|
|
|
| May 29, 2006 | Monday | Jumadi-ul-Awwal 1, 1427 |
Rs54bn wiped out from bourses
THE stocks fell across the board last week under the lead of blue chips as panic selling from the forward counter spilled over to the ready section. This was followed by a massive plunge in the Karachi Stock Exchange’s 100-share index.
Not many could think that some leading investors were trapped in the clearing business during the rollover week. But as it did, there was confusion all around triggering panic-selling from the big ones. Most of the leading shares and blue chips faced lower locks followed by sharp declines. The market leaders, including the oil, bank and cement shares were the forefront losers.
Earlier, pre-budget worries dominated the trading as investors played on both sides of the fence without taking long positions on any counters. However, rollover selling seemed to have taken the steam out of the mid-week rally.
The KSE 100-share index plunged by 358.48 point or 3.25 per cent at the weekend session being the last day of the rollover week for matured May settlements followed by panic selling to square the positions.
Most leading shares and trendsetters finished sharply lower as the KSE had to apply lower circuit breakers to forestall further fall, notably in the OGDC, the Pakistan Petroleum, the MCB, the National Bank, the Pakistan Oilfields and the D.G. Khan Cement.
But the overall weekly fall was of 201 points owing to early run-up at 10,660.39 as compared to 10,861.31 a week back thus wiping out Rs54 billion from the market capital at Rs3,006.948 billion.
Conflicting rumours of new taxes and relief followed in quick succession as speculators were out to unnerve small and genuine investors netting them as sellers.
Click to view the larger image
Trading volumes fell to 10-month low as leading investors, including the financial institutions stayed on sidelines and did not resort to pre-budget short-covering leading to the weakness of oil giants which took the entire market along with them in the minus column.
The stocks, therefore, failed to extend the weekend recovery as leading bank and oil shares came in for active bouts of buying and selling at lower levels. But the buying support lacked aggressiveness associated with an oversold market.
Leading bank shares, notably the National Bank, the MCB and the Bank of Punjab attracted active support at lower levels and recovered from previous lows and so did cement shares under the lead of the D.G. Khan and the Lucky cement.
Although, most of the tax-related investor-concerns were allayed by the Islamabad’s discounting the rumours making rounds last week. However, leading operators were still in two minds about the future outlook of the share business, analysts said.
Opinions were divided over the pre-budget share business outlook. Some analysts said that both leading financial institutions and investors will play safe and may not take long positions on any counters even at attractively lower levels.
Any pre-budget positive leak could trigger buy-stops all-round at current levels some other claimed adding that the pre-budget pause always led to a robust rally irrespective of the negative background news.
There was a loud whispering in the market that the hesitancy of leading oil shares, notably the OGDC, the Pakistan Petroleum and the Pakistan Oilfields was keeping the market in a low profile amid volatile performance which most brokers believed.
The locals were awaiting the advent of foreign buying on oil counter anytime irrespective of fears about the budgetary taxation proposals, predicted a broker adding that this could be the beginning of the market’s renewed onslaught to its pre-reaction level.
FORWARD COUNTER: The speculative issues on the forward counter followed the lead of their counterparts in ready section and fell in unison under the lead of oil giants and bank shares. Cement shares also followed them but the on-balance losses in them were modest.
The Pakistan Oilfields, the Pakistan Petroleum, the National Bank, the MCB, the D.G. Khan Cement, the PSO and some others were leading among losers on active selling in the absence of strong support at the dips.—Muhammad Aslam
|
|
|
|
