KARACHI, March 8: The KSE 100-share index on Wednesday again suffered a major drop from the overnight higher levels, off 491.00 points or 4.43 per cent on panic-selling by leading investors. The factor that triggered across the board selling this time were the reports that the Central Board of Revenue will collect investment data in shares from the local bourses to expand tax net.
At one point, just a step away from the 500 points dip, the index closed at a huge fall of 491 points, which was the largest ever single-session drop-beating Monday’s battering of 468.20 points.
During the last two sessions the index has lost as many as 821.22 points or 7.27 per cent, wiping out a whopping Rs232 billion ($4 billion) from the market capitalization. The only saving grace looked to be the terribly low volume, which could be an indication that bulls may be back even on Thursday to put the market back on the rails.
The market closed at around 10,594.01 points, off 491.02 points as compared to 11,085.03 a day earlier. Almost all leading shares fell across the board to their ‘lower circuit’ positions. Wednesday’s selling saw Rs135 billion wiped out of the market capitalization which stood at the end at Rs3,019.947bn.
Leading oil and bank shares notably OGDC, Pakistan Oilfields, Pakistan Petroleum, PSO, National Bank, MCB Bank and some others, which hold about 60 per cent weightage in the index, received massive battering as they provided the sellers attractive capital gains.
“The sell-off was psychological rather than real tailored to make an easy scapegoat to meet the demand of the bears”, a leading stock analyst Hasnain Asghar Ali commenting on the market crash said “most of the leading brokers and investors are already in the tax net and need not to worry”.
The selling seems to have come from outside the bourse ambit, some others said, adding “there may be a lot of untaxed money in the share business, which may have beat a hasty retreat leaving in its wake a long list of casualties”.
Another leading stock analyst Faisal Abbas said it was not that difficult to push the index sharply lower just in one-go owing to terribly weak base, “pull the investment from some leading half a dozen base shares and watch the panic-selling”.
He said some of the genuine investors were worried over the developing post-Bush visit political scenario and could not precisely decide how to behave in future stock trading.
But amid all the gloom and doom, some feeble voices were heard, which justified the downturn: “Everything that goes up must come down”, said a market man. Most of the market players thought that the investor confidence had been terribly shaken, but some were still willing to bet that the fall was a ‘massive correction’, rather than the ‘burst of the bubble’.
Minus signs again dominated the list as prices fell like ninepins on all the counters, under the lead of Thal, Engro Chemical, IGI Insurance, Arif Habib Securities, National Refinery, Pakistan Refinery, Attock Petroleum, PSO, Shell Pakistan, Pakistan Oilfields, Millat Tractors, Suzuki Motors, Nestle Pakistan, Rafhan Maize and Packages, which suffered fall ranging from Rs10.50 to Rs34.
Some of the shares managed to put on modest gains under the lead of Attock Cement, Gillette Pakistan, Artistic Denim and Jahangir Siddiqui & Co, up by Rs4.10 to Rs8.
Trading volume fell to a low total in the recent past at 260m shares as compared to 355m shares a day earlier as losers maintained a heavy lead over the gainers at 342 to only 31, with 18 shares holding on to the last levels.
MCB Bank topped the list of actives, off Rs5.75 at Rs246 on 28m shares, followed by PTCL, lower Rs3.10 at Rs61.20 on 26m shares, D.G. Khan Cement, Rs7.70 at Rs146.60 also on 26m shares, National Bank, off Rs15.25 at Rs290.15 on 19m shares, OGDC, easy Rs6.95 at Rs132.85 on 15m shares and Lucky Cement, off Rs5.70 on 21m shares.
Other actives were led by Fauji Fertilizer Bin Qasim, off Rs2.10 on 11m shares, Pak PTA, easy 55 paisa on 10m shares, Sui Southern Gas, lower Rs1.10 on 8m shares and KESC, off Re1 on 7m shares.
FORWARD COUNTER: MCB Bank also came in for active selling on the cleared list and fell by Rs5.61 at Rs246.61 on 14m shares followed by National Bank, lower Rs15.50 at Rs294.50 on 10m shares and D.G. Khan Cement, off Rs7.80 at Rs148.55 on 7m shares.
PTCL followed them, off Rs3.25 at Rs61.75 on 7m shares and Lucky Cement, lower Rs5.80 at Rs110.60 also on 6m shares. Others also fell in unison on selling.
DEFAULTER COS: Dandot Cement and Quice Foods came in for active selling at the higher levels and fell by 45 to 55 paisa at Rs10.80 and Rs7.95 on 0.300m and 0.331m shares respectively. Others showed fractional changes in the absence of demand.
DIVIDEND: Pakistan Tobacco, cash at the rate of 25 per cent for the year ended Dec 31, 2005, Crescent Commercial Bank and Saudi Pak Commercial Bank, both nil for the same period.