Contrary to analysts predictions, Pakistani stocks last week remained unsettled amid terribly low daily volumes in the absence of strong institutional buying and fears about the massive float from the carryover market.
The KSE 100-share index, after at one stage breaching through the psychological barrier of 5,200, recovered to finish well above the week's lows at 5,335 as compared to 5,393.99 a week earlier.
Most analysts were predicting a price flare-up after Shaukat Aziz, known for his investment-friendly financial policies, takes over as Pakistan new Prime Minister but the investor reaction was not that encouraging but rather disturbing.
The market's unexpected plunge overshadowed the assumption of an executive power by the new prime minister, but the future outlook appears bullish. The question being debated in the corridors of the KSE was "why his assumption of power did not enthuse investors despite the fact that lower levels ensure handsome capital gains."
"It appears to be a tactical move by the big ones who apparently seek a waiver on the Capital Value Tax (CVT) imposed in the national budget in June this year," commenting on low daily volumes and falling price said.
"Now he is all powerful and could revive the stock market just in one stroke of his pen," some others maintain hoping he will certainly think about it after settling down and till then the current sluggishness may prevail."
The stock trading is literally haunted by CVT phenomenon as investors think twice before crossing the self-imposed buying limitations. The perception that consistency in economic and financial policies initiated by him during the last five years and with positive end-results too aided by higher corporate announcements could sustain any future run-up, hopes an analyst.
However, the opening was on a higher note but stocks fell across a broad front later as a spate of selling spilled over from the carryover market halted the upward drive. "I don't think bears have the guts to negate the objective changes on the political front," predicts a leading analyst. "The man of finance is in as a prime minister with wider power."
But some others said the market had already gave a favourable reaction to the Shaukat Aziz since his election victory to the top slot during the last couple of weeks. Snap selling from the carryover market was long overdue but it came at a time when investor needed a major boost to give a bullish welcome to Shaukat Aziz, they said.
Both investment and volume on the carryover market were at a record high of Rs28 billion and 546m shares and it was speculated it could overshadow some of the positive news both on the political and corporate fronts, brokers said and "both the weakholders and some institututional traders chose the week's opening session to alight their burden."
News from the corporate sector were pretty encouraging as annual profits announced by National Bank, MCB, and Bank Al-Falah at Rs2.189 billion, Rs1.289 billion and Rs593 billion respectively were on the higher side of the market expectations but they came at a time when leading market players were busy with the market technicalities.
Their final dividends are expected to be on the higher side, and so are expected to be from the other leading companies whose board meetings are due during the next couple of days.
Cash dividend and bonus shares, Pakistan Cable, PICIC, Saudi Pak Leasing, Crescent Steel, Atlas Investment Bank, Attock Cement, Pakistan Services and final cash dividend of 100 per cent by National Refinery (earlier reported in daily reports) were on the higher side of the market but failed to reverse the trend, increase in their shares notwithstanding.
Analysts said the market will be back on the rails after technical correction as the "Shaukat Aziz factor" will remain be dominating force behind the future stock trading.
Although losing shares dominated the list some of the leading shares managed to finish with an extended gains, leading among them being Unilever Pakistan, EFU General Insurance, Atlas Honda, Atlas Battery, Pakistan Cables and some others, rising by Rs5 to Rs15.35.
Losers were led by Lakson Tobacco, Colgate Pakistan, National Refinery, EFU Life Assurance, Avent is, Grays of Cambridge, and Shell Gas, Gatron Industries, International Industries, Pakistan engineering and Siemens Pakistan and some others.
Meanwhile, the managements of the four new companies have applied to the KSE for listing their shares and float them for public subscription after the official approval. They are Network Micro-Finance Bank, AMZ Ventures, Atlas Fund of Funds and National Equities.