But there was no panic in the trading hall as most of the leading investors held on to their positions without being jittery on the perception that the continued bourse board meetings to find out alternate sources of funding kept them in a positive mood.
Indications are that the SECP and the bourses board may opt for the removal of the floor as both brokers and the investors are now impatient to see the market without the ‘floor’ irrespective of expected avalanche of fresh selling.
“Go alone as the inherent strength of the market is not in perils,” analyst Ahsan Mehanti called on the investors and the brokerage houses to come to the aid of terribly mauled market “strengthen it with all your financial might”.
“The Wednesday’s echoes of “lao or lay” (open cry shouts)for buying and selling respectively reflect the investor mood, reviving about two decades old memories in the minds of most of the old guards when the market did not face complex problems as the prevailing ones,” said a leading analyst.
Most of them are now out through Wednesday’s “lao and lay” silent protest to see the market free of any external checks and be allowed to operate after the removal of the ‘floor’.
The share market earlier in the week resumed trading on an improved note as a section of investors covered positions on select counters after official made it clear that the removal of ‘floor’ needed IMF’s nod.
Though a bit late an uncertainty prevailing on the issue was ended by the KSE sources that the IMF had been approached seeking its approval on the matter.
But the IMF’s refusal not to participate in the proposed fund gave a temporary jolt to the investors, but absorbed the shock as the KSE opted to alternate funding sources to reactivate the market after having done away with the ‘floor’.
The market was saved from a major shakeout in the backdrop of the city violence and killing of about four dozen persons and heavy production losses in the industrial sector, some analysts said.
Some of the leading investors who covered positions on some of the counters on the perception that their current lower levels ensure higher capital gains after normal trading resumed.
“One may well ask what interest IMF has in the floor,” analyst Ashraf Zakaria said, adding “it wants to ensure that foreign investors who are trapped in the impasse suffer minimum losses after the floor is removed.”
The general speculation is that prices of some of the leading shares could fall by another 20 to 30 per cent in post-floor panic related selling, he added.
Although there was no movement in the benchmark KSE 100-share index at 9,187.10, but its junior partner the KSE 30-share index fell by about 27 points at 9,955.10 points despite the fact that a sense of optimism prevailed in the market as some of the investors took fresh positions both in low-priced and some high profile shares.
But on the other hand the KSE all-share index remained active amid alternate bouts of buying and selling at 6,641.67 points.
Both the market capital and the volume figure during the week showed modest improvement but failed to sustain it and fell by Rs2.435bn at Rs2,817.863bn from Rs2,820.456bn and 1.700m shares as compared to previous week’s 0.800m shares.
Under the agreement with the IMF, it should have made provision for Rs7bn as its contribution to the proposed Rs20 market support fund as guarantee to bank loan but there was no mention of the amount in the first tranche, analyst Hasnain Asghar Said.
He said the other major participants including National Bank, EOBI and State Bank has contributed their share, amounting to Rs12.5 billion and the IMF guarantee would raise it to the proposed amount of Rs20 billion.
FORWARD COUNTER: The activity on the forward counter failed to pick up as investors awaited further developments on the ‘floor’ and fresh guidelines on the outstanding due in the CFS market.
But at the weekend session, leading among them including MCB Bank, Pakistan Oilfields, PSO and Engro Chemical came in for active selling and fell sharply lower under the lead of PSO and Pakistan Oilfields, off by Rs10.24 and Rs52.32 respectively but without any deal.—Muhammad Aslam