Bears dominate capital market

The political issues and profit taking in the blue scrips on Tuesday kept the bulls from staging a comeback, and the slide in the shares market continued unabated, the KSE-100 index plummeting another 89 points to close at 10317.41 points level.

Overall sentiment remained dismal throughout the session despite OGDCL's decent FY06 earnings announcement and dividend payout. Trading volume in the ready market was lower at 71.273 million shares as compared to 154.997 million shares of Friday.
Of the traded companies, 180 scrips showed declines and 86 scrips advanced, while the value of 35 scrips remained unchanged. The market capitalisation was also down by Rs 23 billion to Rs 2.887 trillion.
Battering was witnessed in virtually all notable scrips, barring Union Bank, FFC and NML. Union Bank continued its ascent, gaining Rs 0.25 to close at Rs 89.00 while FFC and NML posted respective increments of Rs 0.45 and Rs 0.70 with low volumes.
OGDCL remained the overall volume leader, but posted Rs 1.65 decline to close at Rs 133.25. PPL and POL also depicted respective declines of Rs 1.00 and Rs 6.75.
Tanvir Abid at Live Securities said that among banking scrips, NBP, MCB, BoP and Faysal Bank decreased by Rs 3.95, Rs 3.50, Rs 0.80 and Re. 1.00 to close at Rs 227.50, Rs 222.00, Rs 86.80 and Rs 62.70, respectively.
The telecom giant PTCL also remained under selling pressure and closed 1.6 percent lower at Rs 42.70. Following suit, notable cement scrips also closed in the red. D G Khan and Lucky Cement depicted 0.5 percent and 0.9 percent declines to close at Rs 93.55 and Rs 103.50 respectively.
Ahsan Mehanti of Shahzad Chamdia Securities said that less-than-expected earnings per share announced by OGDCL led the investors to profit taking and uncertain political situation in the province was one of the main reasons behind the dip.
Saima Naz of Atlas Capital Market said that the share market kept hovering in the negative zone and finally closed below previous day's close by 89 points. Expectations of positive results announcement from most of the blue chips could not help the market to sustain countered by some prevailing political issues on the privatisation front. Investors' shattered confidence could not pick up even after OGDCL's results announcements in line with the expectation where the scrip plunged by Rs 1.50 contributing by 28 points towards index decline.
NBP and PTCL followed by contributing 11.0 and 10.5 points towards index decline. The other two E&P giants POL and PPL also followed suit and plunged by Rs 6.50 and Rs 1.0 despite better corporate result expectations. PCBL closed at its upper limit on the back on the back of the news regarding possible take-over or acquisition by other bank.
Volume in futures market was 17 million shares versus 39 million shares previously. Muhammad Junaid Iqbal at Jahangir Siddiqui Capital Market said that the market opened 32 points plus but was not able to sustain as investors cautiously preferred to stay on sidelines and waited eagerly for OGDCL FY06 result. The market remained range-bound with very low volume throughout the day.
OGDCL posted an EPS of Rs 10.69 for FY2006 and announced a final cash dividend of Rs 3.75 per share. Hasnain Asghar Ali at Aziz Fidahusein said that KSE witnessed an extremely dry session despite availability of main stocks at fairly discounted levels, announcements of main stock carrying huge cash payouts and upcoming events such as GDR offerings both on government and private level and privatisation. The ongoing political developments on external side while increase in cost of trading, capped CFS. Introduction of UIN and certain other issues restricted the initiators while other participants continued to watch the proceedings from the pavilion.
Technically, the index will continue to find support around 10250-10257 while overhead resistance stays at 10500-10510. It is, however, recommended to wait for turnover to increase for taking fresh trading positions while support levels can be looked for investments in the main stocks. The rumour that pressurised the index was that the BOD of KSE would meet shortly to decide about the prevailing ban on short selling in futures market.
Although index had registered a mark of 12000 without that ban, nervousness can although be exploited by the bearish forces. Confirmation of the rumour will, however, allow the bulls to re-enter.