KARACHI, Sept 19: The volume of shares traded on the Karachi Stock Exchange is receding by the day. The decline is so profound that stock brokers have learnt to swallow the bitter pill with good cheer. The chilling joke doing the rounds is to see whether the volume of shares traded gets to be zero first or the country’s foreign exchange reserves!

On Friday, the quantum of shares, which came up for trading, stood at a paltry 4.3 million, the lowest level in 11 years. The previous low record was 2.3 million shares that changed hands on Nov 7, 1997.

Analysts said that the investors were keeping away from the market due to weakening economic indicators: widening external deficits; the slipping value of rupee and dwindling forex reserves. Add to that the fears about the happenings on the western borders.

Mohammad Sohail at JS Global says that investors who are still holding on to the stocks moan that their actual loss is more than is represented by the benchmark KSE index, which has plunged by 41 per cent (52pc in US dollar terms) from its April 18 peak of 15,676 points.

Data compiled by Sohail shows that among the 42 scrips in JS universe, major losers have been banks and cement stocks. The performance was adjusted for cash and stock dividend.

Among the top five losers, there were two banks and two cement companies. The brokerage covers 11 banks where the (simple average) price erosion is 58pc while in six cement companies, the price decline was 57pc on average from 2008 peak.

The stock pundit mentions that faster than expected slowdown in the economy had its impact on the banking sector because of higher provisioning and slower advances growth.

E&P sector was stated to be benefiting from rupee devaluation and relatively higher oil prices. IPPs operated on a pre- determined tariff formula that generated stable cash flows.

“In case of a further market fall, after the lifting of price freeze, these two sectors along with fertiliser stocks will continue to outperform the market, thanks to double digit dividend yield offered by these companies,” Sohail says.

Some of the stocks showing the sharpest fall in the current bear rampage included: Pak-Suzuki Motors which at peak on Jan 8 was priced at Rs334.60, but is now down by 73pc; Bank of Punjab on Feb 27 at Rs106 has plunged by 71pc; Standard Chartered Bank at its highest Rs48.80 on Jan 3, is now down 67pc. Almost an equal fall is recorded in D G Khan Cement from its high point of Rs118.85 on April 17. Other scrips stripped off their value by 60 per cent or more include: Maple Leaf; Nishat Mills; NIB Bank; Askari Bank; Lucky Cement: Engro Polymer; Faysal Bank and NBP.

Another analyst said by the look of it, foreign investors were not running away anywhere. Between Sept 15 and 18, overseas investors’ portfolio investment showed a net inflow of $4.2 million. But many brokers disagree saying that foreign investors were ‘displeased’ (to say the least) with the exit firmly blocked because of ‘floor’ capped at the index level of 9,144.

“The ‘goras’ often converse in words and tone, which leave bitter taste in the mouth!,” grumbled one stock broker.