Share values turned highly volatile and after undergoing multiple up and downward fluctuations finally ended almost flat on the Lahore Stock Exchange (LSE) during the last week amid a slight improvement in transaction turnover.
The market failed to determine its direction and except banks, cements and fertiliser, there was no considerable activity in rest of the shares mainly because of uncertainty caused by introduction of new CFS system, PTCL deal and above all the issue of Kalabagh dam.
There was also anticipation in the market that the government had decided to construct the dam and this approach triggered activity in cement, but it proved short-lived following some conflicting news in this regard, stock analysts said.
The LSE-25 index depicted a fractional increase of 2.97 points to reach 4479.22 points as against 4476.25 of the preceding session. The turnover improved to 77.313 million shares from 69.404 million shares, posting a net increase of 7.909 million shares.
According to analysts, as it is yet not clear whether or not President's ongoing efforts for mustering support on Kalabagh dam succeed, the market is expected to remain volatile during the upcoming week. Thus the small investors needed to be very careful and better to await dips for buying.
The local share market stayed mixed on Monday, and after undergoing short intra-day corrections, settled in the positive zone, with the index reaching its highest mark after March 2005. The LSE-25 index reached 4511.62 points versus 4476.25, posting a net rise of 35.77 points or 0.79 percent. The volume ascended to 84.116 million shares from 69.404 million, registering an increase of 14.707 million or 21.19 percent. There was a roller-coaster movement in the market on first day of the week, where stocks remained high volatile and moved up and down frequently. However, the underlying sentiment remained bullish and on account of interest in Nishat Mills, Allied Bank and fertilisers, the index picked up subsequently.
Activity was slow because key players awaited the outcome of President's ongoing efforts to arrive at a consensus on the issue of Kalabagh dam. On the second day on Tuesday, led by oil and banking sectors, equities suffered losses on account of profit-taking and the lack of buying support.
The LSE-25 index declined by 29.78 points, closing at 4481.84 against 4511.62 of Monday, while trading turnover squeezed to 65.459 million shares as compared to 84.116 million shares. Southern Electric Power, Bosicor Pakistan, Nishat Mills and MCB Bank resisted declines, while PPL, Askari Commercial Bank, Lucky Cement, National Bank, and DG Khan Cement remained under pressure.
Share prices maintained the weak trend on third day of the week under review following selling pressure, mostly in petroleum and cement stocks, which forced the index, suffer loss of 1.28 percent. The LSE-25 index closed at 4424.08 points compared with 4481.84, shedding 57.76 points.
The turnover declined to 71.803 million shares from 65.459 million shares of the previous session, registering a fall of 6.344 million shares. Trading commenced with a positive note, and the market depicted a rising tempo for sometime subsequently, but soon fell victim to selling-pressure with PSO and cement stocks receiving heavy blow. Analysts described overpriced shares as the key factor for keeping the market under pressure.
Share values, however, climbed on Thursday following late buying in fundamentally strong stocks, notably banks with the LSE-25 index closing at 4459.73 points versus 4424.08 of preceding session, gaining 35.65 points. The volume registered at 55.599 million shares as compared to 71.803 million of the previous session, posting a decline of 16.204 million shares.
The market maintained its overnight trading trend and showed bearish signs in early hours, which led the index to downside. However, last minutes buying interest in fundamentally strong scrips helped the market recovery. Last minutes recovery was possible due to strong buying interest in banks, which helped the market build up momentum.
Equities maintained the upward tendency on last trading day of the week, though with a marginal improvement in the main index, and strongly resisted pressure caused by profit-selling, on the back of interest in banks and the gas sector. The LSE-25 index closed at 4479.22 points as opposed to 4459.73 of the previous session, registering an increase of 19.49 points. The volume surged to 77.313 million shares from 55.599 million of Thursday, posting a significant increase of 21.713 million shares. The market performed roughly as equities moved back and forth amid positive and negative news regarding introduction of new CFS system and development concerning PTCL deal.
Prevailing uncertainty due to Kalbagh dam issue and new CFS system introduced by the SECP has overshadowed the positive factor of foreign investment in the capital market, which keeps pouring in with regular intervals, analysts said.
According to them, although fundamentals of the market are very positive and there also news reports of settlement of PTCL-Etisalat issue and foreign investment has reached $315.5 million, investors are advised to play safe game and not to exceed their limits. At the existing levels where the market has turned very rough and its tone is extremely uncertain, they should adopt a buy on dip strategy to avoid losses.
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