May 16, 2006	Tuesday	Rabi-us-Sani 17, 1427

KARACHI, May 15: The KSE 100-share index on Monday plunged by 3.60 per cent or 415 points on panic selling triggered by a combination of negative news about future economic perceptions and worries about tax proposals in the next budget.

The heating up of political scenario after the signing of the ‘Charter of Democracy’ between the two major political parities in London on Sunday is, analysts said, a significant development but the contenders of power could interpret it according to their own perceptions sans investors.

The massive fall of 414.68 points at 11,096.86, which eroded Rs113 billion from the market capital at Rs3,126 billion, reflects that the worst is still to come in an overbought market, analysts said.

Just from the opening bell, the market witnessed a beeline of sellers but no matching buying offers at the falling prices and the crash intensified with each passing minute amid panic that followed.

“All roads may not be leading to the Khalian road, Wall Street of the KSE, as the panicked sellers tried to get out of the market leaving behind a long list of casualties, notably of small investors and savers,” says a leading broker commenting on the market crash.

It was, however, not the largest single session fall, the highest so far being 491.02 points or 4.43 per cent recorded on March 8, 2005 on rumours of tax on shares and 468.20 or 4.10 per cent on March 6, 2006 owing to a negative fallout of President Bush’s visit followed by panic selling.

Although the budget is three weeks away, rumours about the increase in withholding and value-added tax in the new budget worried leading punters and small investors who liquidated their positions, fearing a further fall in prices.

There was confusion all around after the opening, as everyone was a seller but no one was inclined to buy at the falling prices. All the leading bank, oil and cement shares fell from their recent high like house of cards, closing with lower locks.

“Future economic perceptions may not be that bleak amid a growth rate of above six per cent but some of the leading bears made it look so,” analysts said, adding that the absence of buying at dips, however, further aggravated the situation.

“No one could deny the fact that the market was still in an overbought position and needed a correction, and a section of brokers exploited the situation amid reports that it is the end of interim dividend news for the first quarter.”

But what seemed to have triggered panic selling by some of the leading institutional traders were reports that rates on deposits were expected to be increased to bring down the bank spread to a normal level, analysts said.

Some of the leading shares whose floating stock is not easily available, led by Pakistan Hotels and Nestle Pakistan, rose by Rs7.70 and Rs46, respectively, followed Haroon Oils, Pakistan Resource Company, Bolan Castings, Pakistan Engineering and Pakistan Electron, up Rs4 to Rs4.10.

Unilever Pakistan and Arif Habib Securities fell by Rs25 and Rs30.05, respectively. Other leading losers included MCB, Bhanero Textiles, MCB, Millat Tractors, PSO, Attock Petroleum, Pakistan Petroleum, Colgate Pakistan, Pakistan Oilfields and Shell Pakistan, which posted falls ranging from Rs10 to Rs22.

A steep decline in the turnover figure at 199m shares from the previous 211 million shares reflects the absence of leading buyers. Minus signs topped losers by 306 to only 55, with 23 shares holding on to the last levels.

OGDC topped the list of actives, off Rs4.60 at Rs152.60 on 36m shares, followed by National Bank, sharply lower by Rs13.45 at Rs258.50 on 19m shares, Pakistan Petroleum, easy by Rs13.50 at Rs257.45 on 11m shares, MCB, off Rs10.35 on 11m shares, DG Khan Cement, lower Rs5.95 at Rs113.55 on 10m shares, PTCL, off Rs2.85 at Rs54.55 on 9m shares, and Pakistan Oilfields, lower Rs21.60 at Rs420.30 on 7m shares.

Other actives were led by Fauji Fertiliser Bin Qasim, off Rs1.80 on 8m shares, followed by Sui Southern Gas, down Rs1.90 also on 8m shares, and Fauji Cement, easy by Rs1.15 on 7m shares.

FORWARD COUNTER: OGDC followed the lead of its counterpart in the ready section and fell by Rs4.70 at Rs153.30 on 18m shares, followed by National Bank, lower by Rs13.65 at Rs259.70 on 13m shares, and Pakistan Oilfields, sharply lower by Rs22.15 at Rs421.35 on 10m shares.

They were followed by Pakistan Petroleum, off Rs13.60 at Rs258.40 on 10m shares, and DG Khan Cement, lower by Rs6 at Rs114.05 on 8m shares. Others also fell amid light trading.

DEFAULTER COS: Activity on this counter was dull in the absence of buying support owing to the market crash in the ready section. Crescent Standard Bank came in for active selling and fell by 50 paisa at Rs5.05 on 0.259m shares, while others showed fractional price changes.