KSE-100 index hits 13 months high ahead of Eid Holidays

The bull run continued at Karachi Stock Exchange (KSE) on Friday, a day ahead of the Eid holidays. KSE 100-Index hit the highest level of 13 months. The business started in a positive zone and buying by the foreign investors helped index in crossing the 9,400 points. At the end of the day, index closed at 9,436 with an addition of 213 points which was last witnessed on August 2008. The business volume remained 240.45 million shares. Jahangir Siddiqi and Company’s shares remained prominent whose share reached Rs 30.53 with an addition of Rs 1.45.

Karachi Stocks hits four-year low as foreign funds exit emerging markets

The continued distress-sale of shares by the foreign portfolio investors and irresolution of debt issue at Karachi bourse between brokers and banks pushed market down to new low of four-year on Wednesday.

With another notable plunge of 121.80 points or 2.32 per cent in this session, the KSE 100-share Index depreciated to 5,136.48 points. The day closing level is the lowest one after September 28, 2004 closing of 5,128.13 points.

The parallel running junior 30-Index slashed 152.04 points or 3.08 per cent and concluded at 4,782.97 points.

Hasnain Asghar Ali at Aziz Fidahusein observed that although private and government sector funds did stay prominent buyers in various main board stocks many even succeeding in trading above lower locks, foreign downpour strengthened further as it joined hand with selling by local participants thus never allowing the buyers to resist the high tides, and the KSE benchmark was yet again pushed to deep-red. Analysts said that foreigners were offloading their holding for one reason or the other. They withdrew another over $8 million in this session only.

“Perhaps, overseas investors know what are the true vales of each stocks and they would indulge into buying from those pre-supposed levels or they are reshuffling their portfolios in accordance with the new stocks market orders,” commented a leading analyst.

He maintained that in the newly emerging era - post economic recession period or recovery phase - some tier two stocks would occupy the place of leading stocks in top of the actives list and vice-versa. This phenomenon is, at present, in the making and become visible when every thing would have been settled, he added.

The unresolved issue debt, which brokers owe to banks, is not allowing bulls to show their muscles. Otherwise, bulls are ready to overcome the crisis and waiting for the green signal, other analysts said. With the massive correction in international oil prices and decline in demand of other commodities as well at world level, the oil and food inflations have started easing down in the country. Amid the trade and current account deficits have also started reducing in the last couple of months. These are the good signals for the local economy and would encourage equity investors to stage come back once the local issue of debt at bourses are resolved, they added.

Ahsan Mehanti at Shahzad Chamdia Securities said besides massive foreign selling and debt issue, the rupee depreciation and turmoil in the international equity markets also discouraged investors to remain on the sidelines.

This session, therefore, witnessed sharp decline in many of the stocks prices and recorded low turnover too.

The day turnover dropped down to 90.769 million shares as compared to 143 million shares changed hands yesterday - showing a decline of over 34 per cent on day-to-day basis. Activities in future market remained shunned.

Another outflow of Rs38 billion from the overall market capitalisation shrank it to Rs1,639 billion.

Out of total 270 actives, 198 stocks declined, 60 advanced, while the value of 12 stocks remained unchanged.

Oil and Gas Development Company remained the volume leader with 9.340 million shares closed at Rs44.29 with a loss of Rs2.17, followed by National Bank with 6.612 million shares closed at Rs51.94 with a loss of Rs2.73, Pakistan Telecommunication Company with 6.119 million shares closed at Rs12.96 with a loss of 58 paisa, Zeal Pak with 4.192 million shares closed at 47 paisa with a loss of one paisa and Hub Power with 4.036 million shares closed at Rs14.77 with a loss of 41 paisa.

Profit-taking erodes values at Karachi stock market; up 69 points

Profit taking eroded morning gains in leading scrips at Karachi Stock Exchange (KSE) but 100-index surged by 68.94 points to close at 6143.81 on fourth consecutive day while the investors were irritated over waiting for the launch of government market supporting fund.

The Karachi Stock Exchange’s benchmark KSE-100 index while on gaining spree close at 6143.81 crossing the physiological barrier of 6,000 points. Though the market landed in the positive column but it seems that optimistic signs are taking the turn again to pessimistic sentiments. The optimistic signs are obvious when bourse opened with a positive note and its both session remained positive while at mid-session the index had gained over 169 points before dropping back to 69 points at the closing session.

Volume was remained in downward trend of 145.449 million as compared to 165.193 million on last working day Tuesday, far below the average 250 million shares that was the daily routine when bourse was considered to be a best performer market in Asia in 2007.

Shares have taken U-turn after the announcement of marketing supporting fund last Thursday close. At that time the bourse had already been lost 37 per cent of its value since December 15, when regulators removed a “floor” imposed in August to stop heavy losses on the KSE-100.

Life returns to the capital market

Life returned to Karachi Stock Exchange and things took a bright look after suffering gloomy atmosphere at least for last six months.

