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Market sustains gains on strong institutional support

But larger fall or panic selling from any quarter was averted thanks to presence of strong institutional support in the absence of foreign investors who stayed on the sidelines apparently awaiting return of sanity to the city.

After moving either-way, throughout the last week, the KSE 100-share index finally finished with a fresh modest decline of 27.20 points at 12,340.42 as compared to 12,367.62 a week earlier.

It was a week of fluctuating fortunes for both bulls and bears as investors played on both sides of fence and did not take long positions apparently awaiting the dust settles down on the law and order front.

Although the city limped back to normalcy by the end of the week, some liquidity-related issues did worry investors, which led to selling on selected counters to clear the outstanding dues.

Investors claim as the existing CFS ceiling of Rs55 billion is already touched,the market needs more funds to keep up the rising tempo and suggested increase was between Rs65 and 70 billion.

But official say the prevailing CFS rates on the money markets, are well below the upper limit of 18 per cent rates, which reflects there was no pressure on the money supply.

However, difference of opinions and perceptions on the issue did take its toll some time in low volume and sometime in active selling before financial institutions intervened to restore sanity to stock trading. Leading shares initiated the recovery and came in for active follow-up support as the city is limping back to normalcy after last Saturday's carnage.

The market's positive mood was also well reflected in the KSE 100-share index, which at one stage hit the week's peak level at 12,499.13 but late selling triggered by reports of a bomb blast in Peshawar, which killed over two dozen persons, pushed it down.

Incidentally, the market did not plunge as it does in similar conditions as the prevailing one in the backdrop of city killing as financial institutions launched a big rescue operation to protect the saving of small and genuine investors. However, investors will take couple of days more to be fully prepared to make fresh bigger commitments apparently anticipating resumption of covering operations at the lower levels by the foreign investors.

"Unpredictable is the behaviour of the KSE bourse having an enormous capacity to absorb massive shocks", a leading stock analyst Ashraf Zakaria said " some times it gives in to stray negative news and sometime it ignore the most devastating ones".

Investors, relying on its inherent strength on certain occasions ignore massive negative flutters but it could not absorb manipulated selling by the big ones as it did in last year's June crash.

Although institutional traders played a big role to keep the market in a positive mood some of the bargain-hunters followed them saving the market from a possible crash.

Meanwhile, NIB Bank, in which a Singapore Bank has a big stake announced yesterday that it has purchased controlling shares of Pakistan Industrial Credit & Investment Corporation(PICIC)at the rate of Rs78 per shares.