Terrorist attack on Indian Parliament killing over a dozen people halted the market’s fragile weekend rally as investors hastened to take profits at the available margins fearing acceleration in border tension with India.
Pakistan may not be behind the attack but as is customary with Pakistan and India, it is not that difficult to link it and investors were quick enough to get out of the market until the dust raised by the attack settles down.
The rescheduling of $12.5 billion foreign debt by the Paris Club to 38 years with a grace period of 15 years should have allowed the market to extend Thursday’s snap rally but negative political developments did not allow the consolidation forces to restore sanity to stock trading.
A long weekend on account of Eid holidays also inhibited fresh commitments both from the general investors and the institutional traders.
Most analysts predict that the post-Eid holiday sessions could witness a lot of covering purchases aided partly by the year-end portfolio adjustments and partly to speculative buying on the perception of economic recovery fuelled by steady inflow of foreign aid.
As a result, excepting a smart rally at the fag-end of the week on Thursday, stocks remained under pressure during the preceding week as institutional traders kept to the sidelines despite good news on the foreign aid front including the approval of $1.3 billion package under the Poverty Reduction Growth Facility (PRGF).
The KSE 100-share index finished a bit shaded after earlier moving either-way at 1,380.08 on selling prompted by the reports of terrorist attack on Indian parliament and its negative impact on Pak-Indian relations.
Textile shares responded bullishly to 7 per cent import tariff exemption by the European Union on textiles and proposed increase in export quota by 15 per cent but the absence of leading buyers and bargain-hunters added to the prevailing sluggishness.
The snap rally aided by strong institutional support raised the hopes of advent of year-end buying but attack on Indian parliaments again reversed the market trend.
Prices fell under the lead of pivotals earlier in the week on selling. Daily traded volume shrank to below 30 million share mark and the index was marked down below its support level. All eyes remained focused on the PTCL board meeting and hopes of some positive announcement in regard to widely speculated interim dividend, but there was none till the close and the consequent selling.
The KSE index early was up by about eight points on active support ahead of the PTCL board meeting and the market talk of an interim dividend but as there was no announcement from its management till the closing bell, weakholders took profit at the initial rise.
“Reports trickling in from Islamabad PTCL board meeting indicated a rise in the quarterly after-tax profit to Rs4.22 billion but in the absence of any official announcement on the subject, traders sold in part their long positions”, analysts at the W.E. Financials said.
“No business no margins”, they jokingly said commenting on the falling daily volumes below the average figure of 100 million to 30 million shares.
However, some of the news, notably 15 per cent increase in the textile quota by European Union including the US and some positive developments on the privatization front of the PSO evoked good interest earlier in the week but as the follow-support lacked, most of the pivotals reacted on selling.
“The market seems to have digested all good news on the aid front and is in search of some fresh stimulants to keep it in a good shape”, stock analysts at the AHRL said.
“Whether or not the investor perceptions assisted by counter market forces will play their due role in the sessions prior to the eid holidays is unclear”, they added.
But stock analysts at the Moosani Securities believe the current sluggishness is temporary as the market has now a viable financial base on which it could build a strong rally before the year is out.
It was perhaps in this background that the broader market performed well, while pivotals finished reacting under the lead of Shell Pakistan and Noon Pakistan, which fell by Rs1.95 to 2, while others fell fractionally.
The BOC Pakistan again responded favourably to 100 per cent final cash dividend plus 20 per cent bonus shares adding another Rs20 to the weekend gain.
Others to follow it were the Century Insurance, Farooq Habib Textiles, Ismial Industries, Al-Ghazi Tractors, Millat Tractors, Quetta Textiles, Kohinoor Weaving, Bhanero Textiles, Rupali Polyester, Dawood Hercules, the PSO, Pakistan Telephone Cables after the announcement of 15 per cent dividend, and several others.
Losers were led by the EFU General, New Jubilee Insurance, Gatron Industries Din Textiles, the ICI Pakistan, Shell Pakistan, Murree Brewery, Faisal Spinning, Noon Pakistan, falling modestly but the largest decline of Rs15 was noted in the Rafhan Maize Products for no apparent bearish reasons.
The trading volume shrank to a lowest weekly total owing to two closures and light ready volumes, falling to 130 million shares from an average figure of 500 million shares in normal trading sessions.
The most active list was topped by the Hub-Power, the PSO, the PTC, which accounted for 70 per cent of the total volume followed by the ICI Pakistan, Adamjee Insurance, Engro Chemical, Nishat Mills, Sui Northern Gas, the MCB, Japan Power, Fauji Fertiliser, Telecard and D.G.Khan Cement.—Muhammad Aslam