December 24, 2006	Sunday	Zilhaj 02, 1427

KARACHI: The privatisation of state-owned units during the last decade has boosted stock trading both in terms of volume and index level and pushed the country’s bourses on the top of emerging markets.

Brokerage houses, general investors and small savers welcome the sell-off of state units expecting major changes in their operational efficiency in the private sector and higher profitability and payouts both in the form of cash and bonus shares.

Although annulment of Pakistan Steel deal by the apex court slowed down the process but there is long list of companies expected to be put on sale by the next year.

Despite some negative news, followed by market crashes the bourses are operating on sound footing and scandals of price manipulations by some of the leading players failed to check investor enthusiasm for the share business.

For many people, especially rich, stock trading has become a second habit. Most of them could not stay away even if they have suffered losses for presence of foreign funds has given it a needed depth and capacity to absorb jolts and psychological shocks.

“The privatisation or partial disinvestment is a double-edged weapon,” said leading stock analyst Ashraf Zakria while commenting on the economic policy of the government. “On the one hand it scares employees of losing their jobs and on the other it fuels expectations of better performance under the private management”.

Prior to the deadlines for the sell-off on any unit its price on the bourses generally rose sharply amid either-way fluctuations and both the small investors and the big ones mostly benefit from the occasional price flare-ups.

The market over the years has witnessed boom after the sell-off under Pakistan Telecommunication (PTCL) giant to a Dubai-based company at $2.58 billion, considered to be the biggest deal so far and PSO, OGDC, Pakistan Petroleum to follow.

During the period since the process of sell-off and disinvestment started, the KSE 100-share index had touched all-time high at 12,236.00 points from its base of 100 points and the market capital at $55 billion opening the floodgate of foreign investors.

The market crash of March and June 2005 did extensive damage to investors’ confidence but analysts said it is a part of the game as each fall is followed by sustained run-up, analyst Ahsan Mehanti said.