KARACHI, Sept 15: Stocks on Wednesday fell across-the-board like ninepins as investors indulged in panic-selling followed by reports that some of the punters were issued exposure notices to clear their outstanding positions. KSE index was off 90.02 points, eroding Rs22 billion from the market capital.
All the leading base shares, notably PTCL and OGDC received one of the heaviest battering, notably the latter in its career since it made debut on the ready board. It fell by Rs3.15 at Rs59.10 and took the entire market along with it, having a weightage of 21 per cent in the index.
Dividend news were on the higher side, notably from the Cherat Cement, whose directors announced a cash dividend of 40 per cent and bonus shares of 25 per cent but investors were worried over some other negative developments. Its share value, however, rose by Rs5.95.
The KSE 100-share index, therefore, broke the barrier of 5,000 on active selling by all and sundry amid rumours of fresh selling on the overvalued counters. It finally finished with a fresh sharp setback of 90.02 points at 4,997.35 as compared to 5,087.37 a day earlier as all leading base suffered fresh pruning at the still higher levels.
Now there could be free for all as the downward breach of the psychological barrier of 5,000 best known as benchmark for the market's upward journey to the index level of 6,000 points is feared to have pushed the market into the danger zone from where it could move further lower.
The opening was fairly promising followed by official clarification that the mutual funds are exempted from the withholding tax levied in the budget at the rate of 0.5 per cent as a section of investors picked some of the low-priced funds ruling well below their face values for the last couple of years.
But what seems to have accelerated the pace of selling was reports that the punters have been served with exposure notices apparently owing to their failure to meet their clearing demand, brokers said.
"And triggered panic-selling from those who were served with notices as they tried to line up funds to clear their outstanding positions", they said "an identical sell-off came from the weak holders who could not precisely understand the cause behind the prevailing panic".
What is more disturbing is the fact that financial institutions did not come to rescue of the market as there was no intervention from them even on those counters, which ensure handsome capital gains, analysts said.
The near-term direction of the market is unclear as there are bearish signals all along even from the political front and tribal areas where fighting between the militants and the law enforcing agencies continues, they said.
Minus signs again dominated the list, major losers being Pakistan Refinery on post-dividend selling, Millat Tractors, IGI Insurance and Arif Habib Securities, off Rs7.50 to Rs18. Other notable losers included Island Textiles, Reckit and Benckiser, Murree Brewery and Shezan International, off Rs4 to Rs5.
Leading gainers included Javed Omer, EFU Insurance, National Foods, Cherat Papersack, Habib Sugar, Pakistan Cables, and some others, up by Rs3.05 to Rs5. Trading volume rose to 191m shares from the previous 176m shares owing to heavy selling in the overvalued shares, while gainers trailed far behind the losers at 95 to 193, with 38 shares holding on to the last levels.
OGDC topped the list of actives and fell sharply by Rs3.15 at Rs59.10 on 36m shares followed by Chakwal Cement, up by 90 paisa at Rs8.85 on 25m shares, D.G.Khan Cement, off Rs1.65 at Rs54.20 on 20m shares, Hub-Power, unchanged at Rs31.20 on 12m shares and PTCL, lower 75 paisa at Rs38.40.
On the forward counter Pakistan Petroleum also attracted large selling and fell by Rs2.10 at Rs108.50 on 28m shares. Other actives were led by Bank of Punjab, lower 90 paisa on 8m shares, Fauji Fertilizer Bin Qasim, easy 50 paisa on 7m shares, National Bank, off 80 paisa also on 7m shares, Lucky Cement, easy 35 paisa on 6m shares and Nishat Mills, lower 95 paisa also on 6m shares.
FORWARD COUNTER: In sympathy with steep decline in the ready section, speculative issues on the forward counter also suffered sharp pruning under the lead of PSO and Pakistan Oilfields, off Rs2.50 and Rs2.70 respectively.
Among the other actives, Pakistan Petroleum was again on the top, off Rs2.10 at Rs108.50 on 28m shares followed by OGDC, easy Rs250 at Rs59.30 on 15m shares, D.G.Khan Cement, lower Rs1.50 at Rs54.40 on 6m shares, PTCL, easy 65 paisa at Rs38.50 on 5m shares and National Bank, off 75 paisa at Rs67.80 on 3m shares.
DEFAULTER COS: Dull trading was witnessed on this counter in the absence of demand. Prices showed either-way fractional changes amid slow trading.
DIVIDEND: Cherat Cement, cash 40 per cent, plus bonus shares of 25 per cent, Artistic Denim, cash 40 per cent, Pakistan Refinery, final 25 per cent, interim of the same amount already paid, Karam Ceramics, cash 15 per cent, Guardian Modaraba, cash 10 per cent, Habib Modaraba, cash 20 per cent, right shares 100 per cent, Hajveri Modaraba, Dynea Pakistan, International Knitwear, all nil.