Lahore stocks rangebound

There was range-bound activity on local share market during the preceding week, where values and turnover showed a declining trend, partially due to lacking interest on the part of big players and somehow on account of technical reasons.
The market took a weak start and on first and second days of the week under review it moved both ways with activity remaining very thin. Later in the week, the market continued painting a mixed picture as local investors adopted a cautious approach due to which volume came down drastically.
According to brokers, after two weeks' continuous bullish spell the market took a breather on technical grounds but following foreign buyers' interest in banks, falls were limited. The LSE-25 index marginally declined by 11.03 points or 0.23 percent, retreating from 4642.10 points to 4631.07 points. However, due to local buyers' staying on sidelines there was significant decrease in turnover, which shrank from 37.488 million shares to 23.090 million, showing a fall of 14.398 million or 38.40 percent.
Market gurus were of the view that till Eid, they saw hardly any tangible upward movement in the market and it was likely to maintain the mixed trend with sluggish activity. For them, during the preceding two weeks, the market had made hefty gains on the back of foreign buying that was limited to only a few banking stocks. Now the market is in correction phase, which is likely to persist till end of the holy month, they added.
Prices moved both ways on first day of the week under review, but finally settled in positive zone, ending with a marginal gain, following buying interest in exploration companies' stocks. The LSE-25 index finished at 4644.77 points as compared to 4642.10 points, registering a nominal gain of 2.67 points. Volume, however, remained on the lower side and retreated to 31.247 million shares from 37.488 million of the preceding session, plunging by 6.240 million shares. The market painted a mixed picture with banking sector staying highly depressed following correction in key banks, like MCB Bank, National Bank and others. However, aggressive buying in oil & gas sector, which outperformed, averted the possibility of colossal losses.
Mixed trend again prevailed on the second day and equities registered fractional gain amid sluggish trading trend, due to lacking interest on the part of investors while banking sector helped market avert more losses. The LSE-25 index marginally increased by 3.65 points and ended at 4648.42 points against 4644.77 points while transaction volume slightly improved to 31.808 million shares as compared to 31.247 million shares.
Most of the blue chips, including the petroleum sector remained under pressure because of profit taking while fertiliser and banking sectors led the market in green zone at the close. Share prices retreated on Wednesday on technical grounds, leading the index to downward direction. The LSE-25 index closed at 4606.84 points compared with previous 4648.42 points, losing 41.58 points. Volume was almost steady and was registered at 31.778 million shares as opposed to previous day's 31.808 million shares.
On fourth day on Thursday, the share market remained range-bound and ended firmer, with slow activity following lack of interest from the local buyers, resulting in further decrease in trade turnover.
The LSE-25 index closed at 4615.69 points compared with 4606.84 points, registering a marginal rise of 8.85.Volume further declined to 22.102 million shares as against 31.778 million shares, showing a fall of 9.675 million shares. The market painted a dull picture with range-bound trade following lack of interest.
Volume was alarmingly low however, although the index ended in positive column, but the losers were far ahead of the gainers. Interest was seen only in exploration companies' shares and some low profiled banks while the main banking stocks depicted lacklustre. MCB Bank, despite positive news about its expansion plans, failed to attract buyers. Equities showed an erratic movement on the weekend, as it showed positive signs with interest in selective banking stocks, but in last minutes profit-taking emerged forcing the index to shed a sizeable part of early gains.
The LSE-25 finished at 4631.07 points compared with 4615.69 points, depicting a marginal improvement of 15.38 points. There was also hardly any movement in turnover, which closed at 23.090 million shares versus previous day's 22.102 million shares. The market made a strong opening and moved up on the back of buying in selective banks, cements and some other scrips, resisting weekend pressure.
At one stage, it was up 70-75 points but in last minutes pressure emerged reportedly due to a rumour regarding issuance of notice by Securities and Exchange Commission of Pakistan (SECP), directing brokers for separating their accounts from their clients. This development caused pressure in the market, leading the LSE index to end with only a marginal gain.
"With limited buying interest from foreign buyers, we cannot expect sustained rallies," an analyst from a leading brokerage house while reacting to dullness of the market, said. Without involvement of local buyers, particularly the institutions, broad-based activity is even unthinkable, he further said, adding, local buyers' entry in the market was inevitable for increase in turnover.
Although, there are positive reports for banking sector, including that Britain's Barclays Bank is hiring Pakistani bankers yet banks alone, which mostly mainly depending on foreign buying, could not support the market for a longer period, he commented. However, news of discovery of oil near Hyderabad could trigger interest in OGDC, he viewed. But, he pointed out, widening trade gap is a negative factor, which will have an impact on the market sentiment. According to news, trade deficit has touched US $3.158 billion mark. All such factors indicate the market may remain range-bound, as people will not take any risk during the month of Ramazan, he concluded.