THE share market last week plunged by about eight per cent, eroding Rs222 billion from the market capital as leading base shares in the oil sector fell like house of cards, signaling the exit of foreign investors.
Just on the top of brewing thaw on ties with the United States in the backdrop of divergent opinions, sans legal one, on the immunity of Raymond Davis, the violent turmoil in the Arab world and the parting of ways between PML-N and the PPP, leading to the end of coalition government in Punjab proved to be the last straw on the camel’s back.
And that was well reflected in the virtual crash of the benchmark, steadily holding on to a respectable level of well above 12,000 points for the last couple of weeks, which breached through finishing the week with a massive single week fall of 817.63 points at 11,223.52.
But some analysts hoped the worst may be over and the next week could witness the return of the bull market as many may not miss an attractive bait of handsome capital gains.
The promised launch of the leverage product for the ready section by the end of the current month appears to be a rare possibility as it would be the end of February after the current trading week.
A section of analysts was, however, not worried about the persistent reversal of the benchmark as, in their opinion, it was moving within its pre-determined technical limits of about 400 points.
During the recovery movements it could hit the high mark of 14,000 plus points and in its return journey the level of 10,000 points could be the take-off point for its onward thrust, some others said.
According to their assessment, the next week could well witness a grand recovery in a highly oversold market.
They, however, seemed to have ignored the heating up of the local political scenario in the backdrop of PML-N threat to launch a drive against non-implementation of the agenda of economic reforms after dislodging PPP minister from the Punjab cabinet.
News both from local and foreign sources were highly bearish and the prevailing violent turmoil in the Arab world, notably in Libya amid reports of heavy death toll, seems to have accelerated the pace of sell-off, most analysts believe.
But a leading analyst said the visit of the FBR team had its role in the low volume as tax people were seldom welcomed in the KSE that too asking for return on capital gains tax from the leftover.
The volume, which dropped to a meagre 51 million shares, reflects the plight of the market despite sharply lower levels, which could be an envy of any prospective investors.
“Positive news about the introduction of the leverage product for the ready board appears to be just a couple of days away but investors are not inclined to take even a calculated risk in the backdrop of bad news from global trading centres,” said a leading analyst Ahsan Mehanti.
The market needs some instant dozes of stimulants to keep it in a good shape but even the market trend-setters, having enormous financial resources, are reluctant to aid the falling market,” he said.
Mehanti said local investors were awaiting the return of foreign investors who were worried over the political turmoil in the Arab world and some of them were back at the current lower levels, the market may jolt here and there on slight negative moves.
Analyst Hasnain Asghar Ali said: “The entire activity appeared to be a jobbing affair as the same set of investors liquidated their positions at the rise and sat idle after having earned their pre-determined profit.” Future contracts: Much of the activity remained confined to leading oil shares, partly in sympathy with heavy battering in the ready section followed by exit of foreign investors after global prices soared to new high linked to rise in inflation rate and the ruling prices.
OGDC, Pakistan Oilfields, Attock Petroleum, MCB, National Bank, Nishat Mills, D. G. Khan Cement, Fauji Fertiliser, and Fauji Fertiliser Bin Qasim being in the front line of falling shares. Forward off-take was on the lower side of the week’s figure despite lower prices. —Muhammad Aslam