With active buying support from fertilisers, cements and banking stocks, share prices increased on Lahore Stock Exchange (LSE), however, trade volume remained on the lower side.
The LSE-25 index surged by 13.13 points or 0.32 percent to finish at 4,054.49 points as compared to 4,041.36 of the preceding session. Volume slipped back to 57.193 million shares from 68.177 million shares posting a fall of 10.984 million shares or 16.11 percent.
Trading on first day of the week resumed with a positive note and in initial hours, the index moved up sharply following buying interest in selective chips. However, later pressure surfaced on account of confusion over the reports regarding ban on broker-to-broker business in the market.
According to reports, the Securities and Exchange Commission of Pakistan (SECP) has decided to prohibit stock brokers to transact business from fellow brokerage houses, in order to make trading more transparent and curb systematic risk. The decision will come into force from October 10, 2005. Engro Chemical, D.G. Khan Cement and National Bank were the key performer of the day, while PSO was the major victim following anticipation of cut in margin of oil and marketing companies (OMCs). PTCL on Monday also attracted fresh buying on reports that the Etisalat has made payment to it.
Mirza Ejaz Ullah Baig, Director of Capital Vision Securities Ltd, said that on account of high rate of shares, the problems of exposure occurs, which ultimately resulting in selling pressure in the market. However, the current trend is very bullish with an overwhelming interest in banks whose profitability has grown manifold following increase in the rate of interest. During the last couple of years, the interest rate witnessed a lot of fluctuation, moving down from 24 percent to 2.5 percent. Similarly, because of high inflation, which is 15 percent as against the government claims, the rate of Kibor mounted up followed by increase in banks interest rate, he explained. Interest rate is once again on the higher side that has enhanced the profits of banks, he added.
"In my view, banks still look very bullish especially, Bank of Punjab, National Bank and MCB," he said. According to him, cement sector also seems good in view of its high demand. Moreover there is also a lot of potential in insurance sector, particularly in the companies doing general insurance business, he pointed out. "On the basis of above said factors, I am foreseeing a very rosy picture of the market, with investor's special interest in the scrips such as oil & gas, textiles, banks and cement stocks, Mirza Ejaz Ullah Baig observed.
Out of a total of 84 traded scrips, 28 were up, 16 landed in minus zone while 40 were intact to its previous levels. Among key gainers, Engro Chemical was up Rs 2.80, D.G. Khan Cement Rs 2.45, National Bank Rs 2.40, Dewan Farooq Motors Rs 1.20, and Pakistan Telecommunication Rs 1.10. In minus zone, PSO shed Rs 2.55, Adamjee Insurance Rs 0.90, OGDC Rs 0.90, PPL Rs 0.85 and Pioneer Cement Rs 0.70.
PTCL and DG Khan Cement led the proceedings by volume with 13.464 million shares and 11.504 million shares, respectively.