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Stocks suffered massive erosion

RECORDER REVIEW

KARACHI: The share market during the week suffered massive erosion under the lead of PTCL, Hubco and Sui Northern Gas and the index lost over 94 points when genuine investors left the ring in haste.

The KSE-100 index moved down by 94.34 points to 1,705.39 from 1,799.73 of the previous week. The volume amounted to Rs 1.344 billion with market capitalisation suffering a colossal loss of nearly Rs 19 billion to Rs 439.130 billion at the end of the week.

The share prices tumbled as upcountry punters unloaded their holdings in haste which according to seasoned traders was an act of profit-taking. The prices during last two weeks have appreciated by over 300 points and was ripe to book profits on available levels. Among the debilitating factors were surfacing of profit-taking in PTCL, Adamjee Insurance at inflated levels and disappointing six monthly results of Hubco, which showed less profit compared to same period a year ago.

The index during the first two sessions showed smart rally and broke the 1,800 mark and all traders and dealers were hopeful that soon the index might reach around 1,900 points. But since there was no major positive report on political or economic front, bears took position and made heavy dents in the price run.

The sudden flush of bear runs forced some of the market players to offload their blank positions in the choice scrips. This created scare among the weak holders and small investors and they unloaded their positions, which made heavy dents in the market. The last session before the week closing saw several casualties across-the-board and not a single entity was willing to hold its positions overnight.

PTCL was the lead laggard and made heavy dents in the KSE index. With total weightage of 33 percent, the fall in the share price of PTCL was large and out of 94 points loss during the week, 31 points was due to Telecom. Several said though its results were commendable but the price run up in the last rally was artificial and created by market players. The profit selling in the PTCL during the last two sessions of the week proved that the price of the scrip was lifted artificially.

Hub Power's interim profits, which depicted a fall of over 11 percent to Rs 2.9 billion, unnerved the investors. The decline in the share price of the company further added the miseries and investors lost heavily. However, the company was on the recovery path as investor hope that soon a package would be announced to resolve the two-year dispute with the government.

The high carry over charge (badla rates) also infused heavy selling pressure on the last session of the week. However, after the settlement of the shares for the week was over, the carry charges recovered and were trimmed by almost 50 percent. Analysts believed that the index this week might stage some recovery before showing some resistance around 1650 mark and after the stock values rebound, there are chances that the index by end week might close over 1725 to 1740 mark.

PTCL on a business of 539.007 million shares lost Rs 3.10 to Rs 27.60, Hub Power on a trading of 288.218 million shares suffered a fall of 60 paisa and ended at Rs 26.75. FFC Jordan moved up to Rs 14.15 from the 13.10 as around 73.305 million shares changed hands. KESC on a volume of 50.254 million fell 90 paisa to Rs 12.90 and Sui Northern Gas closed at Rs 19.10, lower by Rs 2.10 on total turnover of 47.765 million shares.