KSE recovers 42 points on massive activity in Hubco
By Our Staff Reporter
KARACHI, Dec 24: A massive activity of 160m shares in Hub-Power on Tuesday lifted the market from the overnight lower levels, signalling that the technical correction is overdone and the index is poised to test new highs before the year is out. The KSE 100-share index recovered about 42 points at 2,551.27.
Stocks, therefore, shrugged off previous hesitancy and were back on the rails as bulls covered positions at the lower levels mostly in the pivotals and the fertiliser sector aided by reports of higher dividend.
“The bait of higher dividend yields don’t allow investors to sit on the sidelines even for a couple of sessions,” brokers said adding “the clear picture will emerge after the index breaches through the next chart point of 2,600.”
The year-end covering operations and portfolio adjustments here and there manifested themselves in a much bigger way than being speculated by the leading analysts, which in turn could lift the KSE 100-share index to next crucial level of 2,600 or beyond it.
The World Bank clean bill over the pace of economic recovery brought about by the reforms of the outgoing regime, needed push to privatization of some mega state-owned units after change of the official team and the perception that the prime minister is expected to get the vote of confidence with more votes inspired investors to enlarge their commitments on selected counters.
“But the villain of the speculative game appears to be an attractive bait of higher dividend yields, between 15 to 20 per cent,” some analysts said “no other instrument currently match this rate of return on investment.”
Technical reaction may follow here and there, “but we don’t think financial institutions will allow any major change in the current market outlook, they added.
Among the fertilizer shares both Fuaji Fertilizer and Engro Chemical remained in strong demand. The latter breached through its circuit breaker on Monday followed by rumours of hostile takeover bid. But later selling pushed its share value down.
Prominent gainers were led by Cherat Papers, Shell Pakistan, Pak Reinsurance Co, Siemens Pakistan and Unilever Pakistan, up by Rs.3.80 to 40.
Other good gainers were led by Dawood Cotton, Lawrencepur Woollen, Pakistan Refinery, Crescent Steel, Dawood Hercules, BOC Pakistan, National Foods, PSO and Shell Pakistan, which posted gains ranging from Rs.2.65 to 5.50.
Losers were led by Wah Noble Chemical, Sapphire Textiles, Sarhad Cigarette Premier Sugar and Wyeth Pakistan, which fell by Rs.1.25 to 10.
Trading volume soared to 420m shares from the previous 216m shares as advancing shares forced a strong lead over the losing ones at 235 to 94, with 55 shares holding on to the last levels.
Hub-Power topped the list of most actives, up Rs.1.45 at Rs.34.55 on 160m shares followed by PTCL, higher 35 paisa at Rs.23.30 on 68m shares, Sui Northern Gas, firm by 60 paisa at Rs.22.80 on 30m shares, National Bank, higher by Rs.1.10 at Rs.28.20 on 24m shares and ICI Pakistan, up Rs.2.45 at Rs.52.25 on 21m shares.
Other actives were led by PSO, higher by Rs.2.60 on 20m shares, FFC-Jordan Fertilizer, higher 30 paisa also on 20m shares, Engro Chemical, easy 75 paisa on 16m shares, Fauji Fertilizer, up Rs.1.75 on 9m shares and PIA ‘A’, up 35 paisa on 6m shares.
FORWARD COUNTER: Bulk of the speculative support was confined to Hub-Power, PSO, ICI Pakistan, Engro Chemical and Fauji Fertilizer, they finished with sharp gains in both the settlements amid large business.
Hub-Power rose by Rs.1.44 at Rs.34.50 on 21m shares, PTCL, up 30 paisa at Rs.23.25 on 12m shares and PSO, higher by Rs.2.10 at Rs.191.30 on 6m shares FFC-Jordan and Sui Northern Gas were also traded higher amid active business in the ruling December contracts. Forward business in the January settlements was relatively modest.
DEFAULTER COMPANIES: Service Fabrics again came in for active support and rose 20 paisa at Re.1 on 78,000 shares followed by Crescent Board, higher 50 paisa at Rs.4.50 on 14,500 shares and Metropolitan Steel, up Rs.1.50 at Rs.13.75 on 14,000 shares. Others were traded modestly.
DIVIDEND: Kohinoor Textiles, cash 5 per cent, Hajra Textiles 15 per cent, Crescent Textiles 20 per cent, Shahtaj Textiles 32.5 per cent, Ishaq Textiles 12.5 per cent and Noon Sugar Mills 60 per cent.
