KARACHI, Oct 14: The KSE 100-share index on Tuesday breached through the psychological barrier of 4,000 points on panic selling in PSO followed by reports of further delay in final bidding date for its sell-off and plunged by 139.10 points or 3.40 per cent at 3,947.10, eroding Rs30bn from the market capital at Rs863bn.
Its share fell by Rs14 from the overnight highs followed by minister for privatization statement that it may be sold to one of the short-listed strategic buyers after Eid and dragged down all the leading shares on persistent selling but no willing buyers even at the falling prices.
The fall was widespread and massive, signalling the exit of big ones from the market after cashing in on the available margin of profits.
Other leading base shares, notably PTCL and Hub-Power, which together hold a weightage of 43 per cent in the index followed it triggering a lot of sympathetic selling on the other blue chip counters.
“The steep decline in the index reflects that it is progressively losing its grip on the psychological barrier of 4,000 points,” analysts said. “Outflow of huge cash amounts for the National Bank and OGDC shares may be one of the reasons behind the current sell-off.”
“The market is facing both the liquidity crunch and normal demand from any quarter,” some others say “political standoff is also taking its toll in the form of long-term investment from the institutional traders.”
The sale of National Bank shares, which opened for public subscription of Monday for three days, may also be affected owing to general slump in share values as well as its counterpart in the ready section, which fell below its minimum rate of Rs46 to Rs45.85.
On the top of it is an all-time increase in lint cotton prices, which have soared to Rs3,870.30 per 40 kg, a level never touched before. The weak textile sector, which account more than a half of the total listed companies, could have a chain of negative factors on all the industrial shares and in turn on exports.
“These appear to be the long-term perceptions in the minds of investors who may have decided to get out as share business may not be that attractive as it has been during the last couple of months,” says a leading broker.
Although the minister of privatization announced an ambitious disinvestment programme of some mega state-owned units including Habib Bank and energy giants OGDC, investors have pinned hopes on the sell-off of PSO during the current month.
Further delay in its final bidding date from March this year to December has raised many questions in investor mind about the official intentions in the backdrop of adverse press comments over the sell-off of a strategic and profitable state-owned unit.
All the leading shares, notably National Bank, Pakistan Oilfields, ICI Pakistan, MCB, T.R.G Pakistan, ICP SEMF and most of the second-liners finished well below their circuit breakers.
Big losers were led by PSO, Shell Pakistan, Grays of Cambridge, Javed Omer and Unilever Pakistan, which suffered fall ranging from Rs12.95 to Rs45, followed by Pakistan Refinery, Lakson Tobacco, IGI Insurance, Dawood Hercules, National Refinery and Pakistan Oilfields, off Rs6.10 to Rs9.50.
Gains on the other hand were fractional barring Diamond Industries, Pakistan International Containers, Shahtaj Textiles and Ferozsons Lab, up Rs1.05 to Rs5.
Trading volume showed a modest increase at 177.050m shares from the previous 148m shares as losers maintained a strong lead over the gainers at 294 to 22, with 24 shares remaining unchanged at the last close.
Hub-Power led the list of actives, off Rs1.30 at Rs34.75 on 34m shares followed by PTCL, lower 80 paisa at Rs36.55 on 26m shares, National Bank, off Rs1.15 at Rs45.85 on 14m shares, Fauji Cement, easy by 10 paisa at Rs10.05 on 13m shares, PSO, sharply lower by Rs14 also on 13m shares.
Other actives were led by FFC-Jordan Fertilizer, lower 85 paisa on 8m shares, Dewan Salman, off one rupee on 7m shares, Maple Leaf Cement, easy 85 paisa also on 7m shares, Sui Northern Gas, lower Rs1.10 on 5m shares and MCB, off Rs.2.30 on 4m shares.
FORWARD COUNTER: Speculative issues also came in for active selling and fell sharply under the lead of PSO, off Rs14.40 at Rs274.10 on 9m shares followed by Hub-Power, easy by Rs1.35 on 17m shares and MCB, lower by Rs1.80 at Rs48.45 on 1.365m shares.
PTCL was marked down by 60 paisa at Rs33.45 on 9m shares. Fauji Fertilizer, Engro Chemical and ICI Pakistan also received massive battering and were quoted lower by Rs2 to Rs3.25 at Rs89.00, 78.20 and 73.50 respectively.
DEFAULTER COMPANIES: Active selling was also witnessed on this counter as leading shares finished easy under the lead of Unity Modaraba, off 50 paisa at Rs1.50 on 0.130m shares and Standard bank, unchanged at Rs5.50 on 0.292m shares. Others showed fractional changes.
DIVIDEND: Elite Capital Modaraba, cash 3.5 per cent, Fayzan Manufacturing Modaraba, third quarter interim at the rate of 3 per cent, Ali Asghar Textiles, right shares at the rate of 100 per cent at a discount of Rs3 per share, Dewan Salma, Pakistan Slag Cement, Transmission Engineering and Prudential Discount House, all nil for the year ended June 30, 2003.
BOARD MEETINGS: Bawany Air Products and Bank of Punjab on Oct 16, Progressive Insurance, J.A. Textiles, Constellation Modaraba, on Oct 17, Latif Jute, Pakistan Industrial and Commercial Leasing, Pak-Gulf Leasing, Standard Investment Bank, on Oct 18, Caravan East Fabrics, B.F. Modaraba, Safa Textiles, Shield Corporation, Punjab Modaraba, EFU Life Assurance, EFU General Insurance, Ittehad Chemicals, on Oct 20, Security Leasing, Dadex Eternit, Aventis Pharma, on Oct 22, Hub-Power on Oct 23 and Fauji Fertilizer on Oct 27.
