Stocks turned into a highly volatile performance last week as both positive and negative news followed in quick succession, not allowing the investors to refix their investment priorities.

The notable destabilizing factor was the assassination of a prominent religious leader, while doubts about the final bidding date of the PSO also worked against the underlying sentiment as its weakness spilled over to other counters, including the leading energy shares.

However, the larger decline was resisted as institutional traders were back in the market towards the fag-end of the trading week and resumed their covering purchases at lower levels on the selected counters. The Hub-Power was notable among them on the reports that its board had approved the gas-fired 300mw power plant near Karachi.

The negative fallout of the assassination of Azam Tariq, a Parliamentarian, however, dominated the trading as investors withdrew to the sidelines awaiting further developments on the law and order front.

The daily volume figures kept shrinking in each session, reflecting the absence of big ones, while both the KSE 100-share index and the market capital fell from their current all-time peak levels. There was, however, no hasty selling but unforeseen panic was present.

The KSE 100-share index fell to 4,143.34 from 4,192.39 points and the market capital to Rs895 billion from the previous week’s Rs920.581 to Rs904 billion.

“There was no change on the financial front as there was no pressure on the liquidity. Bank rates were low and good corporate announcements were daily pouring in, enough to stimulate fresh buying,”, said a KSE member.

He continued, the absence of financial institutions appears to be the chief reasons behind the current sluggishness as retailers and speculative forces followed them apparently on hopes of the return of a prodigal son.

“I don’t think the market’s upward thrust was overdone, investors would be back in rings after having participated in the partial sell-off of the National Bank and the Oil and Gas Development Corporation (OGDC) shares’ within this month”, he added.

Bulk of profit-selling remained confined to the overvalued

shares, notably energy, auto, cement and fertilizers sectors, which partially reacted to finish below historic levels.

There was confusion after the trading resumed as weakholders and short-term dealers hastened to get out of the market after indulging in hasty selling fearing a violent reaction by the followers of the slain leader. The situation was further aggravated in the absence of matching buying offers at the falling prices.

However, sanity returned to trading after the mid-week followed by the reports of a relative calm in major city areas, although shops remained closed in some localities but sans violence.

The market’s early nervousness was also well-reflected in the erratic movements of the KSE 100-share index. After opening down, it steadily recovered a good part of the initial losses but the mid-session again saw it in the minus column on selling followed by the reports of tension in the city.

“Whether or not it was a sectarian killing was yet to be ascertained”, one broker commented on the assassination of Azam Tariq adding, “but it was made to look so by some leading analysts after linking it with the chain of previous sectarian killings”.

However, the market’s inherent strength averted any major fall as in most cases only extreme gains could be warded off but the fear of law and order situation was there. What worried the investors was the assassinated leader’s following and the street power he wielded which could create law and order problems in the next couple of session.

“The steep decline in the traded volume apparently reflected this perception as both the bulls and the bears maintained a status quo awaiting further developments on the law and order front rather than indulging in hasty liquidation”, brokers said.

But some others hoped the situation was expected to be normal during the next couple of days as investors would be back in the market on the strength of an ambitious disinvestment programme.

“The market was rife with rumours that the final bidding date of the PSO was expected to be announced possibly by the next week as one of the Kuwaiti strategic buyers had indicated to sort out some financial matters with the local officials before that”, analysts said. It rose by another Rs7.40, making the total gains during the last couple of sessions to Rs20.

The third tranche of 13.131 million shares was also being sold on Oct 13, followed by 215 million shares of the OGDC at Rs46 and 32 per share, respectively.

Most price changes were fractional as the leading investors were not inclined to ride the bandwagon of bears without having taken an objective overview of the developing political scenario and mostly played safe enabling the market to avert major decline.

The IGI Insurance and the PSO, which rose modestly were leading among the gainers followed by the MCB, Jahangir Siddiqui Bank, the EFU General, Babri Cotton, Kohat Cement, Pak-Suzuki Motors, Abbott Lab, Murree Brewery after the dividend and bonus shares at the rate of 20 per cent each.

Losers were led by the Grays of Cambridge and Javed Omer, off Rs14.95 and 26.45, respectively. Other prominent losers included the Shell Pakistan, Mehmood Textiles, Indus Motors, Millat Tractors, Dawood Hercules, Reckitt and Benckiser, Treet Corporation, Wyeth Pakistan and several others.

Trading activity fell sharply below one billion share market owing to the absence of the financial institutions and the leading investors and retailers.

The Hub-Power, the PTCL, the PSO, the D.G.Khan Cement, Lucky Cement, Dewan Salman, Pak PTA, Fauji Cement, the MCB, Sui Northern, Maple Leaf Cement and the FFC-Jordan Fertiliser were leading the active.

FORWARD COUNTER: Bulk of buying interest remained confined to the PSO on the hopes of its final bidding date followed by the Hub-Power, the PTCL though both fell on-balance. Dewan Salman and the Pak PTA managed to finish modestly higher and so did some others but the ICI Pakistan, Engro Chemical and Fauji Fertiliser remained under pressure on selling.—Muhammad Aslam