Share values scaled up and, despite immense pressure witnessed on Friday, made a net gain of 4.05 percent amid ascending transaction volume on Lahore Stock Exchange (LSE) during the past week, ended June 23, 2006.
The market continued trading the uphill course during the week under review and, led by banks, cements and petroleum sector depicted an outstanding performance that made people believe the impact of the 'crisis' was over now.
In view of the continuous rally, the market players also thought that all those who were awaiting settling down of the dust were re-entering the market gradually. But on last day of the week, the market turned highly volatile in view of uncertainty about the fate of Pakistan Steel Mills (PSM) and rumours about the restoration of short-selling in July futures.
The market shed its weightage taking the index down drastically, on that day. However, decision of the SC to undo the PSM sell-off and KSE board to maintain ban on short selling came after the close of the market, which averted a possible disaster, analysts said.
They further pointed that because of weekly holiday, the impact of these two important decisions may also not be much disastrous on Monday. Overall in five sessions of the week under review, the LSE-25 index gained 167.34 points or 4.05 percent, surging to 4,291.91 from 4,124.57 points. Turnover also was substantially up and reached 57.257 million shares compared with previous 35.729 million shares, posting a rise of 21.528 million shares or 60 percent.
The share market showed bullish signs on opening day of the week, with petroleum sector and banking stocks taking the lead, however, volume, which was not up to the mark, reflected lack of fresh buying interest. The LSE-25 index improved by 167.41 points or 4.05 percent, closing at 4,291.98 compared with 4,124.57 points.
Overall turnover slightly improved to 39.812 million shares from 35.729 million, positing a slight rise of 4.083 million shares. The market maintained the rising tempo throughout the day following short-covering, especially in petroleum shares and banks, with all key shares hitting their upper circuit breakers. However, uncertainty prevailed due to the ongoing process of data checking of brokers.
In oil sector, Pakistan Oilfields and in banking sector, National Bank were the key gainers. Equities recorded more gains on the second day, mainly on account of investors' interest in banking and petroleum sectors.
The LSE-25 index showed further improvement of 116.48 points, closing at 4,408.46 against 4291.98. Trading turnover increased to 57.281 million shares from 39.812 million shares. National Bank, MCB Bank, Bank of Punjab, PSO, OGDC, PPL, and Pak Oilfields led the market in upward direction. Share values moved both ways on Wednesday; but buying in banks and cements provided strength to market, enabling it to end with a positive note.
The LSE-25 index ended at 4,425.76 points compared with 4,408.46, closing with a marginal improvement of 17.30 points. Volume declined to 51.385 million shares from 57.281 million, registering a fall of 5.896 million shares. The market opened with a minus note and then mostly remained under pressure, due to pressure in oil and gas sector. Low volume showed that the market lacked participation of the players.
Share prices stayed higher on the forth day, while the index registered a fresh gain of 1.18 percent with further improvement in volume, indicating growing participation in the market. The LSE-25 index surged to 4,478.07 points from 4,425.76, posting a rise of 52.31 points. Volume increased to 57.986 million shares from 51.385 million, improving by 6.601 million shares. After opening with a bullish note, the market moved smoothly with fresh buying interest in selective chips that boosted the overall sentiment.
The market showed smooth performance while volume also improved showing improved buying interest. Banks and cements were the star performers while oil sector stayed mixed. Share prices fell across the board on last day of the week under review, amid various rumours, which kept the market in a highly volatile situation.
The LSE-25 index shed 186.16 points or 4.15 percent, closing at 4,291.91 as against 4,478.07. Turnover was almost steady to 57.257 million shares from 57.986 million. The market showed a highly volatile movement following various rumours, which forced it to move erratically. But, despite panic and volatility, the market rose up by150 points in first half of the session, in anticipation of restoration of short-selling for July futures.
Subsequently, pressure re-emerged, which curtailed the gain to 53 points at close of the first session. In the post-prayer session, the market fluctuated up and down sharply keeping investors in state of nervousness.
According to some analysts, the SC decision to declare the privatisation of PSM as void will send negative vibes in the stock market, and will affect the entire privatisation process of the government.
Moreover, it will shatter local as well as foreign investors' confidence in the government policies, they said. But others said the reaction of the SC decision will be pleasant and favourable on the country's stock markets. According them, the government might facilitate the privatisation of PSM now by public offering through stock markets, and if it is done, the move will have a very positive impact on the equity market. It will not only enhance the depth of the stock market, but would also improve the government image in eyes of investors, they viewed. However according to them, the KSE decision to continue ban on short-selling might disturb the sentiment and keep the volume on lower side.