Share prices nose-dived on Lahore Stock Exchange (LSE) due to multiple factors, including fears of the report to be placed before the National Assembly standing committee on Wednesday for March crisis of the market, news of postponement of NBP deal for sale of holding in Bank Aljazeera and non-availability of funds for badla transactions.
The LSE-25 index fell down by 150.92 points or 3.15 percent to 4625.32 points from 4776.24 points of the previous session. Turnover declined to 625.100 million shares from 45.714 million shares registering a decrease of 10.089 million shares or 22 percent.
The market made a strong opening, but soon came under pressure led by the banking sector reportedly because of failure of National Bank deal for sale of its holding in Bank Aljazeera following the lower bid. Subsequently, led by National Bank, the entire banking sector and exploration companies shares, the market remained under pressure throughout the session. However, brokers reported that some small banks like Bank Alfalah and Crescent Investment moved ahead, but at the close fell prey to pressure, resultantly the index closed in minus zone with a significant loss.
According to brokers, in view of last weekend rebound they were expecting further improvement in the market, but it disappointed everyone, especially those having holdings in banks and petroleum shares.
The market landed in minus zone few minutes after the opening that was positive, and then there was no let-up in pressure as people massively took to profit-taking, said Mirza Muhammad Irfan, equity research head of Capital Vision Securities Ltd.
Soon after the news that NBP deal with Bank Aljazeera had been put off on account of low bid, pressure built up in banks and in 15-20 minutes pressure surfaced in almost all key scrips, resulting in massive falls, he added.
He said that in addition to postponement of NBP-Bank Ajazeera deal, non-availability of investment in badla was a key factor adding to the market troubles.
Mirza Muhammad Irfan said out of Rs 10 billion CFS limit of LSE, the figure of the amount available was only Rs 2.97 billion. Despite availability of Rs 10 billion CFS limit, no one seems ready to invest in badla, which is a major problem.
Moreover, news that the report of March 2005 crisis was being presented before the NA standing committee on Wednesday was also a reason forcing people to squeeze their positions, he maintained.
How the market in future will behave depends on the said report. If brokers are blamed in the report for the March crisis, the market will definitely face pressure. Another important factor for the persisting problems is ban on short-selling in ready market due to which volume is very low. Until and unless short-selling is allowed in ready market there will be no smooth trading and turnover will further shrink, he added. Out of a total of 107 traded scrips, five improved their worth, 47 stayed in negative zone and 55 remained unchanged.
Major gainers were Crescent Standard Investment Bank, which gained 50 paisa, Hub Power Company 30 paisa, Pakistan PTA 20 paisa, Picic Commercial Bank 15 paisa, and Beema Pakistan 5 paisa.
In negative column, NBP shed Rs 14.65, MCB Bank Rs 11.50, UBL and PPL Rs 7.00 each and PSO Rs 6.05. Bank Alfalah and Bank of Punjab were the volume leaders with 4.083 million shares and 5.255 million shares, respectively.
Comments
Comments are closed.