Equities moved roller-coaster on Lahore Stock Exchange (LSE) during the last week ended September 30, and failed to settle down mainly on account of unmatchable rumours regarding pending matters between Pakistan government and Etisalat with regard to the PTCL transaction process.
In initial two days the sentiment, though was bullish, overall activity remained dull following lacking interest on the part of big players as well as institutions.
According to stock brokers, fear regarding liquidity crunch was there, as uncertainty regarding a permanent solution to the badla financing issue still existed. This situation is particularly disturbing for jobbers and punters whose role is of prime importance in the capital market world over. However, they pointed out that the market is in no way in troubled waters, as its fundamentals are strong due to very encouraging results of corporate sector which has discounted to a greater extent the impact of various negative factors including law and order problem, SECP restriction on broker-to-broker transaction and rumours of PTCL sell-off process. The LSE-25 index showed a net rise of 10.02 points or 0.24 percent mounting to 4051.38 points from 4041.36 points. Overall turnover declined to 62.608 million shares from 68.177 million shares, registering an increase of 5.569 million shares or 8.16 percent.
On the first day of last week, the market, with active buying support from fertilisers, cements and banking stocks, climbed, however, trade volume remained on the lower side.
The LSE-25 index surged by 13.13 points or 0.32 percent to finish at 4054.49 points as compared to 4041.36 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 week under review resumed with a positive note and in initial hours, the index moved up sharply following buying interest in selective chips.
However, later pressure surfaced due to confusion over the reports regarding ban on broker-to-broker business in the market with effect from October 01, 2005, reportedly in order to make trading more transparent and curb systematic risk. Engro Chemical, D.G. Khan 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 also attracted fresh buying on unconfirmed reports that Etisalat had made payment for PTCL.
Led by PTCL, equities moved downward amid selling pressure on second day of the week under review on account of lacking interest on the part of investors whose expectations from PTCL could not be fulfilled due to nil dividend announcement.
The LSE-25 index marginally declined by 9.35 points, closing at 4045.14 against 4054.49 of Monday, while trading volume increased to 70.480 million shares due to selling pressure, as compared to 57.213 million shares traded a day earlier. PPL from oil sector, D.G. Khan Cement, Pioneer Cement, Maple Leaf Cement and Lucky Cement from the cement sector and Fauji Fertiliser Bin Qasim helped market resist more declines, while PTCL, PSO, Sui Northern and MCB Bank remained under pressure and closed in negative zone.
Equities were sideways on the third day (Wednesday), as the index, after observing up and down fluctuations, ended with a bullish note, but overall trade turnover remained on the lower side.
At close of the day's trading, the LSE-25 index stayed at 4048.81 points as compared to 4045.14, posting a slight rise of 3.67 points. Trade turnover lowered to 64.742 million shares from 70.480 million of the previous session, registering a decline of 5.738 million shares. Amid various rumours regarding delay in payment to PTCL by Etisalat of UAE and former's weak results, the market remained under pressure most of the time. However, buying interest in selective chips in late session helped the index pick up to close on a positive note, but with a marginal improvement.
Late selling pressure on second last day of the week, played havoc with the equities, which, led by PTCL, underwent battering, while the index ended with 1.15 percent loss amid descending volume. Responding positively to the news of one-month extension period for completion of PTCL privatisation process, the market opened with a happy note, and initially people witnessed good trading.
However, later the news regarding PTCL-Etisalat deal appearing in a foreign newspaper proved damaging for the market. According to the news appearing in local papers, PTCL privatisation will be completed by October 28, 2005 while report of a UAE paper said that Etisalat was seeking pullout of the deal with the Government of Pakistan.
PTCL was the key victim of selling pressure followed by fertiliser and cement stocks while Pakistan Oilfields, UBL and National Bank were on the declining end. Share prices took a positive turn on the last trading day of the week, following fresh buying interest in banks, cements, fertilisers and PTCL, leading the index 1.23 percent up with declining transactions volume. The LSE-25 index improved by 49.43 points to 4051.38 from Thursday's 4001.95 points.
Volume was down by 13.458 million shares to 62.608 million as compared to 76.067 million shares of the previous session. The market opened with a positive note on the basis of fresh buying in fundamentally strong and dividend-oriented shares such as banks, cements, fertilisers and partially in petroleum sector, kept moving in upward direction.
There is no threat to the market as far as fundamentals are concerned, stock analysts said, adding corporate results of banks and cement sectors have significantly added to the bullish sentiment of the market, analysts said. Etisalat has reportedly denied reports appearing in a UAE based newspaper regarding pullout of the deal of PTCL thus the market is expected to perform better during the upcoming week, they viewed. Moreover, they maintained, oil sector, especially PSO, will get boost from fresh increase in prices of petroleum products in the domestic market.
The recent hike in petroleum prices will enhance the profitability of oil marketing companies; therefore, its impact might be seen particularly on PSO in the week ahead, analysts observed.