KARACHI, Sept 21: Stocks on Tuesday received massive battering on active inflow of fresh float from the carryover market but no matching buying support from any of the active participants leading to widespread decline in the share values.
The KSE 100-share index, which was holding on confidently well above the barrier of 5,000 points plunged below this crucial barrier on active selling amid rumours of extension in the current selling wave.
It finally finished around 4,958.41 as compared to overnight close of 5,044.77, off 86.36 points or two per cent as all the leading base shares fell like ninepins amid active selling from all and sundry.
The market capital also suffered sharp setback of Rs24.171bn at Rs1411.480 as compared to Rs1435.651 a day earlier as leading shares, notably PPL, Hub-Power and some other fell.
Dividend announcements, notably from the Millat Tractors on the higher side but failed to boost the market morale. It announced a final cash dividend of 50 per cent (80pc interim already paid) amid bonus shares of 50 per cent. Its share value surged by Rs22.50 at Rs322.50 on 54,500 shares.
Jahangir Siddiqui Bank presented a pleasant surprise to everyone after it declared an interim bonus shares at the rate of 175 per cent, which lifted its share value higher by Rs11.30.
Although investment on the carryover market are falling progressively for the second week in a row at Rs23 billion from the recent peak level of Rs28 billion, investors seem to have made it an excuse to get off the market after liquidating in part their long positions in most of the pivotals, brokers said.
The market is in a terribly bad shape as it has lost 850 points or about 9 per cent since the CVT-related sell-off assumed the role of a major depressant, brokers said.
"It appears to be a straight fight between the bulls and the prime minister over the issue of Capital Value Tax (CVT)," says a leading broker jokingly commenting on the "polite no of the chief executive" in a meeting of the bourses chief with the prime minister in Karachi last week.
An objective analysis of the levy indicates that falling daily volumes to 200m share from the average 40m shares could hardly raise the amount of Rs1.5 billion calculated at the time of imposition of the CVT and who will be the ultimate loser is easy to fathom, he says.
"A perfectly robust market seems to have been put into the reverse gear just in one fiscal step and where the end will come is not clear," some other said. "There is loud whispering in the KSE corridors about the index level of 4,500 if there is no positive development on the CVT issue in the next official meeting."
The interesting feature is that good dividend announcements are pouring in each session but most of them are being neglected amid falling demand from any Qurter, including the financial institutions.
The board meeting of the OGDC is due tomorrow and analysts predict its annual profit could touch the high mark of Rs24 billion accompanied by a higher final dividend. It has already paid an interim dividend of 27.5 percent and may increase the final and that could give some relief to the market in distress.
Minus signs dominated the list under the lead of Javed Omer, International Industries, Treet Corporation, Unilever Pakistan, Colgate Pakistan Shell Pakistan and Nestle Milk Pak, which suffered fall ranging from Rs7.05 to Rs40. There were several other big losers, notably Arif Habib Securities, EFU Life, Glaxo-SKF, and Pakistan Engineering, off Rs5 to Rs8.25.
Apart from Millat Tractors, other good gainers included Bolan Casting, HinoPak Motors, Ferozsons Lab, Berger Paints Jahangir Siddiqui Bank and Pakistan Cables, which posted gains ranging from Rs4.50 to Rs15.
Trading volume fell to 117m shares from the 122m shares as losers forced a strong lead over the gainers at 260 to 66, with 20 shares holding on to the last levels.
DG Khan Cement led the list of actives, lower 95 paisa at Rs54 followed by post-dividend selling on 15m shares followed by Hub-Power sharply lower by Rs1.10 at Rs30.15 on 14m shares, Pakistan Petroleum, off Rs2.15 at Rs111.90 on 11m shares, OGDC, easy 75 paisa at Rs59.15 on 9m shares and Bank of Punjab off Rs1.10 at Rs64.10 on 7m shares.
Other actives were led by National Bank, off Rs1.70 on 6m shares, PTCL, lower 60 paisa on 5m shares, Sui Northern Gas, off Rs1.35 on 3m shares, Fauji Fertilizer Bin Qasim, easy 60 paisa also on 3m shares and Fauji Cement, lower 10 paisa on 3m shares.
FORWARD COUNTER: Speculative issues also followed the lead of their counterparts in the ready section and fell in both the September and October Settlements, major losers among them being Hub-Power, PSO, ICI Pakistan, National Bank, DG Khan Cement and some other, falling by Rs1.10 to Rs1.75, largest decline of Rs2.81 being in Pakistan Oilfields.
DEFAULTER COS: With the exception of Taxila Engineering, which came in for stray support and rose by 25 paisa at Rs9.25 on 0.192m shares, all others were fractionally traded mostly on the lower side.
DIVIDEND: Jahangir Siddiqui & Co, cash 15 per cent, Rupali Polyester, cash 40 per cent, Feroz sons Lab, cash 40 per cent, bonus shares of the same amount, Dadex Eternit, cash 30 per cent, Orix Investment Bank, cash 10 per cent, bonus of an identical amount, Treet Corporation, cash 100 per cent, Balochistan Wheels, cash 15 per cent, Fateh Industries and Fateh Sports, both nil.
