CVT issue continues to take its toll on stock market
By Our Staff Reporter
KARACHI, Sept 14: The KSE 100-share index broke the barrier of 5,100 as leading base shares remained under pressure and fell further under the lead of OGDC and PTCL as negative fallout of the Capital Value Tax (CVT)
continued to take its toll both in terms of price erosions and steep decline in the daily volumes.
No one could precisely predict when the bulls will re-enter the market but leading among them may not be able to resist the temptation of an attractive bait of capital gains for an indefinite period and could resume their covering operations any time just they need a moral booster, brokers said.
The high-ups in Islamabad seems to have taken note of the plight of the market, which had fallen about 18 per cent since the levy of CVT and withholding tax that has increased the cost of physical transactions leading to a steep decline in daily turnover figures.
"There is a strong rumour in the market that the CVT may be withdrawn shortly to restore sanity to stock trading and revive investor confidence in the share business", some analysts predict.
Dividends from some leading companies were on the higher side of the market expectations but they came at a time when investors were worried over the continued erosion in the share value.
Stock prices again fell across-the-board as the index level has entered the danger zone and could breach through the barrier of 5,000 any time in the absence of strong support from any quarter including the financial institutions.
As was speculated it broke the barrier of 5,100 at 5,087.94, off 30.45 points after an early steep decline of 55 points on late covering purchases on selected counters. The session's low was hit at 5,033.56.
The breach of the benchmark of 5,000-point could open flood-gate of nervous selling and it would be pretty difficult to halt it in an atmosphere of uncertainty, says a broker adding "financial institutions should come to the aid of falling market at this stage".
"The market appears to be the victim of falling demand rather than large selling as is well-reflected in its single-session low volume of about 100m shares", analysts said "everyone is awaiting the advent of financial support before taking new positions at the current lower levels".
Minus signs again dominated the list under the lead of Arif Habib Securities, Security Papers, Aventis, Pakistan Refinery, Atlas Honda and Ferozsons Lab, which suffered fall ranging from Rs6.65 to Rs9.80.
The other losers were Shell Pakistan, Gatron Industries, National Foods, Pak-Suzuki Motors, EFU General, Javed Omer and Jahangir Siddiqui & Co, off Rs3 to Rs5.15. Some of the second-liners managed to finish modestly higher on stray support, notable among them being Sham Textiles, Attock Cement, MacPack Films, World Call and Pakistan Paper sack, which posted gains ranging from Rs1.75 to Rs3.40.
Trading volume showed a modest rise at 176m shares as compared to 111m shares a day earlier but losers maintained a strong lead over the gainers at 210 to 68, with 38 shares holding on to the last levels.
The active list was again topped by D.G.Khan Cement, unchanged at Rs55.85 on 26m shares followed by OGDC, off 70 paisa at Rs61.55 on 24m shares, Bank of Punjab, up 50 paisa at Rs64.40 on 12m shares, Lucky Cement, lower 25 paisa at Rs35.50 on 9m shares and Hub-Power, up by 50 paisa at Rs31.20 also on 9m shares.
Other actives were led by Fauji Fertilizer Bin Qasim, lower 30 paisa on 9m shares, National Bank, up by 40 paisa also on 9m shares, PTCL, lower 10 paisa on 8m shares, ICI Pakistan, easy 25 paisa also on 8m shares and Askari Bank, higher 70 paisa on 6m shares.
FORWARD COUNTER: Pakistan Petroleum came for active profit-selling at the inflated level and fell by Rs2 at Rs110.60 on 47m shares, followed by D.G.Khan Cement, easy 10 paisa at Rs55.90 on 10m shares, OGDC, off 75 paisa at Rs61.80 on 8m shares, PTCL, lower 10 paisa at Rs39.15 on 4m shares and National Bank, up by 40 paisa at Rs68.55 on 3m shares. PSO fell by Rs2.80, while others showed fractional decline.
DEFAULTER COS: Barring Quice Foods and Crescent-Standard Bank, which suffered fall ranging from 15 to 40 paisa at Rs3.60 and 10.50 on 0.111m and 0.116m shares respectively, all others were traded modestly.
DIVIDEND: Habib Bank Modaraba, cash 16 per cent, Bolan Bank, right shares at the rate of 50 per cent, Shabbir Tiles, cash 15 per cent plus bonus shares of 10 per cent, Fidelity Leasing Modaraba, cash 10 per cent and Latif Jute, nil.
