Depressed sentiment: 53 brokers on the verge of default (24122008)

LEADER REPORT
KARACHI: The day remained dull with depressed investors and members confidence, due to the lack of liquidity and on the other hand tension between India and Pakistan.
The index declined another 3.5 percent on Tuesday, as the index closed at 6,963 points after shedding 254 points. The plunge has accumulated to 24 percent after the removal of floor from 9,144 points. Some activity was witnessed in the second and third tier stocks, while the blue chip scrips maintain the dead stance. Volumes remained at the lower end, as mere 27 million shares were witnessed. 182 scrips were traded, out of which 165 scrips declined, while 17 scrips advanced.
CFS issue has brought member to default
The brokers filed litigation against NCCPL for contempt of court, as on Friday the court ordered NCCPL to liquidate the shares in CFS and members to submit 7 billion bank guarantee. On Friday evening, NCCPL demanded mark to market losses from member's exposed in CFS. While court decided against the brokers, as a result NCCPL gave a deadline to brokers to top up the exposure of which 53 members, were not able to submit till time.
High volatility in oil prices, moving from four-year low
International oil prices went below USD 40 per barrel. High volatility has been witnessed in oil prices due to the expectation of further cut by OPEC in oil production.
Index to regain momentum in longer time frame
Investors' sentiment is anticipated to remain flat as they await to see the bottom of the market where long-term investors are eyeing to accumulate various scrips. While the lack of liquidity, weak economic and law & order condition are hurdles in the markets rebound, stable earning and favorable conditions may bring the market back on track as investors interest may flow back with various scrips becoming attractive based on values and dividend yields in the long term perspective.