THE share market last week remained dormant as investors again indulged in alternate bouts of buying and selling mostly in the low-priced shares as no one was inclined to take even a calculated risk until the floor is removed.

All KSE indexes, barring the benchmark 100-share, was held static earlier in the week but posted a modest rise of 3.01 points at 9,187.10 at the weekend session, reflecting the revival of support in the leading base shares. The KSE 30-share and the KMI 30-share indexes were quoted unchanged at 9,981.93 and 11,224.18 points respectively.

The market capital, however, ended modestly lower at 2,826.213bn, off Rs1.520bn after having moved either-way earlier in the week.

Investors waited for lifting of the floor amid rumoured date of Nov 17 and then Nov 24, but there was no word from officials on the issue. Now there is a loud whispering in the market that Dec 1, preceded by a special session, could be the final date as by that time the market support fund of Rs20bn is expected to be operative.

Floor brokers said to drag the floor removal issue any further could lead to some unpleasant situation as brokers are said to be planning to protest against any more delay.

“There has been transaction of millions of shares at discount of 20 to 25 per cent”, they said adding “chances of fresh massive price erosions may not be around as those who wanted to quit had already completed their exit operation”.

They said opinions may differ on the issue of fresh price erosions, but a section of analysts predict there could be a spat of buying offers at the current lows after normal trading resumes.

Foreign investors may stay out, but the local institutional traders could play decisive role in putting the market back on the rails after having support on the public sector blue chips, mainly OGDC, National Bank, Pakistan Petroleum and some others.

Trading on Monday failed to pick up as investors were not enthused by the IMF rescue package of $7.00 billion apparently awaiting the removal of the floor under the KSE 100-share index before resuming normal activity.

“It appears to be a silent protest by investors against further delay in removal of the floor,” said a leading stock analyst Hasnain Asghar Ali. “The approval of IMF credit line’s maiden tranche, in the pipeline by the end of the current month, should have followed by the end of floor”, he said.

No one could deny the fact that conditions linked to the IMF package is very harsh but its team, monitoring the disbursements sitting in Islamabad, will have to keep a strict check on “royal spending linked to lavish living of few at the top”, he said.

He hoped the floor might be lifted during the next couple of sessions as there were rumours that the KSE board would meet on Monday and approve the date for removal of the floor based on the outcome of Nov 17, meeting of the Friends of Pakistan Group in Dubai.

Analyst Ashraf Zakaria said the market would adjust itself in line with the objective conditions after the unfreezing despite initial fresh jolt as the tired bulls may not like to miss the current attractively lower levels, which ensure massive capital gains.

The IMF credit line allayed fears of a possible default on foreign debt repayments but how would it affect the local economy was not clear as further increase in the discount rate and taxes could well prove a double-edged weapon both for the financial and the corporate sectors, he added.

Analyst Ahsan Mehanti thinks the major current concern of the market is the floor and once it is lifted natural market forces will come into play and could lift prices higher from the current lows.

However, he said the current week could be crucial for the future direction of the market as some major decisions about the future direction of share market were expected to be taken.

Forward counter: Trading in the futures contracts is expected to be resumed after about three months’ technical suspension and will be closed on Dec 26. The settlement of the outstanding dues will be made on Dec 30, KSE announced but said it reserved the right to alter the said dates depending on the date of Eid holidays.—Muhammad Aslam