KARACHI, Aug 2: Suicide attack on the prime minister-designate Shaukat Aziz triggered across-the-board panic selling on the stock market on Monday, wiping out 83 points from the KSE index and Rs21bn from the market capital.
"Bears exploited the post-attack situation beyond their mandate in the absence of leading bulls but it could well prove short-lived affair despite reports of high alert as bulls have the courage and guts to fight back in an identical situations," says a leading broker.
An idea of the prevailing confusion after the trading resumed may well be had from the fact that there were more sellers than buyers, and in the process prices kept sliding on all the sectors, overvalued ones being in the forefront.
Textile shares led the market to decline, signalling apparently implications of the recently signed WTO agreement for it, vowing to progressively eliminate subsidies and tariffs for developing countries.
The KSE 100-share index plunged by 83.09 points or about 1.57 per cent at 5,206.83 as compared to 5,289.92 at the last weekend as all the leading base share finished sharply lower under the lead of OGDCL and PTCL. The two have a weightage of 35 per cent in it and both suffered sharp pruning.
Finance Minister Shaukat Aziz has a special relevance to the stock investors as it was his policies which pushed the KSE 100-share index higher by 300 per cent during the last couple of years and made many overnight millionaire.
The index had risen to 5,620 from 2,000 points during the last couple of years, pushing the market capital to above $25 billion in between owing to his capital market reforms.
"His removal from the Pakistan financial sector could have dealt a serious blow to the stock market and those who are eying the index level of 6,000 after his election as prime minister may have to readjust their future targets," says a leading broker.
Although he survived the attack, its fallout on the stock market was terribly negative as everyone tried to get of out his long positions followed by more threats of terrorist attacks. He was returning after addressing a public meeting in the central Punjab in connection with his election campaign.
The situation was further aggravated by reports of killing of five armymen in a terrorist attack in Balochistan. "Investors are worried over the deteriorating law and order situation and may stay away after liquidating their long positions," analysts said, adding "bad time may be ahead if the violence continues in coming weeks also."
All the leading shares fell in unison but there were no buyers at the falling prices as investors were more concerned about the future market outlook rather than the attractive bait of lower levels.
Dividend announcements from the Security Papers, 55 per cent cash, and an interim of 20 per cent by Faysal Bank were well-received in the market as was reflected by an increase of Rs9 in the share value of the former.
Other good gainers were led by Nestle MilkPak, up Rs15 followed by Jahangir Siddiqui Bank, Lakson Tobacco, Millat Tractors and Pak Elektron, up by Rs3.75 to Rs5.90. Losers were led by Colgate Pakistan, Packages, Javed Omer, Aventis and Shell Pakistan, which suffered fall ranging from Rs8.50 to Rs12.
Trading volume fell to 189m shares from the previous 222m shares as the losers maintained a strong lead over the gainers at 221 to 66, with 39 shares holding on to the last levels.
Fauji Fertilizer Bin Qasim topped the list of actives, easy 25 paisa at Rs20.95 on 40m shares followed OGDCL, sharply lower by Rs2.20 at Rs62.70 on 24m shares, D.G. Khan Cement, up 15 paisa at Rs55.50 on 19m shares, PTCL lower 75 paisa at Rs42.80 on 13.m shares and T.R.G. Pakistan, easy 15 paisa at Rs17.65 on 8m shares.
Other actives were led by National Bank, off 85 paisa on 7m shares, Askari Bank, lower 85 paisa on 6m shares, Hub-Power, lower 55 paisa also on 6m shares, Lucky Cement, off 65 paisa on 6m shares and Fuaji Fertilizer, lower 55 paisa also on 6m shares.
FORWARD COUNTER: Pakistan Petroleum came in for renewed selling owing to the panic prevailing on the ready counters, off Rs3 at Rs104.35 on 16m shares followed by OGDCL, lower Rs1.95 at Rs62.95 on 11m shares, F.F. Bin Qasim, easy 10 paisa on 6m shares.
But on the other hand, PTCL attracted active selling and fell by 65 paisa at Rs43.10 on 4m shares and Hub-Power, off 60 paisa at Rs303.30 on 2m shares. Others were modestly traded.
DEFAULTER COUNTER: Barring Crescent-Standard Bank, which came in for active selling at the higher level, lower 40 paisa at Rs9.60 on 0.216m shares, all others were modestly traded mostly on the lower side.
