Uncertainty gripped the share market on Wednesday, following submission of KSE proposals to SECP seeking relaxation pertaining to futures rules, where share prices moved in a narrow band throughout the session. The KSE-100 index rose 10.79 points, or 0.16 percent, to 6898.72 from 6887.93 of Tuesday. The volume fell to 117 million shares as against 168 million shares. The market capitalisation rose to Rs 1.950 trillion, up from Rs 1.948 trillion.
The market moved in a thin band throughout the session. It made a high of 6953 points, gaining 66 points, and a low of 6867 points, losing 10 points. One of the major factors, which badly hurt investors'' confidence, was the proposal, once again forwarded by the KSE to SECP, seeking enhancement in free-float mechanism and 50 percent margin in futures market.
The traders were of the view that as the stock market regulator had earlier rejected the same proposals, the investors should now settle the issues and accept the regulations forwarded by the SECP.
The share prices have touched attractive levels and sooner the settlement, it would be better for the investors to start accumulating shares having good dividend yields, they said.
Tanvir Abid, head of research from Live Securities, said that the market remained lacklustre and directionless. This was attributable to the continued absence of the SECP and KSE coming on the same wavelength with respect to the regulatory environment. The KSE has again forwarded proposals to the SECP, to help mitigate the impact of COT phase-out and to improve the liquidity of its members.
He said that an interesting feature was that approximately 75 percent of total ready market volumes comprised those shares in which badla financing was currently available. "Volumes on the futures counter nowadays are at insignificant levels, at around 30 million shares.
This indicates that with the phase-out of carryover transactions, total market trading volume may drop considerably further in case, firstly, the futures market rules are not rationalised, and secondly, there is no concrete implementation of margin financing."
Hasnain Asghar from Aziz Fidahusein said that the dicey movement continued as the strength invited offloading and the dips failed to tempt fresh funds. Although buying by the locals restricted the dips, selling on strength never allowed any daring northward movement. Low turnover would continue to haunt the stakeholders.
Inability of the index to perform would, therefore, invite renewed selling even at current levels. Technically, the index would continue to face immediate resistance around 6930-6937 while mild support stays at 6750-6757. It is, therefore, recommended to wait either for positive development or for the index to enter the trading band of 6500-6750 for trading and placement.
OGDC gained 25 paisa, to Rs 91.35, on a volume of 26.5 million shares. PTCL lost 45 paisa, to Rs 60.15, on turnover of 23.8 million shares. PSO moved down to Rs 359.50 from RS 363.20 on trading of 9.9 million shares; PPL gained Rs 5.60 to Rs 158.10 on turnover of 9.3 million shares; and NBP closed at Rs 92.55, ie lower by Rs 1.20 on transactions of 6.6 million shares.
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