The share market bounced back on Monday as financial institutions and leading brokerage houses placed fresh deals in the investment and trading stocks, helping the index to gain sharply on first day of the new week. The KSE-100 index during the initial hour moved in a narrow range but buying stepped up when an announcement flashed on the trading screen that KSE directors would meet SECP Chairman Dr Tariq Hassan on June 1 to resolve all pending issues relating to margin financing, and would take measures for risk management.
Besides this factor, share prices recorded gains as last week''s bear-run had made several scrips attractive, which convinced the genuine investors to place fresh deals.
Hasnain Asghar from Aziz Fidahusein said that the market showed recovery, but unfortunately long-term investments stayed away from the market. However, punters and brokers displayed their strength as they accumulated main stocks around closing levels.
He said that the official announcement was made around midday, which said that KSE management would meet SECP on June 1 to settle all outstanding issues pending with the regulator. This attracted the left-outs and the day-end saw massive short covering.
Leading banking, oil and gas stocks, accompanied by PTCL, managed upper locks, thereby indicating a positive opening on Tuesday. The speculation pertaining to the meeting with the regulator would keep the market extremely volatile, he said.
Observers expect an amicable settlement in this meeting, although in the previous meeting these proposals had been clearly rejected. Technically, the index would continue to face resistance around 6750-6757 while support would come around 6503-6510. It is, however, recommended to wait for final outcome of the meeting for taking fresh positions, while abnormal surge should be capitalised for intra-day trading. Settlement of issues with the PTCL labour unions and a high bid for NRL might, however, invite strength in PTCL.
Tariq Hussain Khan, research analyst at Atlas Investment Bank, said that the market made a comprehensive rebound. The share prices rocketed following SECP''s invitation to the directors of all the stock exchanges to discuss pre-budget issues and related matters. Almost all blue chips closed near their upper circuit levels. However, due to uncertainty of Monday''s recovery being long lasting, the volume traded was low, at 180 million shares, compared with 242 million shares at the end of last week.
Tuesday is an important day for the privatisation process due to bidding for National Refinery. The outcome of this event would give a very significant indication about the forthcoming privatisation. "We suggest a cautious stance prior to the announcement of the federal budget", traders said.
The badla volume decreased by 300 million rupees. There was badla decrease by 0.66 million shares in Pakistan Oilfields and also little bit badla decrease in all scrips. Traders and dealers expected that badla volume would remain in the range of 20 to 22 billion rupees, because the positive expectation in front of margin financing would start along with COT in June.
PTCL moved up to Rs 65.95 from Rs 62.85 on a volume of 83 million shares. OGDC closed at Rs 89.35, ie higher by Rs 4.25 on trading of 37 million shares. NBP registered an increase of Rs 4.20 to Rs 88.70 on business of 7 million shares. Pak Oilfields climbed to Rs 247.90 from Rs 236.10 on deals of 6.9 million shares, and Pak Petroleum denoted an increase of Rs 7.70 to Rs 162.90 on turnover of 5.8 million shares.
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