KARACHI, Nov 21: Leading shares on the Karachi Stock Exchange on Wednesday came in for active support at the lower levels, aided partly by a good interim dividend by ICI Pakistan and partly to reports of a record rise in forex reserves, leading to a stable value of the rupee. The KSE 100-share index recovered 4.66 points at 1,358.73.

The announcement of an interim cash dividend at the rate of 20 per cent by ICI Pakistan toward the fag-end of the session generated a good bit of short-covering in it and some other blue chips, putting the market back on the rails.

The ICI Pakistan board, which met here on Wednesday, gave a pleasant surprise to even most well-informed brokers after declaring an interim dividend at the rate of 20 per cent. The announcement was welcomed as it came in the backdrop of a previous blank year and 60 per cent right shares in 1999.

“The Separation of Pakistan PTA from the principal company shows that ICI Pakistan is heading to attain the required financial viability and will soon resume its role of a market leader,” analysts at the W.E. Financial predict.

Continued losses in the PTA business after the withdrawal of a foreign joint venture partner a couple of years back has strained ICI Pakistan’s financial position but the interim dividend tells it is all set to regain its past glory, they add.

The news was well received in the market as was reflected by a smart rally of 55 paisa to close at Rs.45.30. During the last about two weeks it has risen to its recent peak level of Rs.50.00 apparently on an anticipatory buying ahead of the interim, they added.

Record rise in forex reserves to well over $4 billion and 45 per cent increase in remittance was another aiding factor, indicating the strength of the rupee and the confidence of those sending money through the formal channels.

“The strength of the local currency could well be an envy of the foreign investors as it ensures that the value of their dollar investment may not erode,” some leading stock analysts believe hoping a medium-term rally on the blue chip counters.

Stock analysts at the Finex Securities also hold the same view about the direction of the market as a record rise in forex reserves could prove an attractive bait for foreign investors in the coming weeks.

“With Afghan war losing relevance investors are having a second thought on the post-war economic realities and their likely impact on stock trading,” says floor broker, adding “the post-war scenario will be clear soon”.

Cement shares came in for renewed support under the lead of D.G. Khan Cement on reports that its management along with some others have converted their production process from furnace oil to coal, billed most cheaper. It could add significantly to their profits after cutting overhead costs.

Bulk of the support originated from the institutional traders, who have sold earlier followed by some jobbers, but floating stock in some major shares still remains unabsorbed. However, a part of it has been lifted at the dips.

Most of the price changes were fractional, reflecting the absence of big ones. However, among the major gainers, which rose by one rupee to Rs.2.50, Balochistan Wheels, PSO, Shell Pakistan, and Clover Pakistan were leading, up by one rupee to Rs.2.50, while all others rose by 50 to 75 paisa.

Losers were led by Colgate Pakistan, which came in for renewed selling followed by some adverse comments of sales, off another Rs.4.40 followed by Burewala Textiles, easy by Rs.1.50. Others suffered fall ranging from 50 to 95 paisa.

Trading volume shrank to 76 million shares from the previous 95 million shares as losers maintain a slight edge over the gainers at 68 to 65, out of 162 actives.

Hub-Power again topped the list of actives, firm by 10 paisa at Rs.1945 on 43m shares followed by PTCL, steady also by the same amount at Rs.17.65 on 15m shares, ICI Pakistan, up 55 paisa at Rs.45.30 on 5m shares, D.G. Khan Cement, unchanged at Rs.6.45 on 2m shares and Engro Chemical, higher 75 paisa at Rs.55.00 on 1.66m shares.

Sui Northern Gas followed them, up 10 paisa on 1.584m shares, MCB, unchanged on 1.432m shares, Fauji Fertiliser, lower five paisa on 0.987m shares and Lucky Cement, up 15 paisa on 0.915m shares.

FUTURE CONTRACTS: Forward counter also showed improved trend where five shares rose, while two fell with others holding on to th last levels.