Heavy selling pressure continued at the Karachi share market on the fourth consecutive day after the removal of the price floor and the benchmark KSE-100 index lost another 320.37 points to close at 7,785.26 points level on Thursday. The index has declined by 16.21 percent or 1,401.84 points in the last four sessions after the removal of the price floor.
The trading volume at the ready counter decreased to 50.765 million shares as compared to 57.820 million shares traded a day earlier. However, trading took place mainly in the second and the third tier stocks. The futures market turnover also declined to 1000 shares against 1500 shares previously.
The overall market capitalisation declined by Rs 91 billion to Rs 2.404 trillion. Trading took place in 177 scrips, out of which 126 scrips closed in the negative and 45 in the positive while the value of 6 stocks remained unchanged.
Pakistan Cement was the overall volume leader of the day with 10.774 million shares and gained Re 0.13 to close at Rs 2.03. TRG Pakistan increased by Re 0.35 to close at Rs 1.65 with 9.188 million shares. Fauji Cement closed at Rs 3.90, down by Re 0.01 with 4.938 million shares. Zeal Pak gained Re 0.02 to close at Re 0.65 with 4.505 million shares.
Pak Prem. Fund lost Re 0.78 to close at Rs 2.28 with 3.956 million shares. Al-Abbas Cement closed at Rs 3.51, down by Re 0.04 with 2.240 million shares. Pak PTA Limited gained Re 0.22 to close at Rs 1.72 with 2.156 million shares. Nimir Ind. Chemical increased by Re 0.35 to close at Rs 1.66 with 1.530 million shares. KESC closed at Rs 2.13, up by Re 0.28 with 1.229 million shares. PICIC Inv. Fund lost Re 0.44 to close at Rs 3.56 with 0.924 million shares.
Ismail Industries and Taxila Engg were the highest gainers and gained Rs 2.15 and Re 1.00 to close at Rs 45.33 and Rs 6.46 respectively while Pak Services and PSO were the worst losers and lost Rs 25.11 and Rs 11.46 to close at Rs 477.13 and Rs 217.89 respectively. Hasnain Asghar Ali at Aziz Fidahusein Securities said that the index breached yet another psychological level of 8,000.
The penny stocks, however, continued to invite turnover, while constant price erosion in the main board stocks, despite the unfreezing, being offered by the foreign funds in 'off market', added to the misery, mainly of the position holders in CFS market as they are not able to find buyers.
Penny stocks sector did continue to invite and offer activity to various market participants as they have an opportunity to freely swap their portfolio securities. On the other hand this gives an opportunity to the liquidity seekers to make an exit. The absence of buyers in the main board stocks, however, remains a point of concern. Despite the general acceptance that the adjustment is likely to continue further, spillover of CFS can further erode the values, increasing nervousness.
Since fundamental facts for evaluation of various other factors will influence decision and can lead to extended adjustment, such as interest rate review, upcoming federal budget, currency valuation and stability and the outcome of the legal battle the buyers are likely to wait for the index to find a bottom before entering the arena ie if the local equities offer the desired rate of return after adjustment of potential investment risks.