Terrorism mars New Year euphoria on bourses

Capital Viewpoint
Law and order situation across the country especially in the financial capital Karachi has started taking its toll on the short-term investment, as well, as the equities market shed significant value after the Aushura procession carnage last week.
The market could have only three days week ending Thursday last, as Monday and Friday last were holidays. Initially the market was dull and dormant as it opened after the Mondays carnage in Karachi. Therefore, the stocks remained range-bound on both sides and the benchmark ended registering nominal loss.
Wednesday, however, witnessed healthy trade with equities gaining in pursuit of periodical distributions by the blue chip stocks. The market gained nearly a couple of percentiles during the day but profit taking clipped the gain and the Karachi Stock Exchanges Index better by a percentile at the end of the session.
Last session of the calendar year witnessed bearish trends. More than the impact of year-end accounts closing of the banks the market got the impact of law and order situation in Karachi, the home of the countrys mother bourse, pundits observed. They were of the view that the equities were poised to grow out their inherent strength while the environment was not conducive to investment growth.
The short-term investment was already touchy when the long-term investments were already on a halt due to prevalent scenario of politics, security, and fragile economy, they maintained.
December 31 was also the last session before strike called for January 1 in Karachi in protest of the bomb blast in the Aushuras procession besides burning of adjacent markets. Therefore, the bears crept in. and the market lost significant value in one go.
Internally the market was stable and the equities were at lucrative prices. However, the buyers were weird of the law and order situation across the country and recent tense situation in Karachi after incident on Monday last. Sound equities were also offering potentials of handsome payouts for the quarter ending December 31, 2009.
Similarly, traditional gaining euphoria at the beginning of year for fresh allocations by the financial institutions for the New Year was not in sight. On the other hand, analysts feared that the security concerns of investors would mar this New Year potential of bull-run.
In addition to the security threats, the political perplexities were also to undermine encouraging factors. Moreover, the ongoing energy crisis was also to check the industrial activity in the country eventually to mar gaining potential of the stocks of allied industries. President Asif Ali Zardaris repeated statements about the conspiracy theories against the PPP rule were also to shatter the sentiment of the investors.
Therefore, the market during the days ahead is bound to stay directionless. Internal forces were pulling the market upward while the external factors especially security situation was deterring the investors away.