The selling pressure from local investors and institutions and disturbing news from privatisation front dragged the KSE-100 index into minus column and lowering the daily volume for the second consecutive session.
The news published in foreign newspaper has increased the selling pressure that Etisalat is willing to match the bid given by China Mobile. Despite buying on dips in cement, banking and oil marketing stocks, the index stayed in the negative zone.
The short covering towards the end, however, allowed the index a decent recovery. The ability of the index to find support around 8825-8833 depicts presence of buyers in the index stocks.
The last trading session of the week is likely to offer more discounts. It is, therefore, recommended to wait for further adjustment for placement. TheLow volume surge in the stocks trading above fair values computed on basis of FY06 earnings should be capitalised.
The clear picture on the PTC sell-off should be seen for taking fresh positions in PTC. Meanwhile, rumour-led surge should be capitalized as the management's policy regarding dividend payout and use of conventional weapons to fight growing competition in the sector is still unknown.
Technically, the index would continue to find support around 8770-8777. It is, therefore, expected that the second session might witness a healthy closing.
Abbas Raza, research analyst at First Capital Equities, said that astonishing news published in a foreign newspaper that Etisalat is planning to slash PTC's bid money from $1.98 to $1.08 for acquiring 26 percent of its strategic state, owing to which the bourse belled in on a weak note.
OGDC, PSO, NBP, MCB, PPL, and PTC were under pressure even though lower levels brought in punters and jobbers whose purchases weren't able in supporting the market rather higher levels saw these scrip's slipping south due to which the market was unable to rally.
However, DGKC, POL, FCCL, CTTL, BAFL, TELE, PIAA, BOSI, PCCL and LUCK came eagerly into buying giving some shoulder to the index.
New development in PTC's privatisation has yet again put many investors in quandary and negative reports coming in from foreign and local newspapers that have created apprehensions among many market contestants who might prematurely exit, therefore, one should pay heed to announcements or statements issued by either the Privatisation Commission or Etisalat and best market strategy would be to stay selective by keeping profit and stop loss margin in mind so as to avoid adverse loss attributable to one's position by market's movement either way.
He uncertainty in PTCL's sell-off was the major reason as investors adopted a wait and see strategy. Banking, oil and gas sectors failed to capitalise on fundamental strength and halted the market's progress. On the other hand, the cement sector gained momentum and helped the market to remain above the 8850 levels. Fauji Cement was the leader of the day in terms of volume and value, as it gained Rs 1.20 and its 42 million shares were traded.
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