KARACHI, Nov 11: Stocks on Monday finished with an extended fall as investors were not inclined to make bigger commitments owing to the prevailing political mess and the failure of the contenders of power to form the government at the centre. The KSE 100-share index fell by 15.74 points at 2,211.60.
The introduction of 10-day badla trading system from today did take its toll in the form of selling and fears of an increase in its rates during the extended period.
Its (badla’s) phased out replacement by the margin financing until June 30, though is a wise step aiming at checking unbridled speculative activity leading to market stability, worried brokers for the near-term and has a negative impact on stock trading.
The market’s highly volatile performance was well reflected in wide erratic swings of the KSE 100-share index, which at one stage breached the barrier of 2,200 points at 2,190 but later support allowed to finish improved around 2,111.06 points, off 15.74 points.
However, later rumours that a pre-bid meeting of the Privatization Commission to sell the controlling shares of PSO to some strategic investors evoked a good bit of short-covering in its shares and some others associated with it, enabling the index to finish above the day’s low level.
Some negative news about the PTCL and the introduction of 10-day badla trading system from today leading to withdrawal of massive amounts tied to this business and fears of an increase in the badla rates may continue to be one of the destabilizing factors during the next couple of sessions.
Most analysts, however, predict the market may continue to slip from its current high until political parties reach a consensus to form the government at the centre.
“As situation is unclear who will form the government amid counter claims of majority, investors think twice to go beyond the risk areas to avoid undue financial risks”, they added.
Even leading analysts were divided over the direction of the market if certain parties join hands to form the government.”It could fall further or rise from the current lower levels if the investor-friendly government is in place at the centre”, they added.
Although traded volume rose modestly, losing shares maintained a strong lead over the advancing ones, prominent losers being Al-Ghazi Tractors, Gatron Industries, Attock Refinery, Unilever Pakistan and Shell Pakistan, which suffered fall ranging from Rs1.95 to 5, largest fall of Rs5.25 being in Shell Pakistan.
National and Pakistan Refinery, Pakistan Oilfields, Nafees Cotton, Lakson Tobacco, Abbott Lab, Wah Noble Chemical and Cherat Papers, were among the other prominent losers, falling by one rupee to Rs1.75.
However, all was not bad with the broader market as leading shares, notably PSO, Dawood Hercules, General Tyre after becoming ex-dividend and ex-bonus, Grays of Cambridge, and Pak-Reinsurance Co, finished with gains ranging from Rs1.95 to 22.25.
Shahtaj Textiles, Pakistan Cables, and Ferozsons Lab also came in for stray support and were quoted higher by one rupee to Rs1.25.
Traded volume rose to 93m shares from the previous 65m shares but losers maintained a strong lead over the gainers at 60 to 126, with 50 shares holding on to the last levels.
Hub-Power was actively traded, lower 20 paisa at Rs26.20 on 21m shares, PSO, higher by Rs1.95 at Rs193.20 also on 21m shares, PTCL, easy 25 paisa at Rs21.35 on 15m shares, National Bank, off 45 paisa despite sharp increase in nine-month profit of Rs1.664bn and EPS at Rs4.46, up from the previous Rs312m and Rs0.84 respectively, at Rs24.95 on 7m shares and Engro Chemical, off 50 paisa at Rs72.10 on 4m shares.
Other actives were led by ICI Pakistan, easy 10 paisa on 4m shares, Pak PTA, lower 40 paisa on 2m shares, Sui Northern Gas, easy 10 paisa on 1.697m shares and MCB, unchanged on 1.422m shares.
FORWARD COUNTER: PSO came in for active short-covering at the lower level followed by rumours of pre-bidding meeting, up by Rs2.30 at Rs195.20 on 13m shares followed by Hub-Power, easy 20 paisa at Rs26.40 on 10m shares and PTCL, lower 15 paisa at Rs21.55 on 2.878m shares.
Other actives were led by Sui Northern Gas, lower 15 paisa at Rs16.55 on 2.710m shares and Engro Chemical, easy 20 paisa at Rs73.10 on 0.959m shares. All others were modestly traded.
DEFAULTER COMPANIES: Trading activity on this counter was relatively slow as shares of only seven companies came in for trading under the lead of Crescent Spinning, lower 15 paisa at Rs4.70 on 7,000 shares followed by Quice Foods, easy five paisa at Rs1.70 on 4,00 shares and Metropolitan Steel, higher by Rs1.50 at Rs8.50 on 2,000 shares.