Equity prices drifted lower and received heavy battering with five percent net loss in the index following squeezing positions by brokers and investors, primarily due to worries over the enforcement of new risk management measures from November 6 on the Lahore Stock Exchange (LSE) during the last week ended on Friday.
The market remained under selling pressure for four consecutive sessions on row between the Securities and Exchange Commission of Pakistan (SECP) and the brokers with regard to new risk management measures. However, it recovered on fifth and last day of the trading week, after consensus on the contentious issues reached.
Investors awaiting the outcome of the negotiations between the SECP and the brokers staged good comeback, due to which, the index, earlier plunging to below 5,000 points level, partially recovered, brokers said.
The LSE-25 index closed at 4776.24 points compared with 5031.21 of the previous closing, registering a net loss of 254.97 points or 5.06 percent. Volume improved to 45.714 million shares from 38.236 million shares, increasing by 7.478 million shares or 19.55 percent.
However, according to analysts, the game once again was between big players and their row with SECP was not a sufficient factor for the post-Eid falls. Before Eid, the market staged sharp rallies and the index breached all psychological levels despite the fact brokers were aware about the implementation of the new risk management measures from November 6, an analyst said. Big-wigs of the market have once again shown their strength and forced the SECP to succumb to their pressure, he remarked.
Share prices staged retreat from pre-Eid level following heavy profit-taking, especially in key petroleum scrips and cement sectors, resulting in a loss of over 100 points, on first day of the week under review. The LSE-25 index closed at 4930.29 points compared with previous 5031.21 points, registering a loss of 100.92 points. Volume, however, moved in upward direction, ending at 48.671 million shares as against 38.236 million shares, showing an improvement of 10.434 million shares.
The market showed positive signs when trading resumed, but soon came under pressure as people booked profits, particularly in oil and gas sector and cement stocks. However, some of the brokers attributed the falls to news of killings of scores of people in an air strike at a Bajour seminary by forces.
Bearish trend prevailed for the second consecutive day on Tuesday, as equities registered losses under the lead of blue chips on account of lack of interest on the part of investors. The LSE-25 index fell down by 98.31 points closing at 4831.98 points against 4930.31 points, while transaction volume marginally improved to 48.771 million shares as compared to 48.671 million shares. National Bank, MCB Bank, PPL and OGDC remained under pressure that pushed the market into negative zone while PTCL, Crescent Commercial Bank and Fauji Cement resisted the declines.
The bearish onslaught also continued to mar activity for third straight session on Wednesday while oil and gas sector led the losses. The LSE-25 index finished at 4666.84 points versus 4831.98 points, registering a net loss of 165.14 points. Volume also declined by 11.290 million shares to 37.480 million from 48.771 million shares.
The market witnessed yet another major decline on Thursday as people awaited the outcome of the SECP-KSE meeting scheduled for the day in Islamabad to discuss the issues relating to enforcement of new risk management measures. The LSE-25 index fell by 46.86 points to close at 4619.98 points as compared to 4666.84 points. Volume further squeezed to 28.374 million shares from 37.480 million shares, registering a fall of 9.106 million shares. Shares were again on declining path as rumours for increase in margins for ready market continued dominating the proceedings. There was an across the board pressure in the market and no-let up was seen in it at any stage during the session. There was, however, some restricted movement in selective cements, banks and PSO, but even then bearish sentiment prevailed unabated.
Share values rebounded on Friday following positive outcome of Thursday's SECP high-ups meeting with brokers to settle the outstanding issues of new risk management measures. The LSE-25 index surged by 156.26 points reaching 4776.24 points compared with 4619.98 points. Volume improved to 45.714 million shares from 28.374 million shares of the preceding session, increasing by 17.340 million shares.
The way the market reacted to the news of settlement of outstanding issues between the brokers and the SECP about value at new risk management system, there seems the rally will prevail in the coming week, exporters said.
The market witnessed a roller-coaster behaviour in four sessions, but recovered on the weekend taking the index sharply in upward direction. Of 411 points, the market recovered 156 points in one session in the week which means bulls could dominate the market in the coming few sessions, he viewed.
OGDC that suffered massively in the bear onslaught in the week under review due to foreign selling pressure may come again in spotlight. The banking sector also seems very attractive in view of good results of the first quarter, but people should be careful and avoid investing in low profile scrips, he added.