KSE index breaches 1,400-point barrier on panic-selling
dawn.com
By Our Staff Reporter
KARACHI, Nov 1: The KSE 100-share index on Thursday breached through jealously guarded psychological barrier of 1,400 points on panic-selling triggered by war threats by India , but leading stock analysts are not inclined to believe that the run-up is overdone.
"Being in a highly overbought position the market finished with an extended loss owing to strong institutional selling after the bears made the war threat an excuse to outwit bulls," a leading stock analyst at the Moosani Securities claims.
A steep decline in the turnover figure reflects that there were not many sellers at the decline on the perception that the shakeout is temporary and not backed by the market fundamentals at least for the near-term
The KSE 100-share index, which was ruling firm above the resistance level of 1,400 points breached through it at 1,377.87, off 28.18 points or two per cent as PTCL, one of the leading base shares again attracted strong selling.
It has fallen by about 50 points during the last three sessions from the peak level of 1,425 but analysts said it could fall further at the weekend session. Trading volume shrank to 120m shares, reflecting that investors were not inclined to sell at the falling prices.
The market decline was led by the oil shares, notably PSO and Shell Pakistan on selling triggered by further downward revision of petroleum prices for the next fortnight ending Nov 15. Both fell by Rs.3.75 and 9.50.
Stock analysts said there are several reasons behind the snap market reversal including Wednesday's increase in carry over volume in most of the blue chips, which prompted selling from the weakholders. But the immediate cause of the market's downward drift was war threats from the Indian army high-ups. The threats include crossing over the line of control to occupy Azad Kashmir to curb 'cross-border terrorism', they said.
"The massive overnight liquidation by the financial institutions failed to find matching support from the general investors amid war hysteria and consequent sympathetic selling from jobbers pushed the market lower," analysts at Aziz Fidahusein & Co claim.
Stocks analysts at the WE Financials say despite market's snap reaction there is no change in basic fundamentals, and there are reasons to believe that bulls could fight back after the current consolidation phase is over.
"There may not be any border clash between Pakistan and India until the Afghan situation settles down," they said. "Those who know the developing scenario rule out such a possibility and are covering positions in blue chips at the lower levels."
Two important board meetings (Hubco and PTCL) on Nov 5 and 8 could well prove the launching pad for the renewed bull-run, and no one should have any doubts in this regard, they said.
Although minus signs dominated the list, leading shares managed to put on fresh gains under the lead of Alico, Bhanero Textiles, Lawrencepur Woollen, Dadex, Siemens Pakistan, Glaxo-Wellcome Pak and Packages, which posted gains ranging from Rs.1.50 to 4.00.
Losers were led by MCB, Adamjee Insurance, Gadoon Textiles, ICI Pakistan, Lever Brothers and Pakistan Oilfields, off Rs.1.25 to 3.75.
Trading volume fell to 120m shares from 230m shares a day earlier as losers maintained a strong lead over the gainers at 105 to 42, with 32 shares holding on to the last levels, out of 179 actives.
PTCL topped the list of most actives, off 45 paisa at Rs.17.55 on 73m shares, Engro Chemical up 30 paisa at Rs.56.35 on 13m shares, ICI Pakistan, down Rs.2.65 at Rs.50.85 on 10m shares, PSO, sharply lower by Rs.5.55 at Rs.106.05 on 5m shares and Sui Northern, lower 55 paisa at Rs.10.80 on 4m shares.
Other actives were led by Hub-Power, lower 15 paisa on 3.429m shares, MCB, off Rs.1.25 on 2.082m shares, Fauji Fertilizer, easy Rs.1.05 on 1.887m shares, Adamjee insurance, off Rs.2.05 on 1.879m shares and Dewan Salman, lower 70 paisa on 1.021m shares.
FUTURE CONTRACTS: PSO came in for heavy selling partly in sympathy with its ready counterpart and passed through emergency clearing as the fall of Rs.5.50 was well above ceiling limit of Rs.1.50. Other showed fractional decline.
PTCL and Hubco were actively traded, off 45 and 25 paisa at Rs.17.75 and 21.40 on 0.1.791m and 0.741m shares respectively.
DEFAULTER COMPANIES: Allied Motors came in for active support and was marked up by five paisa at Rs.3.15 on 2,000 shares followed by Ravi rayon, unchanged at Rs.0.75 on 1,000 shares and Gammon Pakistan, higher by 50 paisa at Rs.12.00 on 500 shares.
DIVIDEND: Paramount Leasing cash eight per cent, Escort Investment Bank and Polyron, all nil for the year ended June 30, 2001.
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I am posting this to show and bring out some of the present and real activities in Pakistan. |
