February 10, 2003	Monday	Zul Hijjah 8,1423

Stocks finished with an extended fall during the last week as attempted mid-week rallies failed to get through in the absence of strong follow-support from the financial institutions and general investors.

Whether the market is passing through a consolidation phase or the bulls have decided to opt for an honourable exit is unclear, the mounting casualties they are leaving behind could work against the underlying sentiment in the sessions to come.

But some analysts claim the market is standing on sound footing based on some basic positive factors and the possibility of big sell-off appears to be remote sans the US attack on Iraq.

The KSE 100-share index suffered a fresh setback of 63.63 points after more than one time breaching through the barrier of 2,500 points, but failed to sustained it. It was finally quoted at 2,481.44 as compared to 2,545.07 a week earlier. The market capitalization also fell by Rs12.272b at Rs549.505 as compared to Rs561.777 last week.

The market, however, as a whole passed through a sluggish trading week as investors took a technical pause apparently in a bid to decide their future line of action in the backdrop of developing Iraq situation and its likely impact on the local stock market.

Positive signals about the resumption of India-Pakistan talks after President Pervez Musharraf’s Russia visit did evoke a good bit of covering purchases on the selected counters, but the market as a whole remained highly volatile.

Higher interim profit of about Rs3 billion announced by the Hub-Power board in its Lahore meeting for the half-year ended December 31, 2002, generated active short-covering in its share, but no sympathetic buying on the other blue chips, keeping the broader market in a state of uncertainty.

“I don’t think investors will make larger fresh commitments ahead of the Eid holidays,” analysts said, adding “the post-Eid holiday trading sessions will reflect the mood of bulls or bears, both of which are now terribly silent.”

The Hub-Power was again the major target of alternate bouts of buying and selling, which alone accounted for about a half of the total volume amid conflicting reports about the dividend. It touched the highest at Rs35.15 and the lowest at Rs33.15 before recovering in the post-profit sessions.

The PTCL on the other hand received massive battering in the absence of support at the falling prices, and at one stage took the index as low as 104 points because of its weightage of 33 per cent.

Earlier, the market crash was further accentuated as bears intensified their sell-off and in the absence of matching support or covering purchases from any quarter prices maintained their downward drive. Although the early week reports of bomb blast in a city posh area did trigger panic selling from already shaky investors, the late buying allowed the market to finish partially recovered.

The KSE 100-share index breached through the barrier of 2,500 at one stage, but failed to sustain this level on late selling. It fell about 500 points or 20 per cent during the last about one week after having touched its career-best level of 2,955 points during the third week of the last month, and where it will find its sustainable level is still unclear.

“The persistent decline in the index reflects that the ghost investors are leaving the market progressively,” says a leading stock analyst, adding “but it is intriguing to note that cash heavy institutional traders are watching the market fall without intervening.”

The market is heading to prove that the January price flare-up was speculative rather genuine, and the question being asked in the trading hall is that “how some of the basic positive fundamentals will work in the future share trading.”

“I don’t think investors have the will or the perception to buy at the dips,” says a leading broker. “Everyone is awaiting the level at which bulls led by the financial traders strike back.”

All the bulls and the leading investors seem to have turned into an active bears as was reflected by the falling prices, but no significant buyer even at an attractively lower levels attained by most of the blue chips.

Most of the overvalued shares, notably in the energy, chemical, auto and food sectors remained under pressure and finished with sharp extended fall partly because of the absence of leading bulls.

Big losers were led by the Javed Omer, the Attock Refinery, the National Refinery, the Pak-Suzuki Motors, the Abbott Lab, the Engro Chemical, the Pakistan Refinery, the Pakistan Oilfields, the PSO, the Dawood Hercules, the BOC Pakistan and the Shell Pakistan, although some of them managed to finish partially recovered on late buying.

Other leading shares, including the Adamjee Insurance, the Noon Sugar, the Mari Gas, the Bannu Woollen and the Wyeth Pakistan and some others, also fell.

Some of the leading shares, notably the Al-Mal Securities, the Arif Habib Securities, the Crescent Bank, the EFU Life Insurance, the Mehmood Textiles, the Fauji Fertilizer, the Al-Ghazi Tractors and the Unilever Pakistan came in for the modest support. And did the Siemens Pakistan at the weekend session.

The trading volume fell sharply owing partly to a closure on account of “Kashmir day” and the absence of strong demand from any quarter. It fell to 705 million shares from the previous week’s about 2 billion shares.

The Hub-Power, the PTCL, the PSO, the FFC-Jordan Fertilizer, and the Sui Northern were among the most actives, followed by the MCB, the National Bank, the Fauji Fertilizer, the Engro Chemical, the ICI Pakistan, the Pak PTA, the KESC, the Dewan Salman and several others.

FORWARD COUNTER: Bulk of the alternate bouts of buying and selling remained confined to the Hub-Power and the PTCL followed by the Engro Chemical, the Fauji Fertilizer and the FFC-Jordan Fertilizer. The Sui Northern Gas, the PSO and some others were also actively traded. Price changes were in line with their counterparts in the ready section being on-balance on the lower side.—Muhammad Aslam