Selling pressure to exist on Pakistan's stock market
Pakistan Times Business & Commerce Desk

ISLAMABAD: The lack of funds for downward margin financing and massive fluctuation spread could accentuate selling pressure in the local stock market that lost about seven per cent in last two days, experts warned requesting anonymity.

Market experts from Karachi and Islamabad have observed at the juncture of market undergoing thorough correction downward that players inability to pay the downward differences besides the high rates of carryover transactions could perpetuate panic selling leading to a crash-like situation, reports 'The Nation'.

The experts find circuit breakers enforced by the Securities and Exchange Commission at seven per cent on upside and five per cent decline in one day effective to save the market from crash.

However, they pointed out that the market high flight was merely based on a few blue chip stocks of the state-owned companies namely the OGDC, PSO, and the PTCL.

Therefore, they feel dire need for consolidation of the market at elated position by involvement of the private sector players in both the primary as well as secondary market activities.

Broad-based Activity

Thus they stressed the need for broad basing the daily activity, deepening of the market at primary level, and strengthening of the domestic investor base.

Some of them were of the view that the market was on jet flight only because of the COT market was being phased out with margin financing, which is to be completed by June ahead.

Once the COT called badla here is abolished and replaced with the margin financing the market would stabilise from the current state of the extra-volatility.●