KARACHI, May 26: Bears again dominated trading on the stock market on Monday amid another across the board massive fall as there were more sellers than buyers, worried over liquidity problems and political tensions.
The KSE 100-share index breached through the barrier of 13,000 and was last quoted at 12,584.78, off 3.28 per cent or 426.96 points eroding another Rs127.927 billion from the market capital at Rs3,876.325 billion after share values again fell across the board in the absence of buyers even at the terribly lower levels.
The free-float 30-share index suffered bigger fall of 566.50 points or 3.71 per cent at 14,708.09 points.
“The liquidity crunch and higher CFS rates, followed by central bank’s 1.5 per cent hike in discount rate seems to have taken steam out of the market at least for the near-term,” said a leading stock analyst Hasnain Asghar Ali, adding “investors liquidated positions on some counters to make replacement buying on those, which ensure higher capital gains.”
The Pakistan People’s Party’s constitutional package apart, which leaves some major issues unanswered, the attack on the president and demand for his resignation and talk of his negative reaction to the recent moves against him again led to political uncertainty and renewed panic selling.
In similar situations as the prevailing one, investors mostly seek safe havens rather than opting for new buying irrespective of the charm of a massive capital gain at the current lows, said analyst Ahsan Mehanti, adding “the market is passing through that uncertain phase.”
After having received a massive battering and losing well over 1,200 points or nine per cent last week, Pakistani stocks yesterday showed little signs of recovery despite selective short-covering and that the underlying sentiment was still shaky owing to political tensions.
Analysts hoped that the revival of demand at the lower levels, aided by Sunday’s talks of Karachi Stock Exchange high-ups with members of economic advisory committee, would boost the badly-shattered investor confidence in the share business by taking some positive corrective steps. But investors stayed away even at the very lower levels.
What should have generated a good part of short-covering at the current attractively lower levels was the indication at the meeting about extension of capital gains tax exemption for another year, from July 1, they said.
There are two opinions about the constitutional package as it is silent on some of the major issues and demands, but in a way it brought closer some of leading partners of the coalition, which eventually could lead the return of the PML-N again in the corridors of power, some analysts hoped.
“But political tensions are still there amid renewed attack on the president and demand of his resignation by the contenders of power,” said a leading analyst, adding, “the talk of his impeachment and dissolution of assemblies also took its toll in the form of political uncertainty.”
However, behind the scene hectic maneuvering by a foreign power to reach an amicable resolution of the issue could end the uncertainty allowing investors to play their due role. Minus signs again dominated the list under the lead of AKD Capital and HinoPak Motors, off by Rs52.72 and Rs27.45.
Other prominent losers included Arif Habib Ltd, JS & Co, Habib Bank, Adamjee Insurance, EFU General and Life, Lakson Tobacco, National Refinery, Attock Refinery, PSO, Shell Pakistan, Indus Motors, Dawood Hercules, Engro Chemical, Packages, and many others, which suffered a sharp fall for the third session in a row.
But on the other hand, Siemens Pakistan and Colgate Pakistan managed to finish partially recovered from the recent lows, up Rs49.95 and Rs28.45, respectively, followed by Fazal Textiles, Atlas Battery, Sanofi-Aventis, Murree Brewery and National Foods, up by Rs5.90 to Rs9.
Trading volume fell further to 144m shares in the absence of demand from leading investors as compared to 155m shares at the last weekend as losers held a strong lead over gainers at 247 to 74, with 12 shares holding on to the last levels.
Oil sector led the market fall under the lead of OGDC, off by 74 paisa at Rs125.61 on 11m shares followed by Pakistan Petroleum, lower by Rs4.15 at Rs249.50 on 9m shares, PTCL, easy by Rs2.06 at Rs39.21 on 8m shares, Arif Habib Securities, off Rs8.50 at Rs161.55 on 6m shares, Hub-Power, up 33 paisa at Rs30.98 on 5m shares, Pakistan Oilfields, off Rs13.44 at Rs380.15 also on 5m shares, and Fauji Fertiliser Bin Qasim, lower by Rs1.71 at Rs32.51 on 4m shares.
Other actives were led by Dewan Salman, lower by 80 paisa at Rs4.95 on 8m shares, NIB Bank, off one rupee at Rs12.44 on 6m shares and TRG Pakistan, up 29 paisa at Rs6.60 on 5m shares.
FORWARD COUNTER: The OGDC also led the list of actives on the cleared list and was marked up by 78 paisa at Rs126.66 on 7m shares, followed by Pakistan Petroleum, off Rs4.60 at Rs251 on 4m shares, and Pakistan Oilfields, lower by Rs10.78 at Rs384.90 on 3m shares.
JS & Co followed them, off Rs15.80 at Rs519.05 on 2m shares and Arif Habib Securities, lower by Rs8.39 at Rs159.48 also on 2m shares.
The notable feature was that trading also commenced in the June contracts side by side the maturing May settlements, which will be rung off the board during the next couple of sessions.
DEFAULTER COs: Zeal Pak Cement came in for active support and led the list of actives on this counter, unchanged at Rs3 on 2.352m shares followed by Norrie Textiles, steady by two paisa at Rs2.04 on 1.995m shares and Unity Modaraba, unchanged at Rs1.08 on 0.348m shares. Japan Power on the other hand came in for profit-selling and fell by six paisa at Rs6.84 on 0.299m shares.