LSE under pressure

Share prices came under pressure again on Wednesday, as pressure emerged in key banks and petroleum scrips following profit-taking, leading the market to undergo a net loss of 1.10 percent. The LSE-25 index fell to Rs 4,520.28 points from 4,570.95 of Tuesday, registering a loss of 50.67 points or 1.10 percent.
Volume, however, remained on the higher side and was registered at 28.836 million shares as compared to preceding session's 23.227 million, incremented by 5.609 million shares or 24 percent. The market opened with its overnight bullish note, but soon came under pressure due to lacking interest from potential investors. Subsequently, bears dominated the proceedings and finally the market ended with a negative, brokers said. The volume was slightly higher, but brokers said it was still very disappointing because of uncertainty prevailing because of postponement of the forensic report and new exposure rules. Under the given situation, potential inventors' interest is minimal in the market, they stated. Key chips in banking and exploration sectors, including MCB Bank, National Bank, PPL and OGDC retreated. Engro Chemical and some scrips in automobile sector, however, attracted fresh buying and ended with positive note.
The market sentiment is depressed mainly due to issues regarding brokers' reservations about new exposure rules, and growing uncertainty over postponement of presentation of forensic report on March 2005 crisis of stock markets, before the NA standing committee, Mirza Ejaz Ullah Baig, director of Capital Vision Securities Ltd said. With enforcement of new risk management rules, exposure will rise by almost three times and resultantly business activity will further shrink. The proposed rules will also eliminate the level playing field between big and small brokers, he observed. Although in last meeting, enforcement of new exposure rules had been deferred by December 04, 2006 and both SECP and brokers had agreed that the latter would give fresh briefing to the regulator on the issue and if need was felt, the exposure limit will be revised, he pointed out. Now stock exchanges' representatives are expected to brief the SECP on the subject in a week or two, he said.
Meanwhile, deferring the decision of presenting March crisis report in the standing committee has triggered fresh wave of uncertainty among the market players, he maintained. The report has been sealed for the time being. Moreover, frequent changes in rules and regulations in the name of reforms is also a major source of confusion and shattering the confidence of investors, he concluded.
In all, 115 scrips changed hands during the session, of which 22 stayed bullish, 34 negative while 59 were unchanged to their previous closing levels. The day's major gainers included Engro Chemical, surging by Rs 2.00, Pakistan Industrial Credit Rs 1.55, Attock Refinery Re 1.00, Dewan Farooq Motors Rs 0.95 and PICIC Commercials Bank Rs 0.90. In minus column, MCB Bank shed Rs 5.90, PPL Rs 3.45, National Bank Rs 3.00, OGDC November Rs 2.10 and Oil and Gas Development Company Rs 2.00. Bank Alfalah and Bank of Punjab dominated the proceedings by volume, with 4.313 million shares and 2.794 million shares, respectively.