The market saw shapes of green after being gripped of bearish sentiments after the removal of the cap from KSE-100 which gained 40.39points to close at 5,793.57points level while turnover surged by 179% from yesterday to 210.8m shares. In the overall market, bulls were finally able to thrash the bears by 166 to 71 from overall 241 scrips traded today.

In fact the driving force behind igniting spark in the market was the injection of Rs20 billion State Enterprise Fund as the National Bank of Pakistan, Employees Old age Benefits Institution (EOBI), State Life of Pakistan and a banking consortium transferred Rs5 billion each to the Fund being managed by National Investment Trust.

Resultantly, fresh life in the market was quite visible from the beaming faced of the depressed brokers and investors who suffered heavily due to financial turmoil and suspension of the trade at KSE at least for three months.

It looks that the major issues concerning the market are about to be addressed within a couple of days to bring a spark in the market following activation of Rs20 billion fund sparked new hope in the investors.

It may be noted that several brokerage houses and agencies either compelled to suspend their business operations and thousands of people attached to the stock market were rendered jobless as a result of the financial turmoil which consequently forced the regulators to suspend business operations at Karachi Stock Exchange for more than three months from October to recently ended December 2008.

Many people earning their bread and butter from stock exchange had to switch over to other professions and most of them have to sell their assets including houses, cars and other valuables to make up the losses incurred in the wake of financial melt down at the capital market.

The uncalled for suspension of business at the capital market due to fear of a thud fall sent a bad message of the economy abroad and provided an opportunity to the credit rating agencies to for downgrading of the sovereign rating of the country. However, the fear of heavy correction proved true which is reflected in the drop of the index to the level of 5,753 from over 15000 point level when the financial crisis hit the economy.

Meanwhile NIT is quite ready to launch the Rs.20 billion NIT-State Enterprise Fund without losing any time as NIT has completed all necessary legal work which includes signing of the agreement with the financing institutions and the approval of Guarantees of the government of Pakistan.

The legal work which entailed a lot details and paper work including the registration, approval of the Fund, Financing Agreements, Guarantees etc all have been accomplished.

The fund can only invest in 8 eligible stocks which are identified as OGDC, PSO, PPL, SNGPL, SSGC, KAPCO, and NBP AND PTCL.

According to NIT, the Fund is intended to sell units to the non-resident Pakistanis after the initial operation and after the market stabilization. The stocks mainly related to strong state owned organizations would perform well and provide necessary security to the financers of the fund and send strong signals to the market which is overly depressed at present. Returning to day’s business, the investors took fresh positions in major blue chips items like OGDC, PTCL, UBL, DGKC and NBP which also were the volume leaders today.

Karachi stock market starts new year dismally; down 112 points

Devaluation spree of shares prices at Karachi Stock Exchange remained continue unabatedly even on the beginning of new year and amid hopes for the unveiling of marketing supporting fund programme this week. Thursday was the 14th consecutive day after the removal of floor mechanism when Karachi Bourse meltdown unabatedly shedding further 1.9 per cent value - lowest in the recent past - meaning the market has so far lost 37 per cent of its value since December 15, when regulators removed a “floor” on the benchmark index imposed in August to stop such colossal losses to investors and brokers.

Though, market meltdown ratio remained minimum in today’s business as traders were optimised that government would unveil bailout package within current week.

The ramshackle Karachi Stock Exchange went further down as KSE bourse had lost 111.83 points and wrapped up at 5,753.18 below 6,000 psychological barrier after a long span of time.

Volume was 75.43 million shares, as compared with the average 250 million shares that traded hands daily in 2007

Last four years’ gains wiped out on bourses

The calendar year 2008 eroded the last four years straight and unprecedented growth of local stock markets, as Pakistan’s leading benchmark KSE 100-share Index crashed by over 58 per cent to four years low of Dec 2004 level.

The KSE 100 plummeted 58.332 per cent or 8,210.82 points on year-on-year basis to 5,865.01 points on Wednesday from 14,075.83 points on Jan 01. Over the same period, an outflow of Rs2.471 trillion from market capitalisation was also noted.

Average daily volumes in the cash market fell 48 per cent in 2008 to 133 million shares. While foreign portfolio investors disinvested US$439 million in net during the year.

The year started at local bourses with confidence, cheer, and smooth flight to record high till April despite a lot of hue and cry on political front.

Banking, mutual funds, oil marketing companies, refineries, insurance, telecommunication, cement, fertilizer, automobile almost all of the economic sectors were performing on fast pace with every passing day.

But, the global economic recession - that was initiated with the mortgage sub-prime issue in the USA in middle of calendar year 2007 - surrounded equity markets across the globe where the local bourses were no exceptional.

The sub-prime mortgage issue started impacting local bourses from middle of April when Karachi Stock Exchange (KSE) proposed further extension in the exemption of Capital Gain Tax (CGT) on share transaction, which it was enjoying since 1973.

