Bulls tightened their grip on Lahore Stock Exchange during the week ended on February 21, 2009 and pushed the equities up by 6.45 percent account of investors' and institutional interest who kept on buying select scrips, particularly the blue chips following positive development toward peace in NWFP area and the encouraging financial results of the corporate sector.
The lSE-25 index moved up by 104.92 points to 1731.60 points from 1626.68 points, while trading volume increased to 117.66 million shares as compared to 82.391 million shares traded in previous week. However, the market could not maintain its tempo on weekend and fell down by 41.56 points.
Analysts attributed the decline on Friday to the directive issued by the Securities and Exchange Commission of Pakistan to the insurance companies asking them to reorganise the impairment in valuation of investment as of 31st December 2008. In experts view, the market had been kept on moving up for the four days and thus needed a technical correction to keep the bullish sentiments in current week.
The banking, oil, insurance, fertiliser and chemical sectors helped market stay in green zone and recorded visible gain to encourage the investors to stay on buying course. However, the portfolio sale also continued throughout the week under review that is evident from the depleting figures of special convertible rupee account (SCRA).
On Monday, the index showed an improvement of 52.86 points with trading of 23.176 million shares due to buying in Bank Alfalah, Bank of Punjab, National Bank, Askari Commercial Bank, MCB Bank and Habib Bank, PSO, Pak Oilfields, National Refinery, Fauji Fertilizer, Engro Chemical and ICI Pak. However, selling pressure was also seen in NIB Bank, PPL, Shell Pak, Bosicor Pakistan, Kot Addu Power, and Pioneer Cement, which closed with losses.
On Tuesday, the Tahrik-e-Nifaz Shariat Muhammadi accord to enforce Nizam-e-Adal in Swat and Taliban's announcement regarding cease-fire paved the way for market improvement as the investors welcomed both moves. Another factor that kept the investors' interest intact was relaxation in International Accounting Standards (IAS39) by the SECP. MCB Bank's pay-out to the shareholders was also taken as promising for the market future. The investors were also happy with the understanding between the two major political parties that was reflected from the results of the Senate poll's, as candidates from all major parties were declared successful unopposed.
On Wednesday, selling pressure on account of profit taking upset the sentiment during last trading hour, reducing the index gain to only 6.45 points. Analysts said that it was a technical correction that led the equities marginally down at the end of trading. The investors preferred offloading of their holdings to pocket the available margin.
On Thursday, a news regarding G P Morgan thinking over including Pakistan's bourses in its index geared up buying sentiment that kept the market in green zone and moved up by over 55 points with good amount of trading turnover. However, the investors were scared of participation of PML (N) leadership in the long march and sit-in in the federal capital that could create law and order problem in the country.
On Friday, the market succumbed of profit taking to lose over 41 points. Initially, the index curve showed upward movement but could not sustain and started declining. At the end, the market closed in red zone in the absence of buying support while all the blue chips companies. The SECP direction for the insurance companies was accounted for the selling pressure. The Adamjee Insurance led the equities downward and thus closed in red zone. The experts are of the views that market after correction could take upward turn in a day or two.
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