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HBL’s share price falls over Rs 15 in a day

* Analysts expect further decline in coming days
* Institutional support needed to halt the downfall

By Tanveer Ahmed

KARACHI: Major fall of over Rs 15 in the share prices of Habib Bank Limited (HBL) was seen on the first day of its trading at the Karachi stock market and analysts anticipate further decline in the coming days.

“Masses hold the shares of HBL, which they received when Initial Public Offering (IPO) of its shares was offered in July this year, so they seem in a mood to sell their shares at the earliest to make quick gains,” analysts said citing the reasons for the sharp decline in the shares of HBL.

The local bourse states that it had approved the application for formal listing and quotation of HBL’s shares and trading in its shares would begin from September 24 (Monday) and all transactions taking place in respect of the HBL would be settled on T+2 settlement basis. The settlement date will be September 26.

Lower lock was applied on Monday when the share price of HBL fell to Rs 289.75 from Rs 305 to avoid free fall of the shares due to selling pressure. The trading volume was also thin as only 160,400 of HBL shares changed hands during the whole trade. “There is strong possibility of further fall in the shares of HBL as the masses cannot be long-term investors as they want small but quick profits from this deal,” said Khurram Schehzad, Analyst at Invescap, adding that its shares could even land below the offered price of Rs 235 in the coming sessions. About institutional buying to prevent any further fall in the share price of bank, the analyst said it could not be ruled out, as enough liquidity is present in the market, which could be used for this purpose.

A local investor told Daily Times that a lot of people, who won the shares at the ballot, but have no knowledge of stock trading, had approached him to sell their shares.

“They are least interested in keeping the shares for long-term and want to sell in order to get immediate returns of their investment,” he pointed out.

The IPO of shares of HBL was over-subscribed by Rs 6.40 billion or 52 percent with the bank receiving Rs 18.60 billion as against the public offering of Rs 12.20 billion. Public’s response to the IPO was overwhelming because of a huge number of applications received. Each applicant who won at the ballot was entitled to no more than 100 shares.

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