Government was seen firm to end CGT exemption on June 30, as it was viewing market as a strong and potential source of taxed income owing to its unmatched performance over the last seven years - Since year 2000.

The difference of opinion between government and brokers created a rift between the two and brokers - who were enjoying strong hold and monopoly - started pulling down the market to convince the government that CGT was not in market’s favour, experts recall.

Eventually, the market got another two years’ extension in CGT up to June 30, 2010, but by the time it got extension sometime in July market had incurred heavy losses.

In the meantime, the global recession had sped up its impact, and on local political front the PPP-PML(N) coalition government had presented a strong case against Gen. Musharraf who had to step down from President office in August.

This political rift between President and Prime Minister’s camps never allowed the local bourses to come out of depression till then. Yet it (market) was getting posited to stable, but the failure of coalition government to reinstate all deposed judges on Nov 03, 2007 position resulted in the break-up of coalition government.

This all lingered the political crisis amid continuous withdrawal of funds by overseas investors, and the revealing of a number of weaknesses in the local economy altogether shattered the equity investors’ confidence on the bourses.

Till this time, players had put all of their money on stake at bourses and market authorities had started making margin calls and mark-to-market losses, which many of them had failed to deliver.

On the other hand, State Bank of Pakistan had raised its discount rates from 10.5 per cent to 13 per cent during May to July and also drained out money from market by using some tolls to control the historical high inflation in Pakistan.

However, SBP inflation control policy proved fatal for equity markets, as tight monetary policy created liquidity crunch.

To run away from massive level default and bankruptcy of brokers, the Securities and Exchange Commission of Pakistan and authorities at local bourses made many regulatory changes. The last change was the introduction of floor-price mechanism in August that prevented incurring losses for about three and half months, but lifting of floor on Dec 15 resulted in fresh 36 per cent decline in market.

“Imposition of price floor by the regulators was the confidence killer for the market as it created one of the worst crisis in local markets. Karachi bourse that fell by 35 per cent before the imposition of floor, crashed by 36 per cent in 12 trading sessions after the lifting of floor rule,” reported JS Global.

The market experts are looking forward to consolidation of market in around the current level while ruling out any sudden upsurge in the index.

Karachi Stocks end 18 per cent lower for week

KARACHI: Pakistani shares fell to end at an almost three-and-a-half year low on Friday, taking the loss for the week to 18 per cent since a floor on the main index was removed.
The Karachi Stock Exchange 100-index fell 3.48 per cent, or 270.84 points, to end at 7,514.42 points, its lowest close since Aug. 24, 2005.
Turnover was 32.7 million shares and dealers said most trade was in third-tier shares with almost none in heavyweights.
‘Until now we have not seen any investor interest in blue-chips,’ said Sajid Bhanji, a dealer at brokers Arif Habib Ltd.
Dealers also said shares traded off-market were still 30 per cent lower than their official prices.
According to the latest data up to December 18, Engro Chemicals Ltd was being traded at 100 rupees a share, or 31.2 per cent lower than its official closing on Friday.
National Bank of Pakistan was traded at 45 rupees, or 40.6 per cent lower than its Friday close.
Dealers said a report this week of a support fund for the market did not help improve sentiment and they would believe the fund if and when it materialised.
The KSE management, including the Securities and Exchange Commission and the National Clearing Company of Pakistan Ltd, are facing cases filed by brokers seeking settlement of amounts borrowed through a continuous funding system, a funding mechanism for some stocks listed on the KSE.
In the currency market, the rupee ended at 79.45/55 to the dollar compared with 79.40/50 on Thursday and despite a decision by Standard & Poor’s Ratings Services to raise Pakistan’s sovereign ratings to CCC-plus from CCC.
A currency dealer said the ratings rise did not do much for the rupee, adding: ‘But it’s very important now to meet the IMF’s targets.’ Dealers said the outlook for the rupee was weak and even if imports decreased, they were expecting a slowdown in exports and overall economic growth, which would put pressure on the currency.

KSE 100-index falls to 3-year low

KARACHI: the Karachi stock market shares fell to end at a more than three-year low on Thursday and dealers said the market is likely to remain under pressure as off-market transactions were up to 40 percent lower than official share prices.

The Karachi Stock Exchange 100-share index fell by 3.95 percent, or 320.37 points, to end at 7,785.26 points, its lowest close since Sept. 1, 2005.

Turnover was 20 million shares and dealers said most trade was in third-tier shares with almost none in heavyweights. The KSE 100-index has shed 15.26 percent since the removal of a floor on it on Monday.

The index has fallen 44.7 percent this year. The floor was imposed in late August after sharp falls and it led to the withering of trade.

