Fear of expected ‘Exit strategy’ haunts KSE; 23 points lost

LEADER REPORT (11072008)
KARACHI: The signs of recovery from last trading session vanished, as the market opened on a negative note and approached its lower band on Thursday. The inactive performance of the previous sessions was repeated, while at the end, a recovery was witnessed in the index only attributable to HBL as it jumped from the negative zone to positive and closed in its upper band. It attributed 45 points to the index which closed down by 23 points at 11,773 points.
The doubts about the exit strategy which is being formalised by the KSE and SECP, made investors reluctant from buying. The strategy is expected by market participants to present a proposal of buying shares from investors at a lower price. The measures taken by SBP appear to be successful to stabilise rupee at a sustainable level.
The flight of foreign investment accelerated as investors were provided with a chance to exit in the last trading session and an outflow of $12 million was witnessed.
All sectors followed the bearish trend and majority of the scrips closed hitting their lower circuits. The slight improvement in volumes in the last session did not appear on Thursday and extremely low volumes were witnessed of mere 13 million shares. The volume leaders were MCB, OGDC and FFC, respectively. The two top volume leaders closed hitting their lower circuits while FFC traded in its positive zone, despite the negativity prevailing in the market.
Measures taken by the regulators will not help the market in the long term, regulators will have to set the market free to decide its own direction. The political situation, economic imbalances and law and order situation in the country are the major disturbing factors. While the market has discounted these factors to a certain extent, if the investors confidence is regained and the sentiments are improved, market is expected to move in the upward direction.