THE KASB REVIEW

STOCK MARKET AT A GLANCE

 

 

By SHABBIR H. KAZMI
Updated Sep 14, 2002

 

MARKET REVIEW: BEARS OUST THE BULLS

Expectations of a possible terrorist attack on the first anniversary of the terrorist attacks on the World Trade Center dominated trading activity this week.

 

Any possible attack in Pakistan was more of a reason for lack of investor interest than any attack in the US or elsewhere in the world. The only significant thing that happened on Sept 11, 2002 was a gun battle between the police and Al-Qaeda suspects in Karachi.

Another important event this week was the 57th UN General Assembly in which President Bush addressed the issue of a possible preemptive strike on Iraq. President Musharraf in his speech addressed the issue of the prolonged stand-off between Pakistan and India and the importance of peace in the region. Since neither of these speeches were as stern as expected they had minimal impact on the market.

THIS WEEK'S PERFORMANCE

Speculation over possible terrorist attacks causing investors to stay away along with lack of any favourable company or economic news, resulted in the bears getting a stronghold in the stock market. The KSE-100 declined by 1.80% to 1954.66 points from over 2000 points at the close of last week.

We had repeatedly asserted over the previous few weeks that the market was highly over bought and that a correction was overdue. The week started out with a much-needed correction especially in PSO. However, as the week continued the bears got an opportunity to assert themselves which finally resulted in the KSE-100 shaving off most of the gains during the previous few weeks.

As average daily volumes declined to 97.54mn shares as compared to 170.09mn shares last week, badla volumes rose as weak holders were struck in their long positions.

OUTLOOK FOR THE COMING WEEK

In our opinion, the market looks fairly directionless, as we can see no trigger, which could cause an upward or downward trend in the market. However, as a whole the market is expected to be largely stable.

THE DAILY DRAMA

On Monday the bears finally gained control over the stock market resulting in the KSE-100 declining by 27.69 points to close the day at 1,981.17 points. The decline was a direct result of profit selling in Hubco, PTCL, PSO and MCB, all four shares declined in value causing the 1.38% decline in the index. Many punters also believed that the decrease was due to expectations of some terrorist attacks on Wednesday September 11. Volumes also declined to 113.80mn shares with Hubco, PTCL and PSO ruling the roost. Due to the tension associated with 9/11, and most people expecting some terrorists attacks volumes thinned marginally to 113.05mn shares and the KSE-100 shaved of further 19.28 points to close at 1,961.89 level. Bears again emerged victorious over the bulls with profit selling in the pivotal stocks continued. In addition to possible terrorist attacks it was also widely believed that the market is finally correcting itself after a prolonged bullish phase.

As expected, the KSE-100 index somewhat settled on Wednesday, as despite strong bearish pressure short-covering in key stocks at lower levels resulted in the KSE-100 rising marginally to close 1,962.06 points. Volumes declined considerably to 78.46mn shares, largely due to lack of institutional support and the investors by and large keeping away from the market.

Although Thursday saw a recovery in the KSE-100 during the first half of the trading day, profit selling in key stocks later in the day resulted in the KSE-100 declining by 7.28 points to close at 1,954.78 points. The see-saw trend in the market resulted in both the bulls and bears being active and as a consequence the volume increased to 95.73mn shares.

Friday was a largely uneventful day with the KSE-100 declining marginally to close the week at 1,954.66 points. Volumes remained stable with Hubco and PSO being the most active stocks.

MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

7.79

7.65

-1.80

Total Turnover (mn shares)

850.44

487.70

-42.65

Value Traded (US$ mn.)

651.24

461.81

-29.09

No. of Trading Sessions

5

5

 

Avg. Dly T/O (mn. Shares)

170.09

97.54

-42.65

Avg. Dly T/O (US$ mn)

130.25

92.36

-29.09

KSE 100 Index

2008.86

1954.66

-2.70

KSE All Shares Index

1251.62

1219.85

-2.54

Source: KSE, MSCI, KASB