"Shares traded off-market are still 35 to 40 percent lower even though the KSE-index is now 15 percent lower," said Shuja Rizvi, director broking operations at Capital One Equities Ltd. According to the latest data up to Dec. 17, National Bank of Pakistan was being traded at 45 rupees a share, or 40.6 percent lower than its official closing on Thursday. Pakistan Telecommunication Co Ltd was traded at 15 rupees, or 41.6 percent lower than its Thursday close. Dealers said reports of a support fund for the market did not help improve sentiment and they would believe the fund if and when it materialised.

Shaukat Tarin, the country's top economic adviser, said on Tuesday a support found was being set up and shares worth 20 billion rupees ($247 million) would be sold to overseas Pakistanis, the Dawn newspaper reported on Wednesday.

Tarin, who was not available for comment, said the "modalities" of the fund would be released in two or three days, Dawn said.

Legal cases were also dampening trade. The KSE management, including the Securities and Exchange Commission and the National Clearing Company of Pakistan Ltd, are facing cases filed by brokers seeking settlement of amounts borrowed through a continuous funding system, a funding mechanism for some stocks listed on the KSE.

In the currency market, the rupee was flat at 79.40/50 to the dollar compared with 79.40/60 on Wednesday and dealers said the outlook was bleak even though the current account deficit in November narrowed.

The current account deficit narrowed to $810 million in November, compared with $2.172 billion the previous month. Dealers said even if imports had decreased, they were expecting a slowdown in exports and overall economic growth, which would put pressure on the rupee. The rupee has lost 22.4 percent against the dollar this year.

Karachi stock market loses 370 points after lifting of floor

The Karachi stock market witnessed a sluggish trading session on the first day of the week Monday as investors went for selling activities in across the board stocks after the ‘floor’ was lifted, analysts said.They said after three and a half month half months the index floor was removed and the index lost 370 points as the market opened without funds to bailout the capital market while investor’s were concerned over falling sentiments on probable broker defaults and awaited Sindh High Court’s decision regarding outstanding CFS position.

The Karachi Stock Exchange (KSE) 100-share index shed a massive 370.00 points to close at 8,817.10 points as compared with 9,187.10 points traded in the previous session. The KSE 30 index lost 493.53 points and closed at 9,434.80 points as compared to 9,928.33 points of the previous session. KMI 30 index also declined by 540.50 points and closed at 10,683.68 points as against 11,224.18 points of the previous session.

The market turnover made substantial gain and traded 17.86 million shares as compared to the previous session’s 0.056 million shares. The overall market capitalisation went down by 3.77 percent and closed at Rs 2.702 trillion as compared to Rs 2.808 trillion traded in the previous session. Out of 127 companies, five closed in the positive zone, 120 in negative while two remained unchanged. Analysts said amid threat of legal battle, the authority made it the point to resume trading at KSE, although the main board stocks failed to register trades that in turn never allowed the index to reflect an adjustment of 5 percent, which is 460 points on the first day of resumption, nevertheless the benchmark breached the 9,000 points psychological level. It is therefore worth mentioning that the day the index stocks register trades the index will reflect the entire adjustment.

The unconfirmed news that various members have followed pursuit and have signed the petition restricting release of CFS MKII holdings and refraining the KSE management from demanding mark to market losses from the members, kept the uncertainty regarding functioning of the bourse amid restriction on demanding losses. Zeal Pak was the volume leader in the share market with 12.82 million shares as it closed at 39 paisas after opening at Rs 1.16 losing 77 paisas. Nimir Ind Chemical traded 1.12 million shares as it closed at Rs 1.15 after opening at Rs 2.13 losing 98 paisas. Equity Mod traded 0.975 million shares as it closed at 93 paisas after opening at Rs 1.75 losing 82 paisas. Investec Sec traded 0.639 million shares as it closed at 37 paisas after opening at Rs 1.29 shedding 92 paisas. Southern Electric traded 0.428 million shares as it closed at Rs 2.79 after opening at Rs 3.60 losing 81 paisas. Like previous sessions, futures market continued to remain static as no activity was witnessed during the session. staff report

SHC puts on notice stock exchanges, NCCPL, SECP & MoF

A division bench of Sindh High Court (SHC) Monday issued notices to all the three bourses, National Clearing Company of Pakistan Limited (NCCPL), Securities and exchange commission of Pakistan (SECP) and the finance ministry on two identical petitions filed by United Bank Limited (UBL) and IGI Investment Banks Limited challenging the impugned directives of NCCPL.

The petitioners claimed in the petitions that NCCPL (respondent no 2) has developed and established an automated platform under the name and style of Continuous Funding System Market. This system is referred to as CFS Mark-II aimed to provide funds to members of all three stock exchanges in Pakistan on a centralised basis along with comprehensive risk management.

The petitions said the CFS Mark II System is designed to provide financing to brokers and their clients to purchase securities. Such funding is arranged by NCCPL by raising finances from CFS Financiers such as the Petitioner.

