Reacting to bad news from Wana and silence from the government on settlement of the issue of Capital Value Tax (CVT), share values underwent fresh losses on Lahore Stock Exchange (LSE) today (Monday), with the index moving down by 49.27 points, amid little improvement in trade volume. The LSE-25 index closed at 2590.64 points.
Volume, however, improved to 38.383 million shares from 32.583 million of the previous session registering an increment of 5.800 million shares.
In the beginning, the market showed positive signs but soon subdued following lack of support from key players and institutional buyers.
According to stock analysts, the market maintained its last week's trend and there was no change in attitude of key players, who are either side-lined or their interest has shifted to other businesses because of levy of CVT and withholding tax on share transactions.
The volume was slightly up, but still too below the desired mark, they viewed. The government-opposition row over the issue of uniform of the president, and military operation in Wana have further aggravated the situation in the market that was already in trouble waters due to CVT and phasing out plan of COT.
Ahmed Nabeel, head of operations from Invest & Finance Securities Ltd, said, apart from news of fresh casualties from Wana, delay in settlement of CVT issue was a chief factor for fuelling bearish spell in the market.
The market people were anticipating that after returning from Saudi Arabia Prime Minister Shaukat Aziz might take up the matter of CVT, but no development has taken place in this regard, which has disappointed investors and traders. Now the prime minister is in Tajikistan on a two-day visit, which means further delay in resolving the issue.
This also panicked the big players, who led to steep equity falls, he maintained. He described boom in real estate business key factor keeping the volume low.
However, he pointed out that investors had started squeezing their stakes from some of the residential schemes, but this capital is not coming in the market.
He said that now it is time to squeeze capital from the real estate business. "I do not think this time is appropriate for investment either in money market or real estate business."
Moreover, the stock market also seems sluggish till March 2005. But people are advised to buy petroleum shares in case the KSE index comes below 5,000 level, Nabeel observed.
"Today the KSE index broke the suicidal level 5,130, which caused panic in the market. The next suicidal level is 4,950 and after it is broken, the market could witness widespread losses," he pointed out.
Overall there were nine gainers against 33 losers with 43 remaining unchanged, out of a total of 85 traded scrips. Among key gainers, Macpac Films was up Rs 2.50, PIAC Rs 0.50, Fauji Fertiliser Rs 0.45, Lucky Cement and Worldcall Communications Rs 0.20 each. In minus column, Pakistan Industrial Credit and Union Bank shed Rs 2.60 each, Nishat Mills Rs 2.05, National Bank Rs 1.70 and PSO Rs 1.50. Bank of Punjab and DG Khan Cement came out as volume leaders with respective turnover of 8.727 million and 4.715 million shares.