KARACHI, July 26: Stocks on Monday resumed trading on a bearish note as fears of badla-related sell-off kept leading investors on the sidelines for most of the session leading to a fresh decline both in the value and the volume.
The KSE 100-share index was off 63.22 points at 5,346.15.
Steep fall in the turnover figure indicates that investors were in two minds and could not precisely decide whether or not take new positions at the dips. Higher carryover rates around 13 per cent and volume at 45m shares dominated the trading as no one was inclined to go beyond pre-determined price limits and made guarded buying on the undervalued counters.
"I don't think bears could push the market further lower," says a leading broker. "It has entered a crucial week as board meetings of half a dozen mega companies are due and there is talk of higher interim dividend and bonus shares."
The KSE-100 share index suffered fresh fall of 63.22 points or 1.17 per cent at 5,346.15, again breaching the barrier of 5,400 as against the weekend close of 5,409.37 points.
Market capital also suffered a sharp decline of Rs16.663bn at Rs1,444.489bn as compared to Rs1,461.152 at the last weekend. "There is a talk of liquidity crunch as a massive amount of cash has found its way into the IPO of Pakistan Petroleum and until it is back in the market the activity may remain sluggish," analysts predict.
According to market sources about Rs20 billion have been invested in the share offer of PPL and those having enough liquid funds fear panic selling any time because of overbought carryover market.
An idea of sluggishness may well be had from the fact that the traded volume fell to a year's low figure of 126m shares as compared to 164m shares at the last weekend.
Many may not have the idea of negative fall-out of the IPO issue on stock trading, analysts said adding but what seems to have further aggravated the situation was the absence of financial institutions from the market for good reasons too.
"There is perception, which was shared by many that bulls are planning to resume their upward march to 6,000 points, but before it they push prices of leading shares, notably index-based, further lower and then to buy," brokers said.
As a result, PSO, OGDC, PTCL, Engro Chemical, Hub-Power, Fauji Fertilizer, whose board meetings are due by the end of the current week, fell sharply lower. But some of the secondliners managed to attract modest support from some of the genuine investors and managed to finish with modest gains under the lead of some energy, cement and bank shares.
The decline was widespread and covered the entire lists. The following being some of the leading losers: Lakson Tobacco, Siemens Pakistan, Haroon Oil, EFU Life Insurance, Shell Pakistan, Dream world, Thal, Arif Habib Securities and Glaxo-SKF, falling by Rs4.50 to Rs9.95.
Some of the leading shares managed to finish on the higher side, prominent among them being Ahmed Hassan Textiles, Gadoon Textiles, Nishat Chunnian, IGI Insurance, Nestle MilkPak and Ferozsons Lab, up by Rs3 to Rs5.50.
Trading volume fell to 126m shares from the previous 164m shares equal to a single-session tally of an active issue as losers maintained a strong lead over the gainers at 216 to 80, with 34 shares holding on to the last levels.
Bank of Punjab came in for modest selling and fell to close lower by Rs2.35 at Rs68.25 on 12m shares, followed by PICIC Investment Bank, up 30 paisa at Rs18.65 on 9m shares, National Bank, off Rs1.10 at Rs70.25 also on 9m shares, DG Khan Cement, easy Rs1.30 at Rs55.60 on 8m shares and PTCL, lower by 25 paisa at Rs43.90 on 8m shares.
Other actives were led by Maple Leaf Cement, lower 30 paisa on 8m shares, OGDC, off 60 paisa also on 8m shares, FF Bin Qasim, easy 65 paisa on 8m shares, PICIC Growth Fund, off Rs2.50 on 7m shares and Lucky Cement, lower Rs1.05 on 4m shares.
FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their ready counters and fell sharply lower under the lead of Pakistan Petroleum, off 2.20 at Rs110.75 on 11m shares followed by Hub-Power, easy 30 paisa at Rs31.45 on 4m shares, National Bank, off one rupee at Rs70.45 on 3m shares, OGDC, lower 65 paisa at Rs66.05 on 2m shares and DG Khan Cement, off Rs1.30 also on 2m shares.
PSO was leading among the losers, off Rs2.84 at Rs269.31. The notable feature was that trading also resumed in the August settlements side by the side the maturing July contracts.
DEFAULTER COS: Trading activity on this counter remained slow as prices generally fell modestly on renewed selling. There was no major deal in any of the active shares.
DIVIDEND: Century Paper and Board Mills, cash 45 per cent for the year ended June 30, 2004.