The petitioners have challenged the of impugned illegal directives, of which the petitioners have already “under went business disruption” and it is “apprehended that the petitioners may incur additional /extra costs” due to actions by the respondent No 2 which are confiscatory in form and in substance and amount to expropriation.” The bench comprising Justice Khilji Arif Hussain and Justice Syed Mehmood Alam Rizvi issued notices to Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange and NCCPL, SECP and finance ministry for December 16.

Earlier, the bench heard arguments in two identical petition filed by UBL and IGI Investment Bank Limited who submitted their major grievances as financial institutions.

The petitioners are in effect a secured lenders and Respondent No 2 has provide regulations and procedures for the protections to minimise risks under taken by such CFS Financiers (such as collection of margin and marked to market losses).

On the other hand the Respondent No 2 arranges financing for essentially speculators as they purchase securities with borrowed money and consequently wish to maximize their gains by taking a leveraged positions.

Thus such speculators are expected to and indeed the Respondent No 2’s Regulations and Procedures requires them to bear the losses on account of their leveraged positions.

The petitions said the impugned directives and the proposals circulated on 6-12-2008 is an attempt by Respondent No 2, at the behest of Respondent No 1, to unilaterally amend the terms of the agreement entered into between the Petitioners and Respondent No 2.

They said the impugned directives and the proposals circulated on December 6 are, even otherwise, contrary to public interest, does not protect the interest of the investors and against the interest of the capital markets, as all future financing of equity markets and/or transactions could be jeopardised. As such, the same have been issued by Respondent No 2 without lawful authority.

The Petitioner, therefore, sought a declaration that the Impugned Directives issued by Respondent No 1 and the directions/notices issued therein by Respondent No 2 are illegal, void ab initio and of no effect whatsoever.

SECP directives to end floor-price rule by Friday

The SECP and stock market’s guns are silent for now since chairman of the apex regulatory body left Saturday’s (Dec 06) meeting inconclusive with his last words on record that he would himself issue directives on floor in a day or two. “No communication has been built so far from both sides of the fence i.e. (1) Securities & Exchange Commission of Pakistan (SEC), and (2) the officials of local bourses, and none of them tried to approach each others on the issue of floor,” officials of two sides verified.

SECP officials, however, endorsed that directives to end the floor-price rule on Dec 15 would be sent to the three local bourses last by Friday, Dec 12. “The SECP does not work on government holidays and the issuance of directive would not be delayed beyond Dec 12,” they reiterated.The staff of the Commission would resume office on coming Thursday, Dec 11, after celebrating Eid, it was learnt.“Local bourses i.e. Karachi, Lahore and Islamabad do not have powers more than the apex regulatory body and if SECP has once issued directives in any regard then bourses have to comply it. This is the Commission’s legal position,” replied a Commission-Director.Floor to stay beyond Dec 15:

A member-director on KSE Board, however, was of the firm belief that floor-mechanism would stay beyond the verbally given deadline of Dec 15 by SECP.As far as the question of SECP directives on floor is concerned then they would only be acceptable to the bourse if directive were included an applicable solution regarding the leverage market, he added.If SECP ruling would be of one line sentence like “Remove the floor on Dec 15”, and included nothing else like how to resolve the issue of massive leveraging in market then markets have a right to approach the Supreme Court and obtain a stay order.“According to the hierarchy of our legal system, Supreme Court holds the top-most position in Pakistan and it is also over and above any apex regulatory body e.g. SECP,” explained the director. “Moreover, the Board of Directors of Karachi Stock Exchange (KSE) has powers to shut the market down and this is our legal position,” he replied.“We will decide what to do ahead of SECP directives if are issued to us. Otherwise we have held no internal (formal or informal) nor the any external meetings since Saturday, Dec 06,” he said.

He affirmed that Board of Directors of Karachi Stock Exchange Board will not let its members down owing to their weak financial positions and only an applicable solution can convince market representatives to act in compliance with SECP directives.Officials of both the sides, however, said that what so ever measures would be taken at markets, they will be taken in accordance with ‘mutual consent’, which is the past practice of two regulators (i.e. SECP & other bourses), Extension in CFS rollover likely: One of the applicable solutions that the three bourses had put before SECP-Chairman Razi-ur-Reham was the extension in CFS rollover period by six moths and KSE Board expects this to be included in the directives, which are heard to be issued by Commission regarding floor removal.

This complicated situation emerged after IMF barred government from using public money to bailout a cash-starved stocks market last week. Markets have entered into the fourth month under floor-rule since it was introduced on Aug 27.The reason for imposing floor was to escape from likely default situation by the market members, as KSE 100-share Index had fallen by about 41 per cent amid an outflow of about Rs2 trillion market capitalisation by Aug 27 from its peak position of 15,676 points on April 18, this year. At current, market is still staying around Aug 27’s floored position.

