KSE in freefall, declines below 7,000 points

[Naveed Yaseen]

KARACHI: The fast sliding Karachi stocks market fell below 7,000 points threshold to 43-months low on Tuesday, as chief benchmark 100-Index declined by another four per cent in this session.

KSE 100-share Index posted another massive plunge of 4.06 per cent or 293.31 points to 6,924.15 points. The day closing level is the lowest one after May 31, 2005 closing level of 6,857.67 points.

Moreover, the day turnover further shrank to 26.722 million shares as compared to 28.007 million shares a day earlier - showing a fall of 4.6 per cent on day-to-day basis.

Turnover in future market again registered at zero shares against 1,500 million traded yesterday.

Accordingly, another massive outflow of Rs86 billion pushed the overall market capitalisation down to Rs2.155 trillion this session.

The optimistic overseas investors, however, injected another small tranche of $353.5 thousand at local bourses in this session, according to NCCPL website.

The declining turnover in each passing session shows that investors were again getting on the sideline. If this trend continues anymore then market would again be held hostage of government’s poor responses to it, said a dealer.

Therefore, the parallel running junior 30-Index shed another 376.32 points or 5.16 per cent and concluded at 6,919.24 points.

Analysts said that this heavy-sliding trend would continue until concrete and practically viable news about saving stockbrokers land at local bourses. The current situation was the best opportunity for speculators to exploit, push shares price down to possible lowest level, and give their entry from that bottom level.

“The only way to lift the market from current slide is to provide liquidity in market. But unfortunately banks and mutual fund - the major financers in leverage market - seem in no mood to do so,” said a leading dealer.

He maintained that the Continuous Funding System (CFS) MK-II was responsible of current crises, as those who used to work with hard cash in good days were still on safe-side while borrowers’ boat was about to sink anytime if they fail to get immediate financial support.

Financial institutions can play a positive role of rebounding market by buying shares at current attractive levels, but they are also waiting to witness the maximum possible decline in shares prices, another analyst said.

He added that selling activity continued, as fear of brokers’ default in payment of mark-to-market losses remained a major concern for investors. They (investors) also remained concerned over falling equity values & distress selling as Pak-India relations deteriorated furthermore.

The minus sign remained heavily dominated in the broader market, as 165 securities out of total 182 actives fell in red against mere 17 stocks managed to maintain in green territory. No security was closed unchanged in this session.

Highest volumes were witnessed in Maple Leaf Cement at 5.398 million closing at Rs2.73 with a loss of 86 paisa, followed by NIB Bank at 3.611 million closing at Rs3.64 with a loss of 59 paisa, Zeal Pak at 2.679 million closing at 47 paisa with a loss of 13 paisa, TRG Pakistan at 2.083 million closing at Rs1.62 with a loss of 35 paisa, and Arrif Habib Bank at 1.734 million closing at Rs4 with a loss of 97 paisa.

http://www.thenews.com.pk/daily_detail.asp?id=153464