KARACHI, June 6: Fiscal worries dominated the trading on the stock market during the pre-budget session on Monday as investors played on both sides of the fence amid conflicting rumours about fiscal relief in the federal budget.
Energy, fertilizer and auto shares remained under pressure on market talk of fresh taxes, while textile, cement and some other sector showed good pre-budget gains on active short-covering.
The KSE 100-share index recovered from early lows and finished with a decline of 108.77 points at 7,104.40, after having hit at one stage the day’s lowest at 6,916.67 on early panic-selling in PTCL triggered by postponement of its bidding date owing to strike by its employees.
“The standoff on PTCL sell-off has already taken steam out of the market and the talk of increase in Capital Value Tax (CVT) from the existing 0.01 per cent to 0.1 per cent on broker commission proved a last straw on the camel’s back”, analysts said.
Most of analysts feel that the PTCL issue may have wider negative fallout on the government’s future privatization programme as it may not be in a position to get a competitive price for its corporate entities. The strike has added new dimensions to the whole issue as far as foreign bidders are concerned.
In the absence of positive budgetary leaks on specific issues relating to share business, no one was inclined to take long positions on any of the counters and just followed the rumours coming in quick succession.
“I don’t think any fiscal incentive could pull the market out of the current impasse”, predicts a leading broker “there may be fee for all if the share business was further taxed”.
However, the KSE high-ups did not announce to hold a special session during the budget announcement at 5.30 p.m. to ascertain immediate market reaction to the fiscal measures and closed the official trading around 2.15 p.m. The practice of holding special session was done away with to end undue speculation and price fall and rise, the KSE sources said.
The opening was terribly bearish as the KSE 100-share index shed about 300 points followed by reports of postponement of June 10 bidding of PTCL to end the standoff on the issue and strike by its employees.
Plus signs trailed far behind the minus ones, major losers being Suzuki Motors, International Industries, Parke-Davis, National Foods, Shezan International, PPL, Pakistan Oilfields, Pakistan Refinery, and Artistic Denim, off Rs5 to Rs8.75.
But the largest fall of Rs10.30, Rs13.65 and Rs18 was noted in National Refinery, PSO and AKD Securities.
Mari Gas, Gatron Industries, Goodluck Industries and Javed Omer were among the leading gainers, up by Rs6.20 to Rs11.15 followed by Gadoon Textiles, Nishat Chunian, Nishat Mills, Blessed Textiles, Al-Ghzai Tractors, BOC Pakistan, Shell Pakistan, Hinopak and Millat Tractors, up by Rs2.95 to Rs4.
Plus signs again dominated the list under the lead of energy shares and PTCL and some other blue chips including National Bank. Losers held a strong lead over the gainers at 186 to 92, with 30 shares holding on to the last levels. Trading volume fell to 230m shares from the previous 318m shares.
OGDC topped the list of most actives, easy 30 paisa at Rs100.95 after hitting the day’s lowest and the highest at Rs96.20 and Rs102.90, on 74m shares followed by PTCL, off Rs3.25 at Rs64.10 on 55m shares, National Bank, easy 25 paisa at Rs96.25 on 21m shares, Pakistan Petroleum, off Rs5.30 at Rs190.80 on 14m shares, D.G.Khan Cement, lower by 15 paisa at Rs55.70 on 8m shares, PSO, off Rs13.65 at Rs356 on 6m shares and Pakistan Oilfields, lower Rs7.75 at Rs257.25 also on 6m shares.
Other actives were led by Nishat Mills, up Rs3.65 at Rs76.90 on 4m shares, Pak PTA, easy five paisa also on 4m shares and MCB, up by 85 paisa on 3m shares.
FORWARD COUNTER: Pakistan Petroleum came in for active selling and fell by Rs4.75 at Rs192.50 on 12m shares, followed by PSO, off Rs6.80 on 11m shares, OGDC, lower by 55 paisa at Rs99.95 on 9m shares, PTCL, off Rs3.20 at Rs64.65 on 6m shares and Pakistan Oilfields, easy by Rs7.40 at Rs259.90 on 2m shares. Others also fell but fractionally amid light business.
DEFAULTER COS: Mixed trading was witnessed amid alternate bouts of buying and selling amid slow turnover and fractional price changes.