KARACHI, July 14: Trading on the massively battered share market on Monday resumed under the new funding regime, CFS Mk-2, ensuring enormous liquidity for the prospective investors on a bearish note owing to worries over the sensitive external fronts, although it ensured a safe exit route to the trapped leveraged borrowers sans any risk management.

The KSE 100-share index was off 518.51 points at 11,177.31, eroding Rs155 billion from the market capital at Rs3,479 billion.

However, the general consensus among the analysts was that the market is expected to be back on the rails after investors got a brief breather from the non-market worries, including political uncertainty, security risks and the US pressure to do more in the tribal areas.

An idea of investors’ worries may well be had from the fact that everyone appears to be in search of safe havens after shedding their extra load as was reflected by a fresh massive single-session fall of 518.51 points or 4.43 per cent at 11,177.31. The KSE 30-share index suffered a bigger decline of 632.96 points at 12,772.39.

However, it was not a single-session highest fall as it had dropped by 696.25 points on Dec 27, 2007 on panic selling triggered by the assassination of Benazir Bhutto.

The new funding regime did provide safe exit for the leveraged investors with no risk management issues, but investors were not inclined to go for fresh investment even at the attractively lower rates owing to prevailing law and order situation, weak rupee and slow down in the economy, analysts said. Under the CFS Mark-2 funding system, investors will have an access to Rs85 billion and up to Rs100 billion on ten per cent margin, which became effective from Monday (July 14) on the KSE. The new system also ensures transparency in the share transactions as demanded by the foreign investors. The lower and higher circuit-breakers were also restored to the previous levels of five and seven per cent.

“External political factors may not allow the return of the bull market soon but the new funding regime would put the market back on the track after peace return to Fata, law and order situation improves, and the rupee is back to its sustainable level against the dollar,” leading analyst Hasnain Asghar Ali predicts.

Analyst Ahsan Mehanti holds the same view and says investors are staying out of the market owing to the political uncertainty and until peace returns in the country, many may not put money in stocks. The market’s decline was led by the overvalued oil sector, which came in for active selling as investors found safe exits after the restoration of previous lower and upper locks.

OGDC, Pakistan Petroleum, PSO, Arif Habib Securities and some others suffered massive decline on persistent selling but no willing buyers at the fall.

Biggest losers were led by Unilever Pakistan and Nestle Pakistan, off by Rs116.22 and 81.13, followed by Habib Bank, National Bank, MCB Bank, JS & Co, Adamjee Insurance, EFU General and Life, Attock Refinery, National Refinery, Attock Petroleum, PSO, Shell Pakistan, Pakistan Oilfields, Pakistan Petroleum, Engro Chemical, Ferozsons lab, Clariant Pakistan, Packages, Dawood Hercules, and Siemens Pakistan, which were marked down by Rs10.74 to 55.80 in that order.

Some of the second-liners managed to finish higher by Rs3.70 and 3.62 under the lead of Blessed Textiles and United Brands, followed by Pak Elektron, ICI Pakistan, Singer Pakistan, and Masood Textiles, up by Rs1.15 to 2.19.

Trading volume rose to about 70m shares from the previous 21m share as most of the trapped investors found exit after the revision of upper and lower circuit-breakers. But gainers trailed far behind the losers at 25 to 222, with nine holding on to the last levels.

NIB Bank led the list of actives, lower by 92 paisa at Rs9.68 on 9m shares followed by OGDC, sharply lower by Rs5.70 at Rs110.45 on 6m shares, Arif Habib Securities, off Rs7.55 at Rs143.49 on 4m shares, Pakistan Petroleum, sharply lower by Rs1.23 at Rs213,54 on 3m shares, Arif Habib Bank, easy by one rupee at Rs16.57 also on 3m shares and Askari Bank, off Rs1.89 at Rs35.97 on 3m shares.

Other actives were led by Zeal-Pak Cement, easy by 76 paisa at Rs1.80 on 3m shares followed by Fauji Cement, lower by 54 paisa at Rs8.75 on also on 3m shares, Norrie Textiles, up 23 paisa at Rs2.20 on 3m shares and TRG Pakistan, off one rupee at Rs4.75 on 2m shares.

FORWARD COUNTER: Engro Chemical, off by Rs1.28 at Rs24.70 on 3m shares, followed by OGDC, sharply lower by Rs5.84 at Rs111.04 on 1m shares and NIB Bank, lower by one rupee at Rs9.91 on 0.906m shares.