Stock market plummets

The Karachi share market declined sharply during last week ending on November 11, 2006 and the benchmark KSE-100 share index lost 507 points, or 4.5 percent, on week-on-week basis and closed at 10739 points level. The KSE-30 index lost 700 points to close at 13173.49 points level.
The market was under pressure from the beginning of the week with the news that National Bank of Pakistan (NBP) was unable to finalise a deal to sell-off its 5.83 percent stake in Bank Al-Jazeera though the management stated that they were still attempting to negotiate deal at market price.
Another reason influencing the market was the submission of investigation report regarding KSE March 2005 crisis before the National Assembly Committee by SECP on November 13. However, some support was given to the market with talks on the potential listing of PTCL on Dubai Stock Exchange.
The market remained closed on Thursday on account of Iqbal Day and on Friday it suffered fresh falls as the Board of OGDC refused to endorse the GDR plan until it was given govt protection for all risks associated with the offering.
Positive factors like enhancement of CFS limit from Rs 24.5 billion to Rs 55.0 billion along with an increase in CFS eligible securities to 71 scrips from earlier 32 were unable to bring positive sentiment in the market as some technical issues created hurdles in their full implementation.
Analysts at KASB Securities said that the investors chose to play it safe and stayed on the sidelines all the week amid all the noise created by the impending release of the investigation into the March 2005 crisis and the uncertainty regarding the procedure to shift from in-house badla to the new CFS regime.
Atif Malik, analyst at JS Research, said that the share market remained under selling pressure throughout the week due to news regarding submission of investigation report by SECP on March 2005 market crash before the National Assembly Standing Committee on Finance and Revenue. However, the SECP, after the end of last trading session on Friday announced that this has now been delayed.
After a four months' ban, short selling in stock futures was also allowed during the week at KSE and due to this short selling low spreads (cost of carryover) between ready and future markets were witnessed.
The market opened on a positive note on Monday and the KSE-100 index hit 11298 points intra-day high. However, bears gradually tightened their grip to mark 11009 points intra-day low. Heavy profit taking was observed in the market on reports regarding completion of forensic investigations of KSE March 2005 crisis and its upcoming presentation before the National Assembly Standing Committee.
On Monday, the KSE-100 index lost 234 points to close at 11012 points.
On Tuesday, the KSE-100 index initially gained 67 points rising to 11078.72 points level. But soon after it took a steep plunge to 10740.30 points level. Investors found it to be a reasonable level to re-enter the arena and began accumulating taking the market upward and just kept it afloat by closing 5.11 points up at 11017.51 level.
The market remained highly volatile on Wednesday and moved in the range of 10854.20 to 11030.69 points level. It remained under pressure throughout the day with KSE-100 index losing 44.43 points to the 10973.08-point level. Most of the investors remained on sidelines due to concerns over investigation report on the March 2005 crisis.
Thursday being a holiday on account of Iqbal Day, the market opened on a negative note on Friday and lost 151 points by the end of first session on news regarding refusal by OGDCL Board to sign GDRs plan agreement and that the forensic investigation report would be presented before the National Assembly Standing Committee on November 13.
The second half started with a quick recovery, of approximately 40 points, on the back of buying in PTCL. However, due to late selling pressure the KSE-100 index once again plunged and closed near its intra-day low of 10739 points. Finally, the KSE-100 Index plummeted 233.63 points on the last trading day.