IT was another week of low daily volumes on the premier bourse as investors were not inclined to go beyond their pre-determined limits owing to prevailing law and order situation in the backdrop of suicide attack on the Marriott hotel in Islamabad and disturbing news from Fata.

Although opinions on the floor on the KSE 100-share index are divided, some suggest it should be removed immediately, while others oppose it and claim that in the prevailing situation, both on the economic and political fronts; it should stay for some time.

But a review meeting held on the issue on Sept 25 by the KSE decided to keep it in place for some time. A decision in this regard may be taken possibly by next month. Floor brokers said some leading foreign investors were trying to get it removed so that they could exit even with fresh losses, leaving the market in the hands of speculative traders, who could play with the savings of small investors.

However, a recent meeting between the KSE delegation and the State Bank Governor has mooted an idea to set up another Rs20-25 billion fund jointly shared by banks and financial institutions to solve liquidity problems of investors. Another Rs20 billion fund managed by the NIT is already in operation.

The downgrading of Pakistan bonds and banks to negative from positive did not have any immediate impact on their shares as the market was overawed by so many other local negative factors, floor brokers said.

One thing is apparent that many investors, notably foreign, may not re-enter the market at this stage and await the return of normalcy both on the economic and political fronts.

Trading on the stock market, thus resumed on a cheerless note amid fears of more suicide attacks in the backdrop of Saturday’s attack on Islamabad Marriott hotel and reports of heavy death toll.

Trading volume fell further to set a new all-time low level of 2.477 million shares as compared to last Friday’s 4.309m shares, which analysts billed as an 11-year low as investors seem to be more interested in having an overview of the developing law and order situation rather than in the share business.

The investors’ falling interest in share business even at the highly attractive level may well be had from the fact that the KSE 100-share index showed a fractional fall of only 16.45 points at 9,184.15 points well above the floor. Its junior partner, the KSE-30 share index, on the other hand, remained under pressure and posted a fresh fall of 46.08 points at 10,064.44 as compared to 10,110.52 last week.

Tabish H. Rajabali said the turmoil on the global markets is a bit controlled after the US launched $3 trillion rescue package but it’s after effect will continue to haunt investors in the many weeks to come. “Blank and short-selling has been banned as pre-emptive step to forestall panic selling after the floor on the index is removed”, he added. Analyst Ahsan Mehanti said the continued weakness of rupee was a double-edged weapon and taking its toll in the share market but what worried investors was that there was no visible official effort to stabilise it at a viable level.

There is a loud whispering that the rupee is heading to hit new low at Rs.80 to US dollar as buying pressure on it continues despite it is now no longer a safe haven for many reasons, he added.

Dividend news from the textile sector though on the lower side, it indicated that the performance of this leading sector of economy was fairly encouraging despite reports of a short crop and higher lint prices.

Meanwhile, the Eye Television has announced the buyback of its floating stock of 4.8m shares at Rs47 per share against its face value of Rs10. The share is currently ruling at around Rs42.

Forward counters: Trading on the cleared list also remained insipid as investors were not inclined to go beyond certain price limits and played within them on modest two-way activity.

PSO, Engro Chemical, MCB, Bank Alfalah, Hub-Power and some other came in for alternate bouts of buying and selling on small margins and mostly ended around the previous levels.—Muhammad Aslam.