Uncertainty among investors keeps KSE 100-share index static

KARACHI: Trading activities were static at the Karachi stock market on Monday following prevalence of uncertainty among investors over funds to bailout the market despite a series of meetings between Securities and Exchange Commission of Pakistan (SECP) and the Karachi Stock Exchange (KSE).The KSE 100-share index remained unchanged as it closed at 9,187.10 points. The KSE 30 index and KMI 30 index also remained at 9,981.93 points and 11,224.18 points respectively.

The market turnover increased 81.97 percent and traded 0.146 million shares as compared to 0.081 million shares traded in the previous session. The overall market capitalisation remained unchanged at Rs 2.826 trillion. Out of 14 companies, two closed in the positive zone, nine in negative while three remained unchanged. Analysts said although there have been optimistic views of the experts but official statements are still missing and same is the case with the ‘unfreezing’. Rumours that the BoD of KSE will be meeting on the issue to reach a decision and that the directors are scheduled to meet the authorities seldom materialise, and despite the sensitivity of the issue, official statements regarding development and future action plan are not available. This era is creating uncertainty among investors.

Analysts further said that the reasons for static activities include investors concern over falling market sentiment, off-market transactions at 25 percent to 50 percent discount, foreign selling and lack of liquidity to bailout capital market from its current crises. Gharibwal Cement was the volume leader in the share market with 0.41 million shares as it closed at Rs 17.37 after opening at Rs 17.59 losing 22 paisas. National Assets traded 0.38 million shares as it closed at Rs 0.41 after opening at Rs 0.44 losing three paisas. Pak Com Leas traded 0.15 million shares as it closed at Rs 0.55 after opening at Rs 0.60 losing five paisas. Habib UDL Mod traded 0.13 million shares as it closed at Rs 3.07 after opening at Rs 3.06 making a financial gain of one paisa. No trading activity was observed in the futures market.

Karachi stocks remain unchanged

The Karachi stock market remained motionless on Wednesday as falling international markets on global crises and tight monetary policy were the source of continuing foreign disinterest in the local market, analysts said.The Karachi Stock Exchange (KSE) 100-share index remained unchanged for the third consecutive trading session by closing at 9,184.09 points. The KSE 30 index and KMI 30 index also remained at 9,981.93 points and 10,003.99 points respectively.

The market turnover gained 4.21 percent and traded 0.182 million shares as compared to 0.19 million shares traded in the previous session. The overall market capitalisation remained unchanged at Rs 2.826 trillion. Out of 13 companies, four closed in the positive zone, four in negative while five remained unchanged. Analysts at Aziz Fida Hussein and Company said while the preparations were underway to register a louder protest as reported by the media against the extended and unjustified freezing, the unconfirmed news was the chances of a regular market from December 1 with optimistic views regarding the availability of ‘market support fund’ and ‘special session’ before regular opening, the news however failed to get an official backing.Chances that the likely development is being withheld till materialisation could not be ruled out even if the news is only to keep the sensation of the bourses alive. The statement did force the likely protesters to review their date of protest against the closure beyond December 1.

With the passing days number of participants in the off market transactions have increased, as even those who had some reservations regarding the legality of the off market transactions have joined the band wagon as evident from the underlines through NCCPL system.Analyst at Shahzad Chamdia Securities said dull activity persisted, as the market participants remained concerned over the expected bailout plan of Rs 50 billion.National Assets was the volume leader in the share market with 0.107 million shares as it closed at 42 paisas after opening at 44 paisas losing two paisas. Gharibwal Cement traded 0.34 million shares as it closed at Rs 17 after opening at Rs 16.38 making a financial gain of 62 paisas. Mukhtar Textile traded 0.17 million shares as it closed at 53 paisas after opening at 55 paisas losing two paisas. Habib -ADM Ltd traded 0.11 million shares as it closed at Rs 9.70 after opening at Rs 9.69 gaining one paisa. UDL Mod traded 0.5 million shares as it closed at Rs 3.06 after opening at Rs 3.25 losing 19 paisas.No trading activity was observed in the futures turnover.

KSE exhibits worst performance

The floored Karachi bourse exhibited the worst performance on Tuesday, as it witnessed trade of zero shares in the first 180 minutes of the day session. Therefore, historically low turnover in as many as seven active companies were the other two new records of history at KSE.Moreover, foreign portfolio investors disinvested huge and over $2 million in a single session at local bourses, according to NCCPL data.KSE All-share Index fractionally fall by 0.18 point and ended at 6,639.18 points.

Earlier, it moved either side of the fence by 0.20 point during the session.While, all the other three parallel running indices remained stagnant, as KSE 100-share Index at 9,184.09 points; KSE 30-share Index at 9,981.93 points; and KMI 30-share Index at 11,224.18 points, throughout session.Dealers confirmed that investors have traded zero shares till 12noon in the market since the pre-opening of the day session at 9:30am, which is a new record.Therefore, market generated a turnover of mere 19,660 shares in second half of the session, which was all time low. Amid, out of total seven active securities on board, three fell in red against two settled in green. Remaining two shares closed with no change in their prices.In line with this, the overall market further fell by Rs484 million and stands at Rs2.826 trillion.Analysts were of the view that the end Friends of Pakistan meet in Abu Dhabi without announcing any immediate relief to the local economy created doubts in investors mind over quick recovery in the economy.

