14 January 2005	Friday	03 Zilhaj 1425

KARACHI, Jan 13: The KSE 100-share index on Thursday suffered one of the largest fall of 232.60 points or 3.5 per cent in its trading history in a session on massive selling in the leading market leaders including PTCL , OGDC and PSO. Market capital also eroded by Rs63bn at Rs1,778.400bn.

Stocks suffer 233-point fall on heavy selling

KARACHI, Jan 13: KSE 100-share index on Thursday received a massive battering as a long overdue technical correction manifested itself in a bigger way than many expected aided by heavy selling in the market leaders and eroding 232.40 points from it and Rs63bn from the market capital.

Incidentally, it was the largest single-session fall, the previous record being 206.50 points on Sept 16, 2003 on badla-related selling. But it came in a different context as the market has over stretched itself beyond its financial mandate.

The decline was widespread and covered the entire list. An idea of panic- selling may well be had from the fact that out of the total 419 actives, only 45 shares managed to finish modestly higher, while 336 fell, some of them heavily.

Overvalued shares, notably PTCL, OGDC, and some others took a massive plunge on heavy selling triggered by negative reports from the carryover market and tight money market.

The KSE 100-share index finally finished at 6,424.80 and the market capital at Rs1,778.400bn as all the heavily capitalized shares suffered massive pruning on persistent selling.

Partial shutdown of gas facilities, both at the Sui fields and Pakistan Petroleum's purification plant, followed by Monday's terrorist attack triggered panic-selling as investors took it bad sign for the law and order situation. But some leading analysts said a technical correction was a long overdue as the market had risen beyond its mandate and that came in the form of selling, making the attack on gas facilities an excuse.

"There is no reason to mourn the market collapse," brokers said "what is the harm if it sheds by 300 to 400 points after having risen by more than 1,000 points during the last couple of weeks."

"Money market is terribly tight adding to fresh increase in the carryover rates, which are being quoted around 18 per cent," says a leading stock analyst "there could be more selling if some of the investors failed to take delivery at the higher rates".

In market parlance, an extended bull-run always needs a correction, which in turn adds to the general health of the market in financial terms and paves the way for a fresh price flare-up, they said.

"In a market still needing a technical depth, a couple of heavy weights could take it any highs and push it down to new lows without any negative background news," says a leading analyst.

"Pick up PTCL, OGDC and PSO one can add any amount of numbers to the index as they have a combined weightage of about 45 per cent in the KSE 100-share index," he adds "pull them down it will collapse with the same speed as it did rise".

That is perhaps what happened on the bourse during the last couple of sessions as the market was in the tight grip of a couple of punters and speculators. Prominent losers were led by Artistic Denim, PSO, Shell Pakistan, Pakistan Oilfields, Pakistan Cables, Treet Corporation, Clariant Pakistan, which suffered fall ranging from Rs10 to Rs26.65, largest decline being in Shell Pakistan.

Some of the leading shares managed to finish higher under the lead of Wyeth Pakistan and AKD Securities owing to shortage of floating stock, up by Rs24 and Rs35.15 followed by Fazal Cloth and some others, up by Rs3.15 to Rs12.20.

Trading volume fell to 571m shares from the previous 954m shares as losers maintained a strong lead over the gainers at 336 to 45, with 38 shares holding on to the last levels.

PTCL led the list of actives, sharply lower by Rs2.65 at Rs50.40 on 109m shares followed by OGDC, off Rs3.85 at Rs73.80 on 65m shares, National Bank, lower Rs1.10 at Rs93.60 on 49m shares, Fauji Fertilizer Bin Qasim, off Rs1.55 at Rs30.25 on 42m shares and Hub-Power, easy by Rs1.70 at Rs33.10 on 39m shares.

Other actives were led by PICIC Growth Fund, off Rs2.85 on 31m shares, PSO, lower Rs13.90 on 27m shares, KESC, up Rs1.20 on reports of bidding date on Feb 4, Lucky Cement, lower by Rs2.10 on 19m shares and Pakistan Oilfields, off Rs12.60 on 18m shares.

FORWARD COUNTER: PTCL also came in for strong selling on this counter and fell by Rs2.55 at Rs50.50 on 26m shares, PPL, off Rs6.65 at Rs133.35 on 19m shares, PSO, lower Rs11.10 at Rs313.80 on 12m shares, OGDC, easy Rs3.90 at Rs74.20 also on 12m shares and Fauji Fertilizer Bin Qasim, lower 55 paisa at Rs30.45 on 10m shares.

DEFAULTER COS: Mukhtar Textiles led the list of actives, off 80 paisa at Rs10.15 on 0.172m shares followed by Crescent-Standard Bank, lower by one rupee at Rs14.55 on 0.151m shares and Crescent Spinning, easy by 20 paisa at Rs3.80 on 0.106m shares.