Stocks rebounded slightly on Friday after four consecutive days of falls. This was caused mainly due to slight price increases of high market capitalization penny stocks. According to the Director General of the Securities and Exchange Commission Mr. Malik Cader the prevailing down trend has caused companies to re-assess their Initial Public Offers. He further said that there are another 20 IPOs due this year.
Forced selling has been continuing in line with the policy of the regulator Securities and Exchange Com-mission to recover debts while over Rs.6 Bn has been locked up in the two recent IPOs. Concerns remain over margin calls that force selling and low liquidity.
Foreign investors were on a selling side during the week creating a net outflow of Rs.307.28 Mn. Foreign sales for the week stood at Rs.808.97 Mn while foreign purchases were Rs.501.69 Mn
The turnover for the week was Rs.8.88 Bn with 609.58 Mn shares changing hands. The average daily turnover stood at Rs.1.78 Bn, down 38.38% WoW.
The benchmark ASPI plunged 157.47 points WoW to close at 6892.56 points, and the MPI dipped 161.57 points Wow ending at 6439.30. The lowest since 6th January being 6871.68.
In our view, we expect the market to perform at cur-rent levels in the short term. However speculative trading on second tier counters can continue further. It is advisable to invest based on fundamentally strong stocks in view of long term gains.