Bullish trend on LSE

The Lahore stock showed recovery on Thursday amid descending transaction volume following a decision taken by the Karachi Stock Exchange Board of Directors to cap the market at August 27 level with a view to restricting persistent downfall.
The LSE-25 index improved by 18.45 points and closed at 2875.95 against 2857.50 of Wednesday while trading turnover declined from last volume of 9.703 million shares to 5.755 million shares. Because of the Board's decision not a single company registered loss and all the shares closed on positive note. Shell Pak, MCB Bank, Engro Chemical, PPL, Pace Pakistan, PTCL, Pakistan Cement Company, and ICI Pak recorded gain and closed in positive zone.
The market opened on mixed sentiments and remained in the green zone throughout the day. Because of the ongoing political instability in the country and emerging of rift between the two major political parties, the market has been persistently declining for the last many days that put the investors under trouble. Finally, the KSE Board had to take decision to adopt artificial measures for checking free-fall.
Earlier, the Board has reduced the lower cap limit from five to one percent, which was later reversed to its previous cap of five percent, said Mirza Muhammad Irfan, Head of Equity Research while commenting on the market trend.
"Under the prevailing situation, the stocks market would have collapsed had the KSE Board not taken this decision", he said, adding the investors, because of the heavy losses they booked in recent past, can default. In case of the investors' default, the brokers can also come under trouble. The brokers are also scared of the present situation because the banks, because of the present scenario, have started asking the brokers to give bank guarantee to fulfil the margin requirement, he maintained.
Though, the Board decision provided temporary relief to the market, the situation would not be normalised until any positive development on the political front takes place, Irfan said.
He was of the view that because of high risk, the investors must avoid taking positions. Out of a total of 91 companies, 32 registered gains while values of 59 shares remained unchanged at their previous levels. Among gainers, Shell Pak improved by Rs 5.00, MCB Bank appreciated by Rs 3.83 while Engro Chemical and PPL were up by Rs 1.50 and 95 paisa respectively. NIB Bank remained the market leader with total transaction of 1.723 million shares.