November 21, 2007	Wednesday	Ziqa’ad 10, 1428

KARACHI, Nov 20: Two brokers bidding farewell out of the trading hall: “bye, bye”, is overheard and turns to “buy, buy”. Every small investor at the stock market is switching from one to the other crowd of people in an effort to overhear a ‘piece of good news’. Uncertainty is writ large across the board as prices of stocks escalate spinning the KSE-100 index up and down sometimes in an incredible band of 300 points.

The atmosphere surrounding the KSE trading hall is depressing. The market fundamentals are strong; blue chips have dropped to exceedingly low trading multiples. Should the buyers enter the market?

Stock brokers whose livelihood depends on selling optimism are also loath to say “yes”. An honest broker advises his clients to stay on the sidelines until the dust on the political front settles down. “Over the past decades the country has caught on the habit of political upheavals”, muses a veteran stock broker, “but I have seen nothing of this kind, where no one is certain about tomorrow”.

Research analysts have stopped issuing ‘outlook’ notes on the market. Commenting on the market, a stock brokerage firm wrote in its morning report on Tuesday: “The stocks are fundamentally sound and ripe for picking”, but then the analysts added: “and we would say no more!”

All that provides a fertile breeding ground for rumour mongers. Much of it centres on President Musharraf.

Stock prices rise and fall as words spread in whispers: “He has been toppled”. (The stocks tumble) ”The deal, the deal has finally been cut”. (Prices escalate). “Court decisions have been announced in his favour” (stocks jump out of the red of 200 points to 120 points in the green).” He is now in the plane bound for Jeddah... (slight swing upwards)...”He has met the Sharifs (prices edge higher).

Most other news makes little difference. Investors seem to shrug off such news as exploration companies have hit new wells; prices of fertilizer are rising; foreign remittances are soaring. And “Journalists are out on the road agitating on the media curbs” (hum!).