September 12, 2006	Tuesday	Sha'aban 18, 1427

KARACHI, Sept 11: Trading volume on the stock market on Monday shrank further to 60 million shares, as leading investors remained conspicuous by their absence owing to heating up of the political scenario and liquidity crunch. The KSE 100-share index was off 72.44 points at 9,892.77 points.

But some leading analysts said investors awaited the outcome of reported ongoing meeting between officials of the SECP and the KSE on some of the current issues before making fresh commitments.

Leverage problems, ban on short-selling and cut in scrips to a half to be eligible for the forward counter by the next month, which are affecting normal trading, are said to be on the agenda of talks.

No one could precisely spell out the immediate inhibiting factors behind the current sluggishness but common thing among all appears to be a future bearish outlook despite positive news from the corporate front, including higher interim dividend and bonus shares.

“The ban on short-selling on the forward counter is said to be one of the major demands of the investors, which in their opinion could boost trading both in the ready forward counters,” says a leading stock analyst Ahsan Mehanti. “But the SECP has its own perceptions about the issue and is trying to make it more acceptable to all.”

Trading resumed on a terribly sluggish note as both leading investors and financial institutions kept to the sidelines owing to developing political situation and allied perceptions about the future uncertainty.

“The developing situation could well prove a lull before the storm if the big ones did not loosen their tight grip on the market,” analyst Hasnain Asghar Ali said. “Political situation is certainly tense but has not reached the danger point so far.”

But some others attributed the sluggishness to some technical factors, including the outcome of rumoured SECP-KSE talks on some of the steps aimed at boosting stock trading.

Essentially sensitive to negative political developments, punters and speculative traders generally play safe and re-enter the market after some positive pointers lure them to pick up leading shares at the lows.

The KSE 30-share index fell by 88.52 points and 100-share by 72.44 points at 12,339.54 and 9,892.77 points, respectively, as all leading base shares reacted to finish lower under the lead of MCB Bank, OGDC, National Bank, Pakistan Petroleum and Pakistan Oilfields.

An idea of a impending sluggishness and buying support may well be had from the fact that the turnover figure further shrank to a modest total of 60m shares, far below a single-session tally of an active scrip.

Although it is still well above the lowest ever single-session figure of 15m and 17m shares hit in 2001 followed by implementation of T+3 trading system on the KSE and the US attack on Afghanistan, respectively, the current shrinking investor interest is linked to political uncertainty and leading punters’ reluctance to cover positions at the attractively lower levels.

The broader market led the decline as investors sold in part long positions where margins of profit were still intact and purchased some low-priced and undervalued shares for future capital gains.

Bata Pakistan and Jahangir Siddiqui & Co were leading among the gainers, up Rs6.05 and Rs4, respectively, followed by Atlas Battery, Shell Pakistan, Cherat Papersack and Pakistan Resources Company, up by Rs2.50 to Rs4.

Losers were led by IGI Insurance and Nestle Pakistan, off Rs19 and Rs45, respectively. Other prominent losers included National Bank, Fateh Textiles, Dawood Hercules, Pakistan Oilfields, EFU General, Atlas Honda, Pak-Suzuki Motors, HinoPak, and Colgate Pakistan, which suffered fall ranging from Rs4 to Rs17.55.

Trading volume fell to 60m shares from the previous 99m shares, as gainers maintained a strong lead over the losers at 195 to 79, with 29 shares holding on to the last levels.

National Bank came in for active selling and led the list of actives, off Rs4.15 at Rs224.50 on 6m shares, followed by TRG Pakistan, up 35 paisa at Rs10.15 on 5m shares, DG Khan Cement, off Rs1.70 at Rs93.20 also on 5m shares, Pakistan Petroleum, off Rs3.50 at Rs230.50 on 4m shares, OGDC, lower 70 paisa at Rs125.60 also on 4m shares, MCB Bank, off Rs1.90 at Rs224.50 on 3m shares and Pakistan Oilfields, lower Rs4.50 at Rs328 on 3m shares.

Other actives were led by Gharibwal Cement, up one rupee on 3m shares, Lucky Cement, off Rs2.95 also on 3m shares, and Sui Southern Gas, up 55 paisa on 2m shares.

FORWARD COUNTER: Trading volume also hit new single-session low as investors did not make fresh commitments apparently awaiting some positive developments on the market’s current irritants. Turnover fell to 13m shares from the previous 23m shares.National Bank also led the list of actives on this counter, off Rs4.10 at Rs225.85 on 2m shares, Pakistan Petroleum, lower by Rs2.40 at Rs232.10 on 1m shares, and DG Khan Cement, lower Rs1.55 at Rs93.75 on also on 1m shares.

OGDC followed them, lower by Rs1.35 at Rs112.25 on 1m shares and PSO, higher by Rs2.35 at Rs311 also on 1m shares.

DEFAULTER COUNTER: Unity Modaraba again came in for active support at the previous level of 65 paisa on 1.471m shares followed by Caraban Fabrics, lower 15 paisa at Rs0.80 on 0.391m shares, and Norrie Textiles, up 25 paisa at Rs4 on 0.192m shares.

DIVIDEND: Balochistan Wheels, cash 25 per cent; Dynea Pakistan, 15 per cent, Shabbir Tiles, cash 15 per cent, bonus shares 20 per cent; Orix Leasing, cash 35 per cent; Orix Investment Bank, cash 32.5 per cent; and Lucky Cement, 10 per cent.

BOARD MEETINGS: Modaraba al-Mali, Ruplai Polyester on Sept 15; International Element Islamic Fund, Safa Textiles on 16; and Askari Leasing on Sept 18.