THE stocks remained unsettled throughout the week as positive news, notably swearing in of Asif Ali Zardari as President of Pakistan, and announcements of the National Bank and the Oil and Gas Development Company to buyback their floating shares were followed by Nato forces air attacks inside Pakistan.

But the warning to the US by the army chief to keep off borders in an obvious reference to Nato attacks inside Pakistan killing about two dozen persons, seems to have taken steam out of the market under different analysts interpretations of Gen Kayani’s statement.

“There may not be risk to country’s security at this stage, but the developing situation on the Fata borders and the US threat of hot chase could take an ugly turn if Nato insisted on their right to take direct action inside Pakistan”, fears a leading analyst.

The KSE 100-share index, after an initial rise, suffered fresh fall toward the close of the week and was last quoted at 9,253.92, as compared to previous week’s 9,342.19, off 88.27 points. The KSE 30-share index fell by 112.74 points at 10,128.51.

The continued weakness of the rupee and the fall of forex reserves below the $10 billion mark also worried investors followed by talk of downgrading of Pakistan foreign currency rating.

Floor brokers said the market should have run into a deeper recession in the backdrop of more negative news but extension of the price freeze and floor on the KSE 100-share index below 9,144 points up to Sept 25 saved it from a bigger loss.

They said the buyback announcements by the NBP and the OGDC could have proved a big moral booster for investors as their massive operation to net the floating stock could have given the needed depth to the ailing market.

But how the investors would react to the buyback arrangements of the NBP and the OGDC would be known after the benchmark prices of the two are set on the higher side of their current ruling prices, they added.

However, for the near-term buyback euphoria seems to have been buried under the mounting concern about the higher fiscal deficit, weak rupee, falling foreign exchange reserves and 31 per cent rise in power rates, which would significantly add to the production costs.

However, the stock market on Monday welcomed the election of Asif Ali Zardari as the president of Pakistan as was reflected by initial buying euphoria but failed to sustain the early run-up on late selling ahead of KSE board meeting on price freeze.

The KSE 100-share index on the day opened higher by 128 points at 9,460.29 in the backdrop of Saturday’s presidential election, won by Mr Zardari with an overwhelming majority vote, but the confronting political and economic challenges in the coming months caused some rethinking on his victory.

Some others said his policy guidelines after the assumption of office of the president would give an idea to the investors how to move under the new economic agenda to put the economy back on the rails.

“Roar of the bulls was not witnessed on any counters as was speculated by some analysts that Zardari’s lection as president could trigger buy stops at the current lower levels”, said a broker “but hoped it could manifest itself in due course as was warranted by the current lower levels”.

“Investors are expected to wait for the new policy initiatives by the ruling elite on the economic and corporate fronts before resuming normal trading”, another analyst said adding “massively mauled investors may not be carried out by early euphoria as the political and law and order situation is still fraught with high risks”.

There are rumours that the KSE proposal under which it would be mandatory on the listed companies to distribute 40 per cent of their earnings among shareholders. The proposal is ready and would be forward to the SECP for its formal approval before its launching.

Dividend news from some of the leading companies, notably 50 per cent bonus and 40 per cent cash by Pakistan Paper Products, 20 per cent bonus and 10 per cent cash by Netsol Technologies, 40 per cent cash by Imrooz Modaraba, and 50 per cent bonus shares by the Sui Northern Gas company were on the higher side of the market expectations, but failed to boost the underlying sentiment owing to the Fata situation.

Forward counters: Speculative issues on the forward counter followed the lead of their counterparts on the ready section and mostly fell modestly lower under the lead of Engro Chemical, National Bank, MCB, OGDC, Lucky Cement, Fauji Fertiliser Company and many others but decline were modest owing to price freeze.—Muhammad Aslam