The stock market for the third consecutive session received heavy jolt, and all the blue chips and investment suffered heavy losses on rumours that some of the big players have offloaded their holdings and a couple of members have defaulted. Though these all were rumors and the market went under heavy recession as investors sentiment dampened.
The KSE-100 like many sessions opened on a strong note, but witnessed selling pressure in pivotal, which not only slides the index, but created a lot of volatility. "Weak underlying sentiment of the participants forced several investors to liquidate their positions rather than taking fresh ones."
A leading analyst from First Capital Equities said that the benchmark-100 seems to be void of any positive response whatsoever, as the market woke up to a positive news of a consortium of foreign banks which would provide a credit line to Etisalat for funding PTCL's purchase, hence quashing the rumours of an extension was unable to lift the market in anyway.
The bourse was under great strain as all core stocks - PTC, OGDC, PSO, POL, NBP, MCB and DGKC - came under heavy selling load while PPL, ACBL, and AICL were parked on their lower locks on closing basis.
The market closed below 7100, showing frailness and as primary sentiment of the market looks delicate, the index can touch 6880-6980, having said that, as KSE-100 hasn't corrected itself from 7480, it seems a recovery is inevitable with sizeable volatility, so caution is advised with profit margin and stop loss in mind.
Tanvir Abid, head of research from Live Securities, said that despite that Etisalat has appointed a consortium of international banks to arrange the financing for PTCL's acquisition, thereby brushing aside earlier rumours that Etisalat had sought extension in making payment in this respect, the market received heavy battering.
From the 7482 points intra-day high on Monday (August 8), the KSE-100 index has lost a cumulative 417 points or 5.6 percent. Sentiments in the market are weak and share prices seem to be governed by various rumours.
Following the release of the task force report, there are rumours that show-cause notices have been issued against some brokers or that inquiries have been initiated against them.
Further, the liquidity and financing gap in the market remains. Recommendations of the Shaukat-Tarin Committee were earlier submitted to the Adviser to the Prime Minister on Finance Dr Salman Shah. However, till this point, no decision in this regard has been announced.
On Tuesday last, a notice was issued stating that the Crescent Standard Brokerage has acquired 35 percent equity stake along with management control of Javed Omer Vohra and Company (JOV).
It mentioned that 7 million shares were purchased at Rs 175 per share. JOV's share price closed limit down for the eighth straight day to Rs 174.65. Besides this, a number of stocks closed at or near their lower circuit levels.
These include PPL, Askari Bank and MCB. Askari Bank's half-yearly results were below expectations with earnings posting approximately 27 percent decline.
"We feel still that this market has got a lot of unsettled issues that need to be solved by the authorities concerned", a leading trader from Elixir Securities said. This market has been left hanging in a haze of uncertainty, which is emptying even the deepest pockets.
PPL, which had been under the limelight for some time, closed limit down at Rs 157 followed by MCB, which closed lower at Rs 85.20. Liquidity issues need to be resolved quickly to avoid further erosion in the market.
The KSE index lost 120 points, or 1.67 percent to 7064.29 points. The volume fell to 116 million shares as against 148 million shares.
PTCL gained 25 paisa to Rs 60.90 on a volume of 34 million shares, OGDC declined by Rs 1.80 to Rs 99.50 on a trading of 17 million shares, NBP moved down to Rs 103.35 from Rs 106.85 on a turnover of 9.3 million shares, Fauji Fertiliser Bin Qasim lost 30 paisa to Rs 29.80 on deals of 9 million shares and PPL closed at Rs 157, ie lower by Rs 8.20 on a trading of 7.2 million shares.
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