KARACHI, Jan 21: The KSE 100-share index on Tuesday crashed from the recent all-time highs as pent-up badla-related panic selling engulfed all the sectors, pushing it lower by 125.60 points and wiping out a massive amount of Rs26bn from the market capitalization.
After opening higher, stocks plunged on heavy selling in all the pivotals triggered by reports of some exposure problems of capital adequacy in the backdrop of heavy unsettled carryover business.
Although all the leading shares both on the ready and forward counters breached through their circuit breakers, there was no reports of default on the part of any of the badla participants.
Carryover business last week stood higher around Rs15bn but carryover rates have fallen to 36 per cent from the previous 48 per cent claimed to be highest-ever, reminiscent of similar problems as witnessed last May.
“I don’t think all the investors are sitting on the volcano at least at this stage,” one broker feels. “The rebound is around after the market meets its technical demands in due course as it has still to absorb a lot of floating liquidity.”
The KSE index fell by 125.60 points at 2,795.03, or 4.30 per cent, breaching two psychological barriers of 2,900 and 2,800 just in one go, a new record in the KSE trading history.
The total market capitalization, which has attained an all-time peak level of Rs647bn at the fag-end of last week also fell to Rs614.287bn from the Rs640.187bn a day earlier. Together with Monday’s erosion the total comes to Rs33bn.
However, it was not the largest single-session fall in the index as it had fallen by 129.20, 128.76, 132.57 points on Jan 23, 1994, June 1, 1998 and May 20, 2000 respectively because of various negative factors.
The largest fall so far recorded in its trading history was 171.26 points on Oct 2, 1997 owing to Wall Street crash and its fallout on the Asian bourse.
“But the current fall is not as damaging as the previous ones had been as it came in a highly overbought market, massive carryover business and record rise in badla rates and at best could be termed as an overdue technical correction,” commenting on the market’s steep decline some analysts said.
Some others also believe the market has shed its extra load and bears may not be in a position to prevail for a longer period as economic fundamentals are encouraging after the clean bill given by the visiting IMF team and its statement that “Pakistan no more need its financial support.”
But on the floor there was a confusion all around after mid-session as panic-selling virtually flooded the market and share values of the blue chips fell like house of cards in the absence of matching buying from any quarter.
Leading losers were led by BOC Pakistan, Pakistan Oilfields, PSO, Pak Reinsurance Co and Wyeth Pakistan, which suffered fall ranging from Rs7 to Rs30.
They were followed by Adamjee Insurance, Javed Omer, Attock Refinery, National and Pakistan Refinery, Pak-Suzuki Motors, Glaxo-Wellcome, ICI Pakistan, Dawood Hercules, Engro Chemical and Fauji Fertilizer, off Rs3.25 to Rs6.15.
Some of the leading shares, however, did not follow the general trend and rose under the lead of, notably Noor Silk, Faisal Spinning, Fatima Enterprises, Shell Pakistan, Shell Gas, up Rs.1.50 to 9.25. Others rose by fractions.
Trading volume was on the higher side totalling 424m shares but losers forced a strong lead over the gainers at 262 to 49, with 29 shares holding on to the last levels.
Hub-Power led the list of actives, off Rs1.35 at Rs37.65 on 119m shares, followed by PTCL, lower Rs1.20 at Rs24.15 on 93m shares, FFC-Jordan Fertiliser, easy one rupee at Rs12.20 on 32m shares, Sui Northern Gas, off Rs1.30 at Rs250 also on 32m shares and PSO, lower Rs11.90 at Rs226.95 on 23m shares.
Other actives were led by KESC, off 85 paisa on 18m shares, Pak PTA, lower 80 paisa on 16m shares, Engro Chemical, off Rs4.85 on 11m shares,ICI Pakistan, easy Rs3.05 on 9m shares and Pakistan Oilfields, off Rs10.85 on 8m shares.
FORWARD COUNTER: All the leading shares suffered sharp decline on heavy selling PSO, which fell by Rs12 being the leading among them at Rs228.50 on 11m shares. ICI Pakistan, MCB and Engro Chemical followed them, off Rs2.05, Rs3.05 and Rs4.95 at Rs39.20, Rs58.40 and Rs94.15 respectively.
Hub-Power and PTCL were among the volume leaders, off Rs1.95 and Rs1.25 at Rs37.95 and Rs24.30 on 34m and 20m shares respectively.
DEFAULTER COMPANIES: Metropolitan Steel came in for active selling and was marked down by one rupee at Rs15.50 on 46,000 shares followed by Qayyum Spinning, up 30 paisa at Rs0.60 on 20,500 shares and Quice Foods, lower 10 paisa at Rs1.55 on 16,500 shares.