The local share market nose-dived on Monday, following rising worries of market players after allegations levelled by a former SECP chief against brokers and government high-ups, holding them responsible for the March 2005 crisis.
The LSE-25 index retreated to 4104.99 points from 4298.89, registering a fall of 193.90 points. The volume plunged to 26.975 million shares from 40.536 million of Friday, showing a decline of 13.561 million shares.
Led by key banking stocks and petroleum shares, the market mostly stayed in the red zone as dark shadows caused by submissions of Dr Tariq Hassan, an ex-chairman of SECP, in the National Assembly's Standing Committee on Finance and Revenue, gripped the market. Dr Hassan has levelled allegations against big brokers and government high-ups for ill-practices in the stock market that led to March 2005 crisis causing heavy losses to investors.
The ongoing inquires also overshadowed the impact of good payouts declared by NIT on Saturday last, a broker said, adding that even the banks having stake in NIT also shed heavily. However, Askari Commercial Bank and UBL edged higher while National Bank, MCB and PPL were the key losers of the day.
The market was in the grip of uncertainty and panic after Dr Hassan opened his lips and held the government high-ups and brokers responsible for the March 2005 crisis, Javed Iqbal, chief executive of Javed Iqbal Securities Ltd said. "Both sides are making allegations and counter-allegations against each other, which has disturbed the entire market sentiment," he added. "Investors are on sidelines and awaiting the outcome of the inquiries. However, one thing is clear that this time the inquiries will make headway and the responsible persons will be taken to task," he added.
Investors had suffered heavily in the March 2005 crisis. Therefore, they want accountability of the responsible persons who sucked their blood, he said. "I believe this time the government will not let loose the culprits, and will bring them to book for the sake of future of the market," he remarked. The government reportedly has hired Korean experts to probe into the crisis, which is a good step and will boost investors' confidence in the market, he viewed. Koreans have also faced such types of crisis and have expertise in dealing such situations; therefore, the government has rightly chosen them to ascertain the actual causes of the March 2005 crisis.
Overall, 85 scrips hanged hands on the floor, of which 10 improved their worth, 40 landed in minus zone, and 35 were intact to their previous zone. Among most active scrips, Askari Commercial Bank gained Rs 0.95, UBL Rs 0.75, Dewan Farooq Motors Rs 0.35, and Southern Electric Power and Prime Commercial Bank Rs 0.30 each.
In minus, National Bank shed Rs 13.65, MCB Bank Rs 11.85, PPL Rs 11.00, Pakistan Oilfields Rs 10.00 and PSO Rs 7.00. Fauji Cement and National Bank were the volume leaders with 4.382 million and 3.748 million shares, respectively.
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