The talk of the market revolved around the surprise exit of Zardari, was the heart reason true? Or is there more to it than meets the eye – When the bourses opened after a long weekend spanning four days on Wednesday the start-off was on a positive note and the KSE-100 benchmark at one point was even up by 90 points. That trajectory however could not be maintained and at the closing bell, exhibiting some edginess the market was down by 111 points.
The talk at the market revolved around the same gossip that the political cognoscenti around the country and abroad were indulging in with such gusto. Why had President Asif Ali Zardari scooted off to Dubai?
The market really was abuzz: Was the ‘heart’ reason being presented by the presidency accurate or was there something more to it than meets the eye? Is he gone for good or will he again pull a fast one on the unabashed pundits who have by now given so many dates of his impending departure without ever blushing on the egg left on their faces when el Presidente remained as firmly entrenched as ever?
The mystery about whether this time round he has really bitten the dust or not would be cleared shortly, but the uncertainty created a situation that pegged the market down. Whatever the truth in the rumours about his ill health or even a resignation in the offing flying around with such increasing intensity, they may well start impacting on the already volatile local bourses. So beware this aspect with a capital ‘B’.
Another reason for the bearish outlook, not just yesterday but overall, was the familiar one: this is the period of time around which activity mostly remain dormant. Mr Ali Malik, CEO of the First National Equities, that most clued in of analysts, believes that this investor indifference was likely to continue for some time – at least another couple of weeks or so.
For those Average Joes who have cash to spare, and wanted to invest it for a quick buck, Mr Malik off hand suggested Fatima Fertiliser, at Rs22.40 not a costly deal. According to Mr Malik, it was likely to go back to its high of around Rs25 as soon as the market recovers. That translates into a capital gain of around 10 per cent by the month’s end or thereabouts.
Mian Nusrat-ud-Din for his part thinks that the downward trend would not be sustained. “The performance of the fertiliser companies, a whole slew of banks and of the oil sector overall has been quite heartening. Three quarterly reports in most of these blue chip companies are already in the public domain. And these are so good that they are bound to attract buyers – both individual and institutional”, said MND.
Regardless of MND’s bullish bent, it is always better for the Average Joe to err on the side of caution. And prudence demands that unless the prospects look exceptionally bright and the economy is really booming, which according to universal consensus is not the case at the moment, one must keep a vigilant eye on one’s inventory. The way to go about it is under-exposing oneself, and limiting the spread to only a few well-chosen scrips.
This approach would not just save one from undue risk but also make the inventory more manageable in terms of retaining one’s focus on the performance of the companies involved, and taking timely action in case there were profits to be booked or selling right in time and getting out before a slide.
The writer is sports and magazines Editor Pakistan Today
