March 5, 2003	Wednesday	Muharram 1, 1424

KARACHI, March 4: Stocks on Tuesday fell across a broad front followed by active selling in the energy shares, warning investors any snap rally amid fears of Iraq war could be highly deceptive and is fraught with high financial risks.

The KSE-100 share index plunged by 71.82 points or about 3 per cent at 2,447.02, eroding Rs15 billion from the market capitalization at Rs558.767 billion as all the leading base shares fell like the house of cards on active selling.

Apart from the negative rumours about the interim dividend from the Hub-Power, the other destabilizing factor was the absence of follow-up support, notably from the financial institutions. Rather some of them hastened to get out of the market after having sold bulk of their overnight purchases.

The Hub-Power board meets tomorrow and according to analysts it may not announce the interim dividend at the rate of 30 to 35 per cent as originally speculated but may lower it to around 2.5 per cent despite the fact that cash flow has been fairly steady.

As rumour of a lower interim reached the market, investors hastened to cash in on the available margin of profits, pulling its share value lower by Rs1.60 at Rs35 on 52m shares. Other blue chips followed its lead and fell across-the-board.

But largely it was the weakness of the energy shares, which fell in unison on heavy selling under the lead of Shell Pakistan, PSO and Pakistan Oilfields.

The massive battering received by most of the pivotals signals “any snap rally at this stage may not be sustained amid fears of US attack on Iraq any time” adding “Monday’s bombing, which killed six persons could be a pointer for the shape of things to come”.

“Only fools could think of having stake in shares in the backdrop of hovering cloud of war on Iraq”, says an analyst commenting on Monday’s snap rally said “war do terribly affect sensitive stock markets the worldover more than the foreign trade and local bourses could hardly be an exception”.

The Iraq war may not be that simple as being interpreted by some, the oil war could turn into the mother of all battles as it is linked to wider national interests of all the nations of the world, says a leading broker, and that is perhaps why no sane investor is inclined to make long-term investment.

“The market will remain volatile and play hide-and-seek game with the investors until the Iraq situation is clear”, he said.

Although minus signs dominated the list, some of the second-liners managed to finish modestly higher under the lead of Al-Mal Securities, EFU General Insurance, Bank Al-Habib, Atlas Battery and Clariant Pakistan, up by Rs1.50 to Rs2.10. They were followed by Tri-Pack Films, Crescent Textiles, 10th and 14th ICPs, Bank of Punjab after the announcement of cash dividend at 17.5pc and Fatima Enterprises, up by Rs1.25 to Rs1.65.

Losers were led by Pakistan Reinsurance Co, Pakistan Refinery, Pakistan Oilfields, Unilever Pakistan and Shell Pakistan, which suffered fall ranging from Rs6 to Rs17.80.

Other major losers included ICI Pakistan, Fauji Fertilizer, Engro Chemical, Siemens Pakistan, Pak-Suzuki Motors, Honda Atlas, Mari Gas, National Refinery and Abbott Lab, off Rs2 to Rs3.

Trading volume sharply fell to 123m shares from the overnight’s 196m shares as losers forced a strong lead over the gainers at 129 to 45, with 28 shares holding on to the last levels.

Apart from Hub-Power, the other actives were led by PSO, off Rs5.35 at Rs189 on 22m shares, PTCL, lower 65 paisa at Rs20.95 on 18m shares, Sui Northern Gas, off one rupee at Rs21 on 4m shares and Pakistan Oilfields, down Rs7.60 at Rs166.55 also on 4m shares.

Other actives included FFC-Jordan, lower Rs1.30 on 3m shares, Pak PTA, easy 55 paisa also 3m shares, Telecard, lower 55 paisa on 3m shares, Engro Chemical, off Rs3 also on 3m shares and ICI Pakistan, lower Rs2.25 on 2m shares.

FORWARD COUNTER: Speculative issues on the forward counter remained under heavy pressure throughout the session and fell sharply under the lead of PSO, off Rs5.90 at Rs189.50 on 9m shares.

MCB, ICI Pakistan, Fauji Fertilizer and Engro Chemical followed it, off by Rs1.20 to Rs3.45 at Rs29.75, Rs44.05, Rs73.50 and Rs76.50 respectively.

Hub-Power topped the list of actives, off Rs1.65 at Rs35.05 on 17m shares followed by PTCL, lower 85 paisa at Rs20.95 on 4m shares and FFC-Jordan Fertilizer, lower 80 paisa at Rs10.50 on about a million shares.

DEFAULTER COMPANIES: Trading on this counter was relatively slow where shares of only eight companies came in for trading. The most active among them was Custodian Modaraba, off 40 paisa at Rs2.25 on 4,500 shares followed by Automotive Battery, up by Rs1.50 at Rs6.50 on 2,500 shares and Allied Motors, easy one rupee at Rs9 on 1,500 shares.

DIVIDEND: Bank of Punjab cash 17.5 per cent, Metropolitan Bank 20 per cent and Apollo Textiles five per cent.