Bears strengthened their positions on the Islamabad Stock Exchange (ISE) where investors of Islamabad and Rawalpindi adopted cautious approach and offloaded their positions, as small traders and short-term margin hunters were confused over the issue pertaining to carryover trade. Analysts said on Sunday that last week ISE Network index remained under pressure owing to the Badla (COT) phase out issue.
The retail investors will decide about the investment in the leading stocks keeping in view the market sentiments on Monday (April 25).
Last Monday, market remained under stress owing to the discouraging outcome on Badla phase out issue between the SECP and KSE management. The negative sentiment continued to dominate on Tuesday as all blue chips recorded decline. On Wednesday, market opened with a negative note, but recovered owing to rumours regarding extension in Badla freezing date from April-29 to June-03.
PTCL led the index to recover. At the same time POL, Engro, ATRL performed owing to better than expected quarterly results announcement. On Thursday, the market remained firm owing to the final word received regarding badla COT extension from the SECP. Rounding up the week, the ISE Network index lost substantial points over the last week.
Analysts observed that with phase out of badla, the recovery at ISE is unlikely to be strong in the near term. It is advised to the investors to stay long in stocks that are under leveraged, have strong growth prospects, and are inexpensive on valuations. They recommended investment in Fauji Fertilizer, Askari Commercial Bank and Pakistan Oilfields.
The ISE Network index moved downwards from 12,425.03 points to 12,268.68 points during Monday-Friday last week. The overall turnover ranged between 15,40,400 and 28,73,400 shares. During the week, a total of 118-134 companies participated in trading activity.
During last week, the SECP and KSE exchanged several letters discussing the modalities of proposed badla phase out schedule. Due to this issue, impressive corporate results and institutional buying failed to lend support to the market. It was sixth consecutive week for the market to close after losses. Some corporate results were announced during the last week, but failed to bring buyers to the counters.
On Monday, ISE Network Index showed a decrease of 203.34 points and price-based indicator moved from 12,628.37 to 12,425.03 points.
The overall turnover amounted to 28,73,400 shares as compared to previous volume of 26,15,400 shares. Analysts said that stocks fell across a broad front on panic selling, triggered by the prevailing confusion over COT issue but there was no official word from the KSE about its meeting with SECP chairman on its proposal.
The panic selling gripped the entire market but the decline was led by the energy and cement sectors, which remained under pressure. The market sentiment was also influenced bearishly by reports that the fiscal measures in the new federal budget will have a provision to tax the speculators who have made massive capital gains in the share and property business.
On Tuesday, equities continued to show negative signs at the ISE where bulls failed to return on the driving seat amid decrease in index. The overall turnover amounted to 28,73,400 shares as compared to previous volume of 26,15,400 shares. Equities turned in a highly volatile performance amid positive and negative news over the extension or otherwise of the COT but till late in the session there was no official word on the issue.
On Wednesday, equities partially recovered and ISE Network Index showed an improvement of 65.52 points as the rate-based indicator closed at 12,196.02 points. The overall turnover amounted to 15,40,400 shares as compared to previous volume of 28,73,400 shares. Total 118 companies were quoted on the ready-board. 78 advances outclassed 40 losses whereas zero company remained pegged to its previous level.
Stocks staged a late recovery in response to an end of stand-off on the Carryover Transaction (COT) issue after the authorities accepted the KSE proposals on its phasing out, but the rally was too feeble to suggest that the worst is over. The market reaction to the end of COT issue, though positive, was well below analysts' expectations as leading investors stayed on the sidelines most of the time, awaiting fresh developments on the capital market.
On Thursday, ISE Network Index was plus by 72.66 points as the price-based indicator moved from 12,196.02 to 12,268.68 points.
The overall turnover amounted to 28,52,100 shares as compared to previous turnover of 15,40,400 shares. Total 118 companies participated in buying and selling activity. Majority of stocks (63) closed in positive territory, 54 showed negative signs while 2 companies remained glued to their overnight levels.