THE buying euphoria initiated by the official launching of the Margin Trading System along with two other leverage products for the ready section by next Monday was well-sustained on the share market last week as investors remained optimistic about their positive impact on the share business.

The market witnessed a lot of pre-MTS launch portfolio adjustments as a section of leading investors sold some of the blue chip to take positions on the 27 shares eligible for MTS funding.

The KSE 100-share index though showed either-way erratic movements, the close was on the higher side as it added another 45.22 points at 12,045.25 to the previous week’s big rise of about 800 points.

The sustaining of the benchmark above the coveted level of 12,000 points could go higher amid alternate bouts of buying and selling on technical grounds. As far as bomb blasts and suicide attacks were concerned, the investors had learnt to live with
them.

Analysts said the prevailing optimism in the market about the modified mode of previous CFS indicated that it would fill in the massive funding gaps for the ready section after having imparted depth to the share market.

Background news both on the economic and political fronts may not be ideal for the launching of a new product, but investors seemed to have adjusted themselves sans foreign ones to operate in the given environment, they said.

The trading, however, resumed on an easy note partly in the absence of foreign investors and partly to local selling in an overbought market but on extreme gains as there were buyers at dips.

Political tensions, negative perceptions about the state of the economy and bad news from the Arab world followed by political unrest also worked against the underlying sentiment.

But the situation improved after mid-week as investors were back in the market and covered positions in the oil, banking and fertiliser sectors, amid actively traded sessions.

The reaction was, however, mild and reflected consolidation of major gains netted last week but in no way reflected return of bear at this stage despite the fact that news both from financial and political fronts were not positive.

The KSE 100-share index early suffered a modest pruning after having passed through wild either way movement reflecting a tussle between the giants to tilt price balance in their respective favour.

The fertiliser sector led the market advance under the lead of Engro Corporation, Fauji Fertiliser and Fatima Fertiliser on reports that their depository receipts (ADR) will be listed on the Wall Street followed by MCB, National Bank, Pakistan
Oilfields, Bata Pakistan, Nishat Mills and some other leading oil shares, were also traded actively on the higher side.

“The market witnessed a massive tug of war between the local financial groups,” commenting on the erratic market behaviour,” said analyst Hasnain Asghar Ali. “Some of them supported bulls on the perceptions of availability of leverage and foreign support and its positive impact on blue chips but on the other hand financial institutions were among the prominent sellers,” he added.

He said both the groups were divided over the future direction of the market and warned that volatility could well be the hallmark and investors should play safe.

Analyst Ahsan Mehanti feared heating up of political scene in Sindh after the estranged relations between the coalition partners MQM and the PPP over the remarks of Sindh Interior Minister Zulfiqar Mirza.

But the reaction was modest and more than one ways reflected that bulls would be back and make the post-MTS sessions a success story on the expected depth and return of leading foreign investors as an active buyers, Mehanti hoped.

“The future market would move within its technical demands but one thing is clear that leverage facility, when fully operative, could tilt the balance in favour of the bulls at the current lower levels,” predicted Samar Iqbal another stock analyst.

Future contracts: Engro Corporation led the list of keenly sought shares on this counter, which came in for strong foreign and local buying and rose sharply higher on higher turnover, Fauji Fertiliser Bin Qasim, Fauji Fertiliser, Pakistan Oilfields, National Refinery and some others shares also remained in the limelight.

According to analysts most investors took new positions at the current lower levels amid hopes of capital gains after the leverage facility was in palace by next week.—Muhammad Aslam