Stocks lacked a normal trading interest during the previous week, as leading investors and bargain-hunters kept to the sidelines most of the time. They, apparently kept waiting for financial support, which remained shy till the close of the weekend session.

Many leading floor brokers, earlier in the week, had predicted return of a bull market on the perception that the institutional traders holding short positions would be back in the market to resume the new year operations. Instead a deep recession engulfed the market as there were more sellers than the buyers.

The KSE index, though did not fall sharply but certainly, eroded its value by a couple of points each session and finally finished well below its target of 1,800 points. The market capitalization also fell from the recent peak of Rs420 billion to Rs415 billion as most of the heavily capitalized shares fell down.

What ails the market is not clear. The constitutional package or its negative fallout, leading to political polarization may not be the only reason behind the lacklustre performance, there may be many other. No one pinpointed them in the backdrop of some basic positive fundamentals.

The market, therefore, remained in a terribly bad shape as it witnessed exit of some big ones, including foreign investors, after an attractive bait of lower levels failed to lure them back into the trading arena.

Never before, has market been so sluggish and a victim of slackened demand as it had been in the first two weeks of the current fiscal, and the daily falling volumes speak of many untold episodes.

Why the investors have been sidelined, is a question being asked by many but no precise answer could come from any quarters. Analysts gave many reasons behind the current sluggishness but a simple reason could be, “investors have no appetite for fresh stocks”.

The announcement of the date for national elections on Oct 10, should have removed the political uncertainty, but the rejection of petition seeking the removal of graduate condition for the contestants of the PAs and the MPs seats by the apex court sparked fears of political agitation by the parties, as dozens of former members may not qualify for elections.

“The rigid position taken by the government and the political

Parties on the constitutional package has added to the existing polarization rather than bringing about reconciliation prior to elections”, says a leading analyst.

The KSE 100-share index, therefore, failed to sustain its coveted level of 1800 points and fell to close around 1,783.17, off about 17 points and so did the market capitalization at 415.008 billion.

Investors have their own reasons to enter or exit a trading arena in abnormal conditions, though there is no denying the fact that a positive background news certainly plays a stimulating role, sometimes for longer duration and at others giving a mere psychological boost to share values.

Extremely narrow price movements, mostly within few paisas may not be a prelude to a big sell-off or a smart turnaround reflects investor’s reservations on certain counts, some brokers said.

But at this stage there is none. The military standoff with India is there, while local political polarization appears to be heading for a big showdown.

As a result, the turnover figure fell to a low ebb as the leading investors kept to the sidelines allowing jobbers and short-term to play according to their whims.

Stock analysts are never tired to give conflicting reasons behind the current sluggishness, but all appear to be well off the mark. Some say the market is consolidating around the current levels before a grand turnaround, others claim investors are awaiting the dividend announcements from some big ones to resume new year buying and so on.

“The simple thing is that there are no buyers either institutional or genuine,” says a broker, adding, “ it needs no wisdom to fathom the causes behind it, including the political ones”.

However, it is satisfying to note that the market is not standing at the mouth of a volcano and everybody should think it a “pretty safe territory, which could prove a launching pad for a journey to the coveted index level of 2,000”.

No one could lure the prospective investors into the net, including an attractive bait of lower levels until he himself decides to ride the bandwagon and the timing, which suits him.

“There is no dearth of funds but there are no safe havens on which investors could rely, and where their capital is safe and could grow”, says a member of the KSE.

The National Bank resisted fresh decline ahead of its board meeting aided by the reports of higher earnings but failed to take the market along with it in the plus column or generate sympathetic buying on other counters.

Among prominent gainers were the IGI Insurance, the Shadab Textiles, the Sunrays Textiles, the Ferozsons, the Hilal Flour Mills, the Gillette Pakistan, the Zulfiqar Industries, and the Treet Corporation, the Lever Brothers, the ICP Mutual funds, on reports that a number of parties have indicated to buy them under the privatization plan.

Losers were led by the Grays of Cambridge, the Wyeth Pakistan for no apparent bearish reason, followed by the Clariant Pakistan, the National Refinery, the Siemens Pakistan, the Central Insurance, the Ittefaq Insurance, the Pakistan Oilfields, the Shafiq Textiles, the SK&F and some others.

Trading volume remained at a low ebb including a single- session turnover of 21 million shares, reflecting the absence of leading investors. It fell further to 202 million shares from the previous 281 million shares.

The Hub-Power, the PTCL, the PSO, the National Bank managed to clinch lion’s share out of a meagre total followed by the Telecard, the MCB, the Sui Southern, the Fauji Fertiliser, the FFC-Jordan Fertiliser, the Engro Chemical, the D.G.Khan, the Chakwal and Kohat Cement,the ICI Pakistan, the KESC, the Southern Electric, the WorldCall and some others.

FUTURE CONTRACTS: Most of the active speculative shares, notably the PTCL, the PSO, the Hub-Power, the MCB, and the ICI Pakistan were traded in line with their ready counterparts, but managed to maintain a firm posture amid alternate bouts of buying and selling.—Muhammad Aslam