THE share market went through another terribly lean week as investors kept to sidelines in the absence of any positive news both from the corporate and political fronts amid falling daily volumes.

Investors’ search for new investment avenues remained at high pitch throughout the week and those who could find one, opted for it after selling their stocks holding even at lower rates.

The corrective steps including lowering of circuit-breaker to one per cent from the previous five per cent taken by the regulatory authority to forestall fresh price erosions did limit the loss but fractional fall remained the hallmark of the entire trading throughout the week.

Stocks, therefore, ran into deeper recession as both the leading investors and institutional traders kept to sidelines and did not cover positions even at lower levels amid terribly low daily turnovers.

All eyes are now set on brokers meeting called by the KSE chief next week to protect the market from fresh erosion and revive investors’ interest in the share market. It may prove crucial for the future direction of the market, said a floor broker.

The KSE 100-share index kept its creeping decline and fell by another 265.84 points at 11,695.82 as compared to 11,961 points a week earlier, as all leading share, mainly MCB, OGDC, PSO, National Bank, Pakistan Oilfields, Pakistan Petroleum and some others again ended in the minus column amid continuous price erosions.

It was not a single factor but a multitude of them which kept the market hostage, the main among them was the weakness of the rupee, which fell to an all-time low of Rs73 to a US dollar leading a massive outflow of capital from the share market to other outlets including gold, which also hit a new high at Rs21,300 per ten grams.

Added to it was political instability, operation in FATA and concerns about the economy followed by lack of investors’ interest in the share business.

“The failure of market stabilisation steps taken last month to put the market back on the rails or to revive investors’ interest in the share business seems to have further accentuated the situation”, dealers said.

It was in this background that a concept of equity market opportunity funds worth Rs50bn was floated by the Security and Exchange Commission of Pakistan (SECP) to arrest the persistent downward drift on the market and protect investors’ interest in case the market is manipulated by some speculative traders.

A high-level meeting of all those associated with the share business was held during the last week, and financial institutions have sought time to participate in the proposed fund. The final meeting in this regard is due to be held on July 16 to workout details and the amount to be offered by participants, market sources said.

Some analysts said what ailed the market was the prevailing instability on the political front and until normalcy returns to it not many, not to speak of the foreign investors who are already out, would like to put money in share business as the low daily volumes indicate.

However, mid-week’s corrective steps taken by the state bank to arrest fresh fall in the value of the rupee against the US dollar were welcomed by stakeholders in the share market as was reflected in the revival of selective support at lower levels on some counters.

The improvement both in values and turnover was attributed to the SECP-KSE meeting to review the last month’s measures and their impact on stock trading and if possible to revise some of them, market sources said.

Investors are awaiting the proposed meeting of the KSE on July 16, to review the current changes in upper and lower circuit-breakers amid hopes that the previous lower lock of five per cent may be restored to push the turnover figure from the current lows, analyst Hasnain Asghar Ali said.

“Why should investors put money in stocks amid a phenomenon of depreciating value of the rupee, they have more than other safe havens where their investment is safe and could appreciate”, he added.

Analyst Ahsan Mehanti said the increase in turnover figure at 52m shares after several lean sessions and an all-time fall in volume to 5.348m shares reflect that a section of investors has already resumed covering purchases on selected counters.

Indications are there that the current short-covering at lows could develop into a strong rally any day as the sell-off seems to have overdone its intensity on technical grounds, he said.

But the news from political front and law and order situation, particularly in the backdrop of Sunday’s suicide attack in Islamabad and series of explosions in Citu were enough to divert investors’ attention from the market, some others said.

Forward counters: Speculative issues on the forward counter also followed the lead of their counterpart in the ready section and generally fell where changed under the lead of PSO, Pakistan Petroleum, Pakistan Oilfields, OGDC, MCB, and the provisionally listed KASB Securities. But later it recovered from the early fall and so did Engro Polymer and some others.—Muhammd Aslam