May 19, 2006	Friday	Rabi-us-Sani 20, 1427

KARACHI, May 18: The KSE 100-share index on Thursday again crashed from the overnight highs, off 3.66 per cent or 406 points, followed by renewed panic selling on rumours that the Central Board of Revenue (CBR) has sought government approval to broaden the tax base, including an increase in Capital Value Tax.

Prices of market leaders and most of the blue chips fell like house of cards but there was no matching buying even from the financial institutions, which are supposed to act in abnormal market conditions to protect the interest of small and genuine investors, leading brokers said.

“The market is in the tight grip of speculators for the last couple of sessions and some of them are ruthlessly exploiting the investor tax worries in the new federal budget,” says a leading analyst commenting on the market’s snap decline and rise and added that a terribly viable share market ensuring dividend yields over 12 per cent and an investor envy had been made bears paradise.

The index not only wiped out the overnight gain but added to more points at 10,687.88, eroding Rs108 billion from the market capital at Rs3,163.315 billion.

“It is not that difficult to push the index sharply lower to spread scare among the small investors,” analysts said, adding “sell OGDC, Pakistan Petroleum, National Bank and PTCL, which together hold about 50 per cent weightage in it, witnessed the confusion.” All of them including some other big ones finished at their lower locks.

Although the CBR has clarified after Monday and Tuesday’s market crash that there was no plan to impose tax on capital gains but speculators indulged in loud whispering telling investors “this is in the fresh taxation proposals”.

Leading brokers said investors should be held on to their positions and should not be carried away by the rumours, which are following in quick succession to destabilise the market.

Light volumes, however, reflect that genuine buyers are keeping to the sidelines watching the bull-bear fight from the outside, although most of them are panicky owing to massive fall.

Losers again dominated the list under the lead of Shell Pakistan and Pakistan Oilfields, off Rs19.25 and 20.95, respectively, followed by Thal Jute, MCB, National Bank, Arif Habib Securities, Pakistan Petroleum, National Refinery, Grays of Cambridge, Unilever Pakistan and some others, off Rs10 to Rs15.

Siemens Pakistan and Wyeth Pakistan posted gains ranging from Rs25 to Rs76 owing to shortage of floating stock. EFU Life, Haroon Oils, Lakson Tobacco, Dawood Hercules and Colgate Pakistan followed them, up by Rs4 to Rs12.50.

Trading volume was maintained at the last level of 236m shares but losers forced a strong lead over the gainers at 255 to 79, with 19 shares holding on to the last levels.

National Bank came in for active selling, sharply lower by Rs12.85 at Rs245 on 30m shares followed by OGDC, off Rs7.55 at Rs143.65 on 22m shares, D.G.Khan Cement, easy by Rs5.30 at Rs107.95 on 26m shares, Pakistan Petroleum, off Rs11.90 at Rs243 on 19m shares, MCB, lower Rs11.65 at Rs227.60 on 19m shares, Pakistan Oilfields, easy by Rs10.95 at Rs398.30 on 9m shares and PTCL, off Rs2.30 at Rs50.50 on 8m shares.

Other actives were led by Lucky Cement, off Rs5.65 on 17m shares, Fauji Cement, easy Rs1.05 on 8m shares and Bank of Punjab, off Rs3 on 7m shares.

FORWARD COUNTER: National Bank also came in for active selling on the cleared list, off Rs12.90 at Rs245.56 on 23m shares followed by OGDC, lower Rs7.55 at Rs144.05 on 22m shares, D.G.Khan Cement, easy Rs5.70 at Rs108.30 on 19m shares.

Pakistan Petroleum followed them, off Rs12.70 at Rs243.10 on 14m shares and MCB, lower Rs12 at Rs228.60 on 14m shares. Others also fell under the lead of bank, oil and cement shares.

DEFAULTER COS: Kashmir Polytex came in for active short-covering at the lower level and rose by 60 paisa at Rs4 on 0.663m shares followed by Crescent Standard Bank, lower 15 paisa at Rs3.85 on 0.469m shares. Others showed fractional fall amid light trading.