THE LATE week recovery on world stock markets, after the turmoil caused by corporate frauds and bankruptcy of some of the US telecom giants failed to lure investors back into the market during the preceding week. Investors kept waiting for institutional support before resuming their covering operations.

A considerable decline in daily turnover figures, fractional price changes, absence of speculative support, and bargain-hunting all combined gave the market a big doze of sluggishness.

“Market lacks a definite direction being the victim of slackened demand and until the investors were not back again, trading may remain terribly insipid”, says a leading broker.

Earlier in the week, stocks lacked normal trading interest amid falling volumes as leading investors adhered to the sidelines, apparently discouraged by the bankruptcy reports of some major US MNCs, the corporate fraud and scandals, and on the fears of likely negative impact on local share market.

The situation was further aggravated in the absence of fresh stimulating corporate news, a terrible calm on the financial front and reluctance on the part of institutional traders to come to the aid of a featureless market.

But recovery staged by some of the major global markets at the weekend has raised hopes that the current sluggishness will be over by next week, as fears of an imminent collapse of some of them are now allayed.

However, announcement of the date for book closure (from Sept 24 to Oct 8) by the management of the Hub-Power enthused investors on the perception that the final dividend now, was not a distant possibility.

The KSE 100-share index finished around 1,783.05 points after fluctuating within a narrow range off 17 points and so did the total market capitalization at Rs416.741 billion, off Rs2.970 billion.

Price movements on the downside were mostly fractional and reflected that the correction was now overdone and the market could respond to its technical demand.

“Both bulls and bears have already tested their relative strength over the index level beyond 1800 points and both agree that it is a no-win situation at least for near-term”, said a broker commenting on the fractional change of about 10 points over the week. “Why you are fighting or wasting your financial resources on the non-issue”, he asks “spend it on new portfolio building to give the needed depth to stock trading”.

For last couple of weeks, the KSE index kept fluctuating within a narrow band of about 15 points as bears do not like to see it above the 1800-point level for unknown reasons. Bulls are not that weak but are chained by some negative external factors and political polarization.

The early run-up was caused by the announcement from the Hub-Power management that its share transfer books would remain closed from Sept 24 to Oct 8, which analysts said could well prove a prelude to a final dividend for the current year.

It has already paid an interim dividend of 70 per cent in May last, and general perception is that it could match the final with same figure. The final payout from it may be announced sometimes next month, they added.

Floor brokers said the market is expected to resume normal trading in line with the global bourses as fears of a big shake-out still haunts them and they are playing safe.

Energy sector is expected to get the needed boost as the government has announced to give Rs15 billion to WAPDA and the KESC to bail them out from the prevailing financial crisis. The PSO, which has been under pressure for the last couple of sessions responded positively to the report.

“I think the market has already digested the negative impact of bad news and is poised for a rebound alone on technical grounds”, one analyst predicts, “the index level beyond 1,800 points may now be not out of its reach, of course, on the strength of some positive basic fundamentals”.

Plus signs dominated the list after several sessions, major gainers being the Abbott Lab, the Dilon, the Pakistan Refinery, the International Industries and the Wyeth Pakistan, which posted gains ranging from Rs2 to 4.

Other prominent gainers were led by the Fecto Cement, the Pioneer Cables, the Lever Brothers, the Mitchell’s Fruits, the Kohinoor Raiwind, the PEL and Pak Elektron, the General Tyre, Dawood Hercules, the Island Textiles, Mehmood Textiles, and several others.

Losses on the other hand were fractional barring the Crescent Textiles, the BOC Pakistan, the Reckit Benckiser, the Shell Pakistan, the Shell Gas, the Treet Corporation, the Bhanero Textiles, Fazal Textiles and some others.

Trading volume again fell to a modest total of 291 million shares as compared to previous 409 million shares as the most current favourites lacked normal bouts of buying and selling. There was no massive activity either in the volume leaders.

However, the Hub-Power, the PTCL, the PSO, the National Bank, the D.G.Khan Cement and the MCB were modestly traded and accounted for about 70 per cent of the total volume. The ICI Pakistan, the Engro Chemical, the KESC, the ICP, the SEMF, the FFC-Jordan Fertiliser, the Southern Electric, the Sui Northern, the Pak PTA, and some others followed them.

FUTURE CONTRACTS: Bulk of the speculative activity remained confined to the PSO, which fell mostly. The PTCL and the Hub-Power on-balance, ended higher on large volumes. Others were modestly traded under the lead of the MCB, the Engro Chemical and the ICI Pakistan.