LSE stays depressed

The profit-taking, row between the Privatisation Commission and the Etisalat over PTCL take-over, and futures settlement-related issues kept the sentiment depressed during the past week on the Lahore Stock Exchange (LSE), where the benchmark index shed 32.23 points amid a phenomenal rise in the volume of transactions.
It was short weekend, as the market remained closed on October 26 on account of last Juma of Ramazer. It was a roller-coaster drive during the week under review, which comprised four sessions instead of five sessions, and the market remained under pressure mostly because of pressure caused by futures settlement. Moreover, rumours relating to delay in the PTCL take-over also added to the already depressed sentiment.
Stock analysts said there were conflicting rumours regarding the PTCL take-over, therefore, no one was ready to take risk, adding all those who showed interest in early hours of a session, offloaded their positions in last minutes to remain on safer side, that did not allow the market to settle down during the entire week.
Some recovery was seen on weekend following smooth settlement of futures trades. The LSE-25 decreased to 3,959.83 points from 3,992.06, depicting a fall of 32.23 points or 0.80 percent. Overall turnover, however, denoted an upward fluctuation of 14.751 million shares or 33.37 percent, moving up to 58.944 million shares from 44.193 million shares.
Share values depicted high volatility on Monday. However, late buying, particularly in petroleum stocks and banks, helped the index gain 36.42 points amid a visible rise in volume of transactions. The LSE-25 index closed at 4,028.48 points as against 3,992.06 of the previous closing session, registering a net increase of 36.42 points. Overall turnover mounted to 55.547 million shares from 44.193 million, posting a rise of 11.354 million shares.
The market commenced trading with a healthy note and buying in petroleum and banking shares provided strength to the index, and it picked up. At one stage in early hours, the market was up around 100 points, but later started weakening as people indulged in profit-taking. At mid-session, equities moved both ways and the trend was unpredictable that forced investors to go for profit-selling. Later on, buying in selective shares helped the market regain strength.
The erratic movement of the market disturbed small investors who appeared indecisive in their dealings. In view of previous week's massive falls, most people were expecting a smart recovery on first day of the week under review, and it did happen in early hours, but subsequently profit-selling overshadowed its impact.
Bearish trend prevailed on the second day as equities registered losses across the board amid ascending transaction volume due mainly to profit taking. The LSE-25 index declined by 53.08 points, and closed at 3,975.40 against 4,028.48 of Monday, while trading turnover increased to 68.181 million shares as compared to 55.547 million shares traded a day earlier. PSO, Maple Leaf Cement, and Lucky Cement resisted declines while National Bank, Pak Oil Fields, Bank of Punjab, Askari Commercial Bank Engro Chemical, PPL, Fauji Fertiliser, Faysal Bank, ICI Pak, and OGDC remained under pressure.
Share values extended the overnight losses on third day of the week under review following pressure in PSO and the banking sector with the benchmark index losing 1.80 percent. The LSE-25 index closed at 3,903.69 points as compared to 3,975.40, losing 71.71 points or 1.80 percent. The volume came down to 43.794 million shares from 68.181 million, showing a net decline of 24.387 million shares or 35.76 percent. The market was plus at the opening, but subsequently turned bearish with the LSE index descending by over 200 points. Turnover was also considerably low depicting sluggish business activity.
Analysts said because of heavy falls during the previous week, correction had prolonged, otherwise there was nothing negative in the background. In last minutes, the market was volatile and unpredictable, which indicated the situation might remain more or less the same in the upcoming session. Share values, however, rebounded on last day of the trading week, under the lead of petroleum and banking stocks, following smooth settlement of future trades on Thursday, taking the index 1.43 percent up. The LSE-25 index closed at 3,959.83 points as compared to 3,903.69 of Wednesday, registering a net gain of 56.14 points or 1.43 percent. Volume mounted to 58.944 million shares from 43.794 million of the previous session, depicting an increment of 15.149 million shares 34.59 percent.
There was not much confidence when trading resumed in the morning and the market showed high volatility, as it was the day for futures settlement. In early hours, selling pressure dominated the market as people in anticipation of a possible eventuality during the process of futures settlement went for profit-taking, brokers said. However, when settlement took place smoothly, the market was back on track. In last minutes, pressure re-emerged after people offloaded their positions, as there was no news about the PTCL take-over.
Now the only threat the market faces is the issue of PTCL take-over, said Mirza Muhammad Ejaz Ullah Baig of Capital Vision Securities Ltd, adding if no positive news came from this side, the market will nose-dive on Monday. There are rumours that Etisalat may not honour the PTCL deal, he added. However, if some positive development takes place, it will surely have an impact on the market, he pointed out.
According to news appearing in the press, President's office has contacted the top slot of Etisalat in Dubai for settlement of PTCL issue.
Earlier, the Government of Pakistan had extended date of payment up to October 28. How the market behaves in the upcoming session, depends mostly on the development regarding PTCL settlement with the Etisalat, Muhammad Mirza Ejaz Ullah Baig commented. According to some latest reports the government has cancelled the deal with Etisalat.