KARACHI, April 6: Stocks on Wednesday remained under pressure as leading investors and financial institutions indulged in fresh profit-selling at the inflated levels on all counters under the lead of energy sector. Tax-related rumours, despite denial by the KSE chairman, again halted the market’s technical rebound as leading investors unloaded long positions without seeking official clarification whether or not a 10 per cent tax has been imposed on brokers commission income in addition to value-added and wealth taxes.
There was, however, no official word on the rumoured levy, but analysts said it appeared to be an “inspired move” to destabilize the rising market.
The market has been in virtual turmoil for the last three weeks after the Karachi Stock Exchange 100-share index hit an all-time high of 10,303 points in March and then there was a scene of violent either-way movements apparently seeking its technically viable level.
However, it stands in a perfectly good shape after having risen by more by 70 per cent since January this year and shed about 25 per cent in the current consolidation phase.
The KSE 100-share index shed another 207.18 points at 7,613.63 as compared to the previous 7,820.81 points, the cumulative loss during the last two session being 437 points or six per cent, eroding Rs120 billion from the total market capital at Rs2,110 billion.
There was a total confusion after the trading resumed as speculators made it a point to outwit bulls and weaker links of the brokerage houses to unnerve them and the consequent panic selling, analysts said.
“The rumour did not originate from the highest tax authority (Central Board of Revenue), but speculative forces made it like that despite the fact that the KSE high-ups discounted it,” they said.
Some of the leading bears who had been badly mauled in the recent massive retreat of the market are out to push prices further down and then to cover their short positions to make up the losses.
Aided by higher dividend yields, touching the highest figure of 17 per cent in most of the cases, talk of a higher growth rate of about seven per cent and an attractive bait of sell-off of mega state-owned units, including Pakistan State Oil (PSO), Pakistan Telecommunication Company (PTCL), Pakistan Steel and half dozen others, would not allow investors to sit on the sidelines and are expected to restore the past glory to the KSE 100-share index during the next couple of weeks, it is a general consensus among the investing public.
Although energy shares have received massive battering during the last three weeks owing to settlement problems of outstanding dues in the forward March contract, they are now on their way to a sustained recovery thanks to strong covering purchases at the lower levels, brokers said.
OGDC, PPL, PSO, PTCL and
some other market leaders have already absorbed bulk of the unloading and are soon to become centre of activity again as only fools could miss the attractive bait of their lower levels.
Prominent losers were led by Wyeth Pakistan, off Rs58.50 followed by Arif Habib Securities, Javed Omer, Attock Refinery, PSO, National Refinery, PPL, and Unilever Pakistan, off Rs8.10 to Rs15.
Some of the leading shares, notably Pakistan Refinery and Attock Petroleum posted good gains of Rs10 to Rs10.95 followed by Jahangir Siddiqui & Co, Honda Atlas, Indus Motors, Atlas Battery, BOC Pakistan and Gillette Pakistan, which also rose by Rs2 to Rs4.85.
Trading volume shrank to 199m shares from the previous 345m shares as investors did not make bigger fresh commitments until the tax rumours are officially discounted. Losers held a strong lead over gainers at 237 to 64, with 35 shares holding on to the last levels.
Among the actively traded shares, PTCL was leading, off Rs1.95 at Rs66.25 on 39m shares followed by OGDC, sharply lower by Rs5.80 at Rs105.80 on 34m shares, Pakistan Oilfields, easy one rupee at Rs268 on 15m shares and PSO, off Rs14 at Rs417 on 13m shares.
Other actives were led by National Bank, lower Rs1,65 on 13m shares, DG Khan Cement, easy by Rs1.25 on 8m shares, Fauji Fertilizer Bin Qasim, lower 75 paisa on 7m shares, Sui Northern Gas, easy five paisa on 6m shares and MCB, off one rupee on 5m shares.
FORWARD COUNTER: OGDC again led the market fall on this counter and fell by Rs5.60 on renewed selling at Rs106.50 on 9m shares, PTCL, lower Rs2.65 at Rs67.20 on 13m shares, PSO, sharply lower by Rs17.10 at Rs420.00 on 8m shares, Pakistan Oilfields, unchanged at Rs273 on 5m shares and Kot Addu Power, lower 95 paisa at Rs54.50 on 4m shares. Others were modestly traded.
DERFAULTING COS: Trading on this counter again failed to pick up in the absence of active support from the investors. Price changes were fractional amid slow offtake.
DIVIDEND: Service Industries, cash 15 per cent; Universal Insurance, 17.5 per cent; and Fazan Modaraba, 2.4 per cent.
BOARD MEETINGS: Trust Leasing on April 9; Fateh Textiles 12; Dynea Pakistan 15; Faysal Bank, United Money Market Fund and Crescent Leasing on 18; Shell Gas on 20; and Dadex Enternit on 26.
