Bearish trend was witnessed at the share market during the week ended on December 5, 2009 due to Dubai financial crisis and prevailing political, economic and law and order situation in the country. The KSE-100 index declined by 197.08 points, closing at 9,009.13 points.
However, average daily volumes at the ready counter increased by 23 percent to 97.442 million shares as compared to previous week's 79.476 million shares. This pickup was still sluggish when compared to previous three months' average of 202 million shares.
Market capitalisation declined by Rs 49 billion to Rs 2.609 trillion. Banks/DFIs, mutual funds and individuals were net buyers, while foreign investors were net sellers of shares worth $5.3 million mainly due to uncertainty in the political climate and the prevailing security situation.
The market remained closed on Monday on account of Eid. On Tuesday, the market opened under pressure due to Dubai financial crisis, which affected market sentiment negatively, and the index registered a massive decline of 193.17 points to close at 9,013.04 points with trading volume of 89.836 million shares.
On Wednesday, the situation improved slightly and some buying on dips was observed and the index recovered 74.66 points to close at 9,087.70 points, with 92.344 million shares trading.
On Thursday, the index gained a mere 8.53 points to close at 9.096.23 points, with 103.789 million shares. On Friday, the market once again remained under pressure due to security concerns and the index lost 87.10 points to close at 9,009.13 pints, with 103.799 million shares.
Sana Hanif, analyst at JS Global Capital, said that debt debacle that emerged in Dubai shook the financial markets globally. Though initially, some downward trend was observed in the international markets, a slight recovery was seen following Abu Dhabi government's statement to provide financial support to Dubai, albeit on selective basis. Local bourse took the impact after a lag as it was closed due to Eid holidays. Investors were initially concerned, particularly about UBL's exposure in Dubai, causing the stock to fall by five percent on the first trading day. However, after clarification from the management, selling pressure on the stock eased off.
No significant activity was witnessed in major sectors like banking, energy and fertiliser. Investors chose to stay on the sidelines as they were apprehensive about the impact of Dubai debacle on Pakistan's market. On the contrary, second-tier stocks, like BOK, Silk, JOVC, PASL and PRL were key performers.
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