Bearish outlook on LSE

The local share market wore a bearish outlook on Wednesday where prices fell across the board, under the lead of petroleum sector, which remained under pressure throughout the day, with the benchmark index registering a sizeable loss of 2.15-percent amid retreating volume.
The LSE-25 index ended at 4537.83 points as against 4637.65 of Tuesday, registering a net loss of 99.82 million shares. There was also a downward movement in volume of transactions, which retreated to 24.740 million shares form previous 32.741 million, registering a decline of 8.000 million shares.
The downward trend continued throughout the day with petroleum and banking shares undergoing heavy battering. Initially, pressure was seen in both the sectors, but later other scrips also turned bearish, brokers said.
According to them, there were multiple factors for the ongoing bearish onslaught, including client-level netting issue, looming fears of US attack on Iran and above all pressure caused by foreign sellers. Foreign selling pressure was also a source of worries among the local investors, a broker said. Javed Omer Vohra and Co, and Honda Atlas were the key gainers while PSO and PPL in oil sector and NBP in banking sectors were the key recipient of losses. According to analysts, fear of client-level netting is gripping the market and that is why it has ignored the positive corporate results.
Growing fears of use of force against Iran by the United States and internal problems, ie client level netting are among the factors keeping the market sentiment constantly depressed, Umair Butt, Director, Dosslani Securities Ltd, said.
According to him, because of US threats to Iran, foreign investors have started off-loading, which has triggered panic among the locals too, he added. As far as the issue of client level netting is concerned it has practically multiplied problems form brokers/members and if enforced, would diminish working space for them, he said. If it is enforced members will have to increase their staff, which, in turn, will increase their cost. Apart from these reasons, overall downward trend in world markets had also a visible impact on the local market, he pointed out.
Client level netting and other measures being taken by the Securities and Exchange Commission of Pakistan (SECP) regarding regulatory framework is a 'game of big guns and an attempt to completely wipe out the small brokers,' he said. Members/Brokers are very much disturbed due to the hasty decisions of the SECP, and in case the regulator continues doing so without consulting the stake holders, days are no far when merger of small brokerage houses with big ones will become inevitable, he feared.
In all, 131 scrips changed hands, of which 21 improved in worth, 40 landed in minus zone while 70 stayed glued to their previous levels. Among major gainers, Javed Omer Vohra gained Rs 1.10, Honda Atlas Cars Rs 1.05, NIB Bank and Nishat (Chunian) Rs 0.70 each, while and Soneri Bank gained Rs 0.55. In red zone, PSO lost Rs 7.30, PPL Rs 5.80, Engro Chemical Rs 5.00, National Bank Rs 4.60 and Fauji Fertiliser Rs 4.00.
Bank Alfalah and Bank of Punjab led the market in terms of volume with 4.720 million and 4.512 million shares, respectively.