KARACHI, Sept 26: Stocks on Friday failed to sustain the overnight run-up as weekend profit-selling from all and sundry again pushed it into the minus columns in the absence of strong demand from the institutional traders.
The snap plunge of 108 points in the backdrop of sustained overnight run-up worried analysts as they were expecting a stray weekend selling not the virtual sell-off.
The KSE 100-share index fell by 107.98 points at 4,163.23 as compared to 4,271.21 a day earlier as all the leading base shares including PTCL and Hub-Power came in for strong selling at the overnight inflated levels. Earlier,it rose further from the overnight level by 65 points but failed to hold on to early gains.
The market capital also suffered a decline of Rs.22.180bn at Rs919.348 billion as against the previous Rs.941.528bn, reflecting the weakness of PTCL, PSO and Hub-Power.
The opening was,however, on the higher side as a section of investors covered positions on the selected counters at the lower levels but the afternoon session saw the return of the bear market and consequent steep decline.
The overnight snap rally caused by official statement that the final date of PSO sell-off will be announced within 10 days failed to get through as bargain-hunters were not inclined to hold long positions owing to financial risks involved during the intervening two closures and got out of the market.
Above market dividends are pouring in daily, ensuring more than 12 per cent return on investment to the investors but they appear to be more concerned with the developing political situation rather than the market’s positive fundamentals.
“Being still in a highly overbought position, the market needs a fresh correction before resuming its dividend-driven upward drive,” brokers said.
Analysts said the snap sell-off was essentially caused by the weekend profit-taking by both the leading financial institutions and the retailers at the overnight inflated as no one is inclined to hold long positions until sanity returns to the political arena.
“There is no major change likely in the political scenario as both the opposition and the government are not inclined to ease their stand on the LFO and that could lead to agitation by the opposition,” they said.
Energy shares, auto and most of the overvalued shares on the other counters including chemicals and cement led the market decline as there was no matching covering purchases at the falling prices. Pakistan Refinery, Shell Pakistan, Pakistan Oilfields and PSO were leading, off Rs9.50 to Rs14.15.
Other leading losers were led by Nestle MilkPak, Clover Pakistan, Pak-Suzuki Motors, Al-Ghazi Tractors, Gatron Industries, Fateh Textiles and Javed Omer, off Rs5.55 to Rs34.45.
Unlike the previous sell-offs when the downdrift was total, some of the leading shares managed to put on good gains under the lead of IGI Insurance, Cherat Papersack, Reckitt and Benckiser, Dawood Hercules, Ghani Glass, Atlas Honda Ferozsons Lab and Treet Corporation, up Rs4 to Rs10.25.
Trading volume fell to 339m shares as losers held a strong lead over the gainers at 200 to 122, with 28 shares holding on to the last levels.
PTCL again topped the list of most actives, off one rupee at Rs38.55 on 60m shares followed by Hub-Power, lower Rs1.35 at Rs37.55 on 32m shares, D.G. Khan Cement, easy 75 paisa at Rs37.80 on 26m shares, Bosicor Pakistan, lower by Rs1.60 at Rs31 on 24m shares and FFC-Jordan Fertilizer, off 95 paisa at Rs17.75 on 21m shares.
Other actives were led by PIAC, off 85 paisa on 17m shares followed by Fauji Cement, easy 45 paisa on 16m shares, Pakistan Oilfields, off Rs13.90 on 15m shares and Engro Chemical, lower by Rs2.15 on 8m shares.
FORWARD COUNTER: Both Hub-Power and PTCL also came in for active selling and fell by Rs1.30 and Rs1.65 at Rs37.70 and Rs37.80 on 5m shares each followed by PSO, sharply lower by Rs14.824m at Rs281.68 on 4m shares, Pak PTA, easy 75 paisa at Rs10.75 on 2m shares and FFC-Jordan Fertilizer, lower 75 paisa at Rs17.80 also on 2m shares.
DEFAULTER COMPANIES: Easy trend was also seen on this counter as investors took profits. Standard Bank led the decline, off 80 paisa at Rs6.10 on 0.261m shares followed by Biafo Industries, easy 40 paisa at Rs6.65 on 0.110m shares. Others were modestly traded on the lower side.
DIVIDEND: Liberty Mills, cash 10 per cent, bonus shares 15 per cent, Grays of Cambridge, cash 10 per cent, Buxly Paints, 12.5 per cent, Pioneer Cables, Noor Silk, Maqbool Company, Central Forest Products, Hashimi Can, Dadabhoy Sack, Pak Germ Prefabs and Asian Stocks Fund, all nil for the year ended June 30, 2003.