Equities remained choppy seeking short term direction closing the day marginally higher. Although stocks opened up, jobbers remained most active with institutional activity confined to selling and foreign funds remaining relatively inactive, possibly after recent declines witnessed in world markets. PSO and PTC were the star performers, with market betting on OMC giant announcing a higher dividend payout in its 1QFY10 result. PTC however has taken everyone by surprise with speculation that the telecom has been cornered by a couple of large local groups, despite reports that some union activist are pursuing the courts to refrain from registering properties into Etisalat's name. The wider market continued to keep everyone guessing with cement stocks remaining strong, possibly having under performed over the last few days. Holding companies namely JSCL and AHSL finally took a breather having gained substantially since last few weeks. Another key factor keeping market unsteady is the new margin regime, that requires brokers to furnish heavy margins to the exchange, probably hampering trading in short term, but in our view very positive in the longer term.
With market lacking immediate triggers, the Army preparing itself for a grand operation against extremists in the treacherous South Wazirstan region and possible court cases against the ruling party men that benefited from the notorious NRO, we expect equities to remain sideways. Once again foreign flows will determine the market direction as locals are not willing to take lead.
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