Therefore, investors went on far distance from market and wait for any positive announcements. S. Kashif Mustafa at ECL Research said that Pakistan’s economic situation has become precarious, as Friends of Pakistan seem reluctant to support the country due to the weak economic conditions.However, lending from IMF will instigate hope for the forum to extend its support through investments in the country by accepting the comprehensive road map to put Pakistan back on its feet, shaken by the financial crisis, he further said and added, on the equity market front investors were advised to stay sidelined and watch-out for plunges after the removal of the flooring.

Ahsan Mehanti at Shahzad Chamdia Securities said that there was no official update on Rs50 billion market bail-out package, which the government has pledged to introduce in market about a month back. Another strange situation that has developed over the night was pledging of investors’ shares with banks by some brokerage houses to acquire bank financing against. This situation has again earned bad name for stocks market brokers, analysts added.Sindh High Court, therefore, has issued stay order against pledging clients’ shares by brokers and availing bank financing against that.Highest volumes were witnessed in Southern Electric at nine thousand closing at Rs3.62 with a gain of one paisa, followed by Gharibwal Cement at six thousand closing at Rs16.38 with a loss of 28 paisa, Habib-ADM at three thousand closing at Rs9.69 with a loss of 30 paisa, Mohammad Farooq at five hundred closing at Rs2 with a loss of one paisa and Hayder Const at five hundred closing at Rs1.05 with a gain of two paisa.

SHC vacates stay order in KSE, PBA petitions against CCP

A two-member bench of Sindh High Court on Monday vacated the stay order in two writ petitions filed by Karachi Stock Exchange and Pakistan Banking Association saying the Competition Commission of Pakistan (CCP) is now free to pass final order.The bench heard the petition of KSE (Guarantee) Ltd. against the CCP. Khalid Anwar, senior advocate supreme court consented to vacation of the stay order granted earlier by the SHC. “CCP is now free to proceed and to pass a final order on the show cause notice issued to KSE for its alleged abuse of dominant position in the relevant market thereby violating the Competition Ordinance, 2007,” high court order said.

The writ petition filed by Pakistan Banks Association (PBA) and its member Banks was also taken up for hearing by the same bench. PBA and its member Banks have been directed to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. In KSE case: CCP had initiated proceedings on a complaint lodged by Islamabad Stock Exchange (Guarantee) Ltd. (ISE) under section 30 of the Competition Ordinance 2007 for alleged contravention of section 3 of the Ordinance, which relates to abuse of dominant position. KSE, instead of appearing before CCP and to defend its position, filed a writ petition, before the Sindh High Court inter alia challenging the jurisdiction of CCP and obtained a stay order restraining the commission from final adjudication in the matter. ISE being aggrieved by the stay order of the Sindh High Court preferred an appeal before the supreme court for vacation of Sindh High Court’s stay order, and in terms of the order passed by the supreme court on November 13, 2008, Counsel of KSE consented to the vacation of the stay order earlier passed by the Sindh High Court.

This has enabled the CCP to proceed with the show cause notice and to issue final orders. In the banking case: The division bench of the Sindh High Court on Monday heard the matter and now PBA and its member Banks are required to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. Earlier, CCP, after due process and affording the Banks and PBA a full hearing, passed an order against them imposing a cumulative penalty amounting to Rs 205 million. The Banks and the PBA, instead of filing an appeal before the appellate bench of CCP, filed a writ petition in the Sindh High Court challenging, inter alia, the order passed by CCP.

The Sindh High Court granted an interim injunction against CCP thereby restraining it from taking any adverse action against the PBA and its member banks. CCP being aggrieved by the stay order of Singh High Court preferred an appeal before the supreme court keeping in view the availability of efficacious remedy to the banks and the PBA under Sections 41 and 42 of the Competition Ordinance, 2007, and the fact that the stay order had been issued without giving notice to CCP. The interim injunction was vacated by the Supreme Court with directions to the Sindh High Court to hear the case on day to day basis. As a result of proceedings in the Singh High Court, PBA and its member banks are now required to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. CCP after issuance of the show cause notice passed a final order thereby imposing penalty on PBA and its member banks for acting in a cartel like manner in violation of the Competition Ordinance, 2007.

