KARACHI, April 4: After opening higher, stocks on Wednesday took an unexpected dive on active selling in most of the pivotals toward the closing bell, pushing the KSE 100-share index down by 17.49 points amid relatively slow activity.
Floor brokers said snap selling in FFC-Jordan Fertilizer after the reports of massive after-tax loss suffered by it jolted a perfectly buoyant market as investors hastened to get out of it, leaving behind some major casualties on the blue chip counters.
The KSE 100-share index early was up by 19 points on active follow-up support and indications were that it may close the day slightly below the 1,900 level. But panic-selling in FFC-Jordan Fertilizer after the announcement of losses, triggered selling in most of the pivotals, pulling it down to finish down by 17.49 points at 1,852.90.
The FFC-Jordan Fertilizer, Pakistan’s only DAP fertilizer producer, has been in active speculative support during the last couple of sessions ahead of its annual accounts and has risen sharply higher on large business daily.
According to market sources commercial production was suspended some months back owing to some technical fault in the facilities but of late it has been functioning normally.
“The massive post-tax loss of Rs3.219 billion surprised everyone”, a stock analyst at the Moosani Securities says “what was more surprising for the small investors was the announcement by the KSE allegedly without prior notice about the board meeting”.
“It is the violation of the KSE rule of 31, which must be followed keeping in view the interest of small investors”, he observes.
But stock analysts at the Al-Mal Securities Services don’t think that the report of losses of FFC-Jordan Fertilizer could provide the needed push to the bears to reverse the trend, there could be some other reasons behind the market’s snap retreat also.
Mega issues such as PTCL, Hub-Power, PSO and some others in which general investors have a big stake could certainly take the entire market along with them in plus or minus columns if they like so not the others, they say.
“There could be fears about the law and order situation ahead of the presidential referendum as major political parties are opposing it on legal grounds”, they added “but in any case the jolt is temporary as the market has other positive reasons to rely on them and could maintain its upward drive.
But the allied uncertainty both in the pre and post-referendum sessions could have a negative impact on the current trading pattern as investors are unsure about its political fallout, says a leading member of the KSE.
Most of the price changes were, however, fractional and reflected the absence of leading sellers. Rafhan Bestfoods and Wyeth Pakistan remained under pressure and fell by Rs5 and Rs10.
Adamjee Insurance also attracted selling and fell by Rs2.90 and so did 4th ICP, Alico, Fateh Textiles, Shell Pakistan, Millat Tractors, Bata Pakistan, Tri-Pack Films and Ghani Glass, falling by Rs1.50 to Rs3.
Advancing shares were led by Ayesha Textiles, Syed Match, Transpak Corporation, Treet Corporation and Nestle MilkPak, up by Rs1.50 to Rs3.
Trading volume, therefore, shrank to 158m shares from the previous 241m shares as investors took a pause how to react the changed atmosphere. Losing shares force a comfortable lead over the advancing shares at 158 to 111, with 71 shares holding on to the last levels.
PTCL led the list of actives, lower 25 paisa at Rs18.95 on 32m shares, followed by FFC-Jordan Fertilizer, off 55 paisa at Rs71 on 27m shares, Hub-Power, easy 35 paisa at Rs24 on 26m shares, Dewan Salman, lower 10 paisa at Rs18.20 on 14m shares and PSO, off 70 paisa at Rs156 on 8m shares.
Other actives were led by Sui Northern, lower 15 paisa on 8m shares, Pak PTA, easy 30 paisa on 5m shares, National Bank, off 20 paisa on 4m shares, Engro Chemical, lower 15 paisa on 3.474m and Bank of Punjab, steady five paisa on 3.442m shares.
FUTURE CONTRACTS: Speculative issues on the forward counter also showed fractional fall under the lead of ICI Pakistan, which fell by 65 paisa at Rs58.10 on 0.133m shares.
Hub-Power accounted for 4.214m shares, lower 35 paisa at Rs24.25 followed by PTCL, easy 25 paisa at Rs19.15 on 2.740m shares and PSO, lower 55 paisa at Rs157.45 on 1.313m shares.
DEFAULTER COMPANIES: Active trading was again witnessed on this counter under the lead of Suzuki Motorcycles, unchanged at Rs3 on 3,500 shares, followed by Crescent Spinning, up 20 paisa at Rs4.20 on 3,000 shares and Allied Motors, lower 10 paisa at Rs5.575 on 1,500 shares.
Colony Woollen was leading among the gainers, up 95 paisa at Rs5.95 and Kohinoor Gujar Khan among the losers, off Rs1.20 at Rs.1.25.
BOARD MEETINGS: Haydari Construction and Habib Arkady, on April 8, KSB Pumps, and KASB Premier Fund on April 10, and Lever Brothers Pakistan on April 15.