversold. Moreover, the commitment made by a consortium of institutions to buy OGDC shares at 117.50 per share was a major factor for the recovery, he added.
There are also reports that banks have injected funds in the market due to which the badla rate in Lahore has come down drastically, he said, adding due to high badla rate, the market was in danger zone, while with cut in the rate of COT the pressure has started releasing.
An interesting feature of the day was that small investors, who were crying out for losses, re-entered the market, and picked up Scripps of their choice. "This shows they are not small investors, but small speculators and are responsible for recent falls of the market to a greater extent," he observed.
He also said that Wednesday is the settlement day, and if nothing untoward happens, the market will come out of the danger zone. He, however, pointed out that due to consecutive equity falls, the market is under-priced now and there is no room for further declines. But even then, he also pointed out that the people are advised to adopt a cautious approach and not to go for blind buying and selling activity. They could, however, buy banks as their earnings reports are good as well as privatisation-related shares such as PTCL and PSO, he stated.
Out of a total of 76 traded Scripps, 37 were up, six lost, while 33 stayed glued to its previous levels.
PSO was up Rs 12.15, PPL Rs 10.00, Engro Chemical Rs 6.65, ICI Pakistan Rs 4.00 and Adamjee Insurance Rs 3.15.
In minus zone, Mari Gas Company shed Rs 4.00; Askari Commercial Bank lost Rs 2.85, OGDC Rs 2.75, Macpac Films 75 paisa, and Dewan Farooq Motors 65 paisa.
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