KARACHI, Sept 14: Share prices have historically kept up rising trend during Ramazan, suggesting that faithfuls do keep one eye on the stock index while praying and making best efforts to seek divine blessings.

That is not to touch the sensitivities of a practicing Muslim — and there are countless such souls who frequent the stock market — but just as a matter of study. For seven of the nine years (between 1998 and 2006), stocks continued to climb during the holy month.

The volumes, nonetheless, showed a sharp downturn in six of those nine years.

The rise in index could be construed as in spite of the lower volumes or actually due to the trading volume remaining thin. And the drop in volume could be attributed to the decreased trading timings as well as investors’ desire to keep away from the market until the end of days of fasting and the start of the days of feasting.

In the month of ‘Shabaan’, for six of the nine years following the opening of the market after ‘Eid’, stocks were noted to have taken a sharp upturn.

Ali Hussain, head of Research at InvestCap charts out the course of the Karachi Stock Exchange during the month of Ramazan, the month before and the one after, for all of the past nine years.

Last year (2006) brought most blessings to the market, when shares rose by 12.2 per cent in Ramazan, compared with just about one per cent in the month before and an actual drop of 6 per cent in the month after.

The year 2001 stood out among the rest when equity values just about stayed put in the holy month, compared to increase of 12 per cent and 3 per cent in the month before and the one following the month of Ramazan.

It would of course be hazardous to make a guess on whether the equities would follow the past practice. Past trends are never guarantees of future trends. But it would be interesting to recall that investors had many things troubling their minds in the month of Ramazan last year.

The market was grappling with the issues of lack of coordination between the apex (SECP) and the front line (KSE) regulators; frequent amendments in regulations; uncertainty regarding stamp duty levy by the Sindh government; the end of in-house badla from Oct 28 and last but not the least, the repercussion of the report of forensic investigators then working (fruitlessly) on the trail of stock market crisis of March 2005.

But perhaps a bigger problem of ‘political uncertainty’ stares the stock market in the face this Ramazan. There are several important (and may be historic) events likely to take shape in the holy month, the one surmounting them all being the Presidential elections, understood to be held sometime in the midst of the month.