The Lahore share market during last week ending on February 23, 2008 took a sharp turn and gained 6.52 percent to welcome the general elections results, raising hopes for formation of a democratic political set-up in the country.
Since the government had declared public holiday on election day, there was no trading on the Lahore Stock Exchange (LSE) on Monday. When trading resumed on Tuesday, the market saluted the caretaker government's efforts to hold 'peaceful and to some extent fair election'.
Bulls' onslaught also prevailed in the subsequent sessions and following a renewed buying spree the equities scored across the board fresh gains, they added.
Overall, the LSE-25 Index gained 301.89 points (6.52 percent) to finish the weekend at 4,928.56 compared with past level at 4,626.67 points. Volume improved by 6.853 million shares (25 percent) to reach 34.124 million from previously traded at 27.271 million shares. Although a few incidents of violence occurred in which, according to the official reports, eight people lost their lives, overall law and order situation remained peaceful on the election day and this was also an important factor encouraging investors to go for fresh buying.
The sentiment remained highly bullish amid hopes of a strong and stable government set-up in the country. However, on last day of the trading week, activity stayed dull, which the analysts attributed to the routine weekend pressure and market people's preparations for the rollover for the March futures. Volume on that day was comparatively low, which indicated lack of interest from the big players, particularly the institutional side.
Analysts forecast good future of the market with oil and gas sector, banks and fertilisers giving good yields to investors. However, they said that activity could remain slow till formation of a new government set-up.
A strong and stable government with a viable economic programme was need of the hour to attract investors, not only in the stock market, but also in other sectors, analysts said. They viewed that the future government should not indulge in confrontation and good economic policies of the previous regime should also continue.
If Nawaz-Zardari alliance remains in tact for a longer period and the coalition governments in the Centre and the provinces keep functioning smoothly, the market will continue moving upwards, brokers said. Political stability and peaceful atmosphere is also s pre-requisite for foreign investment, an analyst said, adding that in wake of the election there are reports of foreign investment inflows. During the week under review, SCRAs increased by around $42 million, which means foreign funds are returning gradually.
Apart from political front, market people are also upbeat about the corporate results and good earnings of the companies will further push forward the market, brokers said. If all remains well on the political front, the market is likely to add at least 2,000 points to its strength by end of the calendar year, with the KSE index going beyond 17,000 points level, a broker at a leading house said.