Stock market again on flat mode with meek volume

Business resumed on the last day of business week Friday in Karachi Stock Exchange (KSE) with some activity but remained limited, flat and dry. Though Thursday business registered a change in KSE-100 which gained 0.95 points but Friday business witnessed no change and it was closed at 9,184.09. It seemed that liquidity shortage and floor mechanism is still haunting the already flat and dull market as investors and brokers preferred to sit aside. National Assets was the scrip which led the market volumewise.Total 44 scrips traded in the bourse in which five companies recorded gains while the same quantity of five scrips sustained losses and 14 remained unchanged. The turnover at the local bourse witnessed downward trend as total trading volume remained at 57,920 shares as compared to 66,600 shares on Thursday.The highest trading on Friday was seen in the scrip of National Assets which gained Re 0.08 closed at Re 0.50 with volume of 14,500 shares followed by Mukhtar Textile which also gained a meagre value of Re 0.01 closed at Re 0.54 with volume of 11,000 shares.Nimir Resin remained unchanged closed at Rs 5.05 with volume of 10,000 shares. Gharibwal Cement which shed its value to Re 0.37 on Thursday business again shed its value to Re 0.51 closed at Rs 16.11 with volume of 4,000 shares while Haydery Construction also witnessed decrease value of Re 0.02 closed at Rs 1.03 with volume of 5,500 shares.

Tri Star Power and NIB Bank remained unchanged closed at Rs 1.64 and Rs 8.45 with volume of 3,000 and 1,000 shares respectively.Whereas Mirza Sugar and Habib ADM gained value to Re 0.04 and Re 0.52 closed at Rs 1.85 and Rs 10.20 respectively with volumes of 1,000 each share. Esat West Life and PSO also remained unchanged closed at Rs 7.00 and Rs 267.49 respectively with volumes of 1,000 shares. Sitara Energy lost its value of Re 0.61 closed at Rs 19.75 with volume of 500 shares. Silver Star Insurance, Trust Modaraba, National Foods and JA textile remained unchanged closed at Rs 14.70, Rs 1.35, Rs 66.12 and Rs 8.20 respectively with volumes of 500 each shares.However, UDL Mod remained unlucky which shed its value of Re 0.25 closed at Rs 3.05 with volume of 500 shares. Crescent Sugar, however, gained Rs 1.00 closed at Rs 9.55 with volume of 500 shares. Redco Tex and Bank Al-Habib remained unchanged closed at Rs 1.00 and Rs 34.14 with volumes of 500 and 300 shares respectively.While Pak Datacom witness declined to Rs 2.00 closed at Rs 46.00 with volume of 200 shares. Rest of the scrips like Netsol Technol, Habib Metro Bank and Uniliver Pakistan remained unchanged traded less than 200 shares.Meanwhile, the KSE-30 index remained unchanged and closed at 9981.93 points and KMI-30 index with no change closed at 11224.18 points.While, Lahore Stock market witnessed upward trend as LSE-25 index gained its value to 5.39 points and closed at 2825.36 points.Total turn over however remained at 500 shares. In all the 83 companies transacted on the day, no scrip could move up and no scrip moved down and rates of all other scrips remained unchanged. PIAA remained unchanged closed at Rs 3.51 with volume of 500 shares.

KSE card purchased for Rs 55 million at auction

One of the cards of two Karachi Stock Exchange (KSE) members, whose brokerage houses defaulted, is auctioned at Rs 55 million on Thursday.According to a director of board of exchange, MMM a commodity, which mainly operates in rice trading secured the card by offering the highest bid among the four bidders.KSE invited the bids from individuals and eligible corporate bodies, financial institutions/banks (local & foreign) couple of days back for sale of cards of Sikandr Ismail Bagsara and Ismail Abdul Shakoor, who defaulted on failure to honour their debt obligations.

The bids were invited after the KSE Board endorsed the Nov 6 decision of the National Clearing Company of Pakistan (NCCPL) which had declared Bagasra Securities (Pvt) Limited, and Ismail Abdul Shakoor Securities (Pvt.) Limited, both Corporate members of the KSE, as "defaulter" under regulations.According to the NCCPL, the final loss remaining unsettled by Bagasra stood at Rs 51.4 million as on the close of business on Nov 6. The final loss remaining unpaid by Shakoor at the end of the specified time amounted to Rs 5.4 million after the recovery of substantial sum of Rs 8.3 million through the selling out of retrieved shares.Sources said that the second card could also be auctioned in next two to three days and it could fetch more or less the same amount.

The market participants also anticipated the amount in the range of Rs 50 to Rs 70 million.The value of membership card of the KSE also plunged with the steep decline in the stock market since April this year.The value of the membership card also shoot up to over Rs 130 million in the heydays of the market and dropped massively with the current turmoil. Sources said that the default does not seems to be limited with these two members as more members are on the brink of this situation if the much-talked market stabilization was not activated soon.

The total strength of KSE members is 200."The financial situation of five to six members is particularly precarious because they are badly trapped in CFS market and are unable to meet their obligations in the current situation," sources said.Meanwhile, the meeting between KSE board and SECP remained inconclusive on the decision of floor removal.