04 June 2004	Friday	15 Rabi-us-Saani 1425

KARACHI, June 3: The KSE 100-share index on Thursday suffered a second single-session largest fall in its trading history after it plunged 183 points or 3.35 per cent on panic selling triggered by volatile law and order situation in the city, MMA strike call, political instability and rumours of tax on capital gains in the new budget.

The largest single-session fall was, however, recorded on September 16 last year when it fell by 206.50 points on massive badla-related liquidation by leading investors. It breached through two barriers and finished at 5,279.09 points. The net fall eroded Rs47.197bn from the market capital at Rs1,428.137bn.

"There is nothing to worry about the market collapse as it has the capacity and the will to rise by the same amount tomorrow," analysts said, adding "bears have targeted OGDCL and PTCL as one rupee decline in each erodes 20 points from the index." Both have fallen by Rs3.05 and Rs1.05, which means an erosion of 80 points.

Perceptions of political instability in Sindh after the president's offer to the PPP, the largest party in the Sindh Assembly, to form a consensus government was also considered a negative factor at this stage, analyst said. "In normal conditions the offer should have been a stimulating factor for the stock market as it will lead to the majority rule."

There was, however, a panic from the opening bell as investors tried to get out of the market, fearing fresh incidents of violence but there was no matching buying from any quarter, including financial institutions.

Prices kept declining across the board like house of cards under the lead of leading base shares, notably OGDCL, Hub-Power and PTCL. The KSE 100-share index finally finished with a massive slashing of 182.75 points at 5,279.09, breaching two barriers in a single session. The overnight close was 5,461.84 points.

Cement shares, which have been sustaining their bull-run on the rising prospects of exports to Dubai because of steep increase in prices there, also came for a heavy selling and ended sharply lower amid larger volumes.

"No one could deny the fact that the situation in the city is not ideal as far as the law and order situation is concerned, but such a massive price erosion was not warranted by the objective conditions," some analysts said, adding "bears who were at look out for a proper opportunity managed to cash in on the prevailing political uncertainty."

But the market has the capacity to minimize it massive losses even tomorrow (Friday) despite a MMA strike, they said. "The Friday session could be very crucial for the future market direction."

Minus signs dominated the list under the lead of Glaxo-SKF, Atlas Honda, Aventis, Shell Gas, IGI Insurance, Arif Habib Securities and Javed Omer, off by Rs9 to Rs36.25, the largest fall being in Javed Omer. They were followed by Bhanero Textiles, Lakson Tobacco, Gatron Industries, National Refinery, Pakistan Refinery, PSO, Pakistan Oilfields and Clariant Pakistan, off Rs5 to Rs7.90.

However, shares whose floating stock is short, managed to put on good gains under the lead of Shell Pakistan, Packages, EFU General Insurance, Exide Pakistan, Haroon Oils, Unilever Pakistan and Rafhan Maize Products, which posted gains ranging from Rs2.90 to Rs10.

Trading volume fell to 502m shares from the previous 682m as the losers maintained a strong lead over the gainers at 345 to 73, with 26 shares holding on to the last levels.

Fauji Cement again topped the list of actives, off one rupee at Rs18.70 on 93m shares, OGDCL, sharply lower by Rs3.05 at Rs64.75 on 38m shares, D.G. Khan Cement, down Rs3 at Rs59.50 on 36m shares, FF Bin Qasim Fertilizer, easy 50 paisa at Rs19.30 on 35m shares, Saadi Cement, off one rupee at Rs17.65 on 30m shares and PTCL, lower by Rs1.05 at Rs41.00 on 26m shares.

Other actives were led by Chakwal Cement, lower 80 paisa on 30m shares, Hub-Power, easy 60 paisa on 16m shares, Lucky Cement, off Rs2.15 on 12m shares and Maple Leaf Cement, lower by Rs2.25 also on 12m shares.

FORWARD COUNTER: Speculative issues also came in for massive selling and finished sharply lower under the lead of MCB, ICI Pakistan and PSO, which suffered fall ranging from Rs2.75 to Rs7.10.

Bank Alfalah also fell by Rs1.95 at Rs61.50 on 13m shares followed by PTCL, easy one rupee at Rs41.25 on 8m shares, Hub-Power lower 55 paisa at Rs32.35 on 5m shares, F.F. Bin Qasim, lower 50 paisa at Rs19.50 on 4m shares and Sui Northern Gas, off Rs2.75 at Rs65.30 on 3m shares.

DEFAULTER COS: Biafo Industries led the list of actives, up 85 paisa at Rs14.35 on 3.343m shares followed by Dandot Cement, off one rupee at Rs1.60 on 2.200m shares and Unicap Modaraba, unchanged at Rs3.25 on 2m shares.

RIGHT SHARES: Progressive Insurance Company at the rate of 70 percent.