January 25, 2003	Saturday	Ziqa’ad 21, 1423

KARACHI, Jan 24: Stocks on Friday resisted larger decline as investors covered positions in most of the blue chips at the lower levels amid strong presence of the financial institutions and predictions of a sustained recovery. The KSE index closed lower by 8.04 points at 2,609.45.

The opening was, however, terribly nervous as till the close of the morning session it has tested the low 2,486 being down at one stage by 131 points.

But at the fag-end of the afternoon session bulls entered the market and made extensive short-covering at the lower levels enabling the index to finish the week just with modest fall of 8.04 points.

In market parlance, the weekend recovery generally paves the way for a big turnaround when the trading resumes next week if there is no bad news in the intervening official closures, dealers said.

However, during the last four sessions, investors lost about Rs.72bn in the market capitalization in the form of capital gains after the KSE 100-share index fell 345 points or 11.25 per cent at 2,609.45.

The closure was preceded by highly erratic either-way movements by the index as both bulls led by the institutional traders and bears tried to tilt the balance in their respective favour. At one stage it was down by 131 points but the afternoon session witnessed the return of the bulls.

The recovery was, however, not that easy as bulls have to fight pitched battles including battle of nerves to outwit bears and that too at the weekend session, which generally prompts fresh selling from the weakholders.

“The last four sessions’ massive sell-off may now be overdone as basic market factors have taken the floor at the attractive lower levels, notably in the pivotals,” analysts said.

“Thursday’s unloadings were uncalled for and reflected psychological perception rather than market’s real worries,” some others said. “The early rise was quite in line with the basic fundamentals but a section of bears voted it out.”

Apart from short-covering at the dips, the other aiding factors was expectations of higher dividend by some of the leading companies including Engro Chemical, Fauji Fertilizer and some others whose board meetings are due next week.

PSO, which came out with higher post-tax profit of Rs2 billion and interim dividend of 60 per cent fell further from the pre-dividend level but heavy buying in Engro Chemical and Fauji fertilizer, which ended recovered by Rs4.30 and Rs5.05 respectively at Rs89 and Rs81.25 led the market recovery.

Other good gainers were led by 25th ICP, Gadoon Textiles, Shahtaj Sugar and Clariant Pakistan, up one rupee to Rs1.45.

Leading losers were again led by the overvalued energy shares, which showed fresh decline ranging from Rs2.25 to Rs5.05, largest fall of Rs9.20, 9.30, and 19.90 being in PSO, Pakistan Oilfields and Shell Pakistan respectively. Other major losers included Javed Omer, HinoPak Motors, Packages, Unilever Pakistan, BOC Pakistan and Siemens Pakistan, off by Rs3.50 to Rs30.50.

Trading volume fell to 301m shares from the previous 385m shares as gainers cut short the lead of losers sharply lower.

Hub-Power came in for strong support and rose by 95 paisa at Rs36.35 on 118m shares, PTCL, up 65 paisa at Rs23.40 on 55m shares, FFC-Jordan Fertilizer, easy 15 paisa at Rs10.65 on 16m shares, Sui Northern Gas, off 60 paisa at Rs22.60 on 16m shares and PSO, off Rs9.20 at Rs197.45 on 11m shares.

Other actives were led by Engro Chemical, higher by Rs4.30 on 10m shares, Fauji Fertilizer, up Rs5.05 on 9m shares, National Bank, firm by 60 paisa on 8m shares, KESC, steady by 15 paisa also on 8m shares and Pak PTA, up 15 paisa on 7m shares.

FORWARD COUNTER: Hub-Power came in for strong covering purchases at the lower level and was marked up by Rs1.20 at Rs36.70 on 30m shares followed by PTCL, higher 20 paisa at Rs22.90 on 15m shares and PSO, sharply lower by Rs9.60 at Rs198 on 4m shares. ICI Pakistan, which fell by Rs2.60 at Rs50.15 was another prominent loser.

Both Engro Chemical and Fauji Fertilizer were leading among the gainers, up by Rs2.05 and Rs5.70 respectively amid active trading.

DEFAULTER COMPANIES: Trading on this counter was relatively slow in the absence of investors, Custodian Modaraba led the list of actives, easy 15 paisa at Rs.3.85 on 34,500 shares followed by Suzuki Motorcycles, off 90 paisa at Rs6.80 on 8,000 shares and Service Fabrics, lower 25 paisa at Rs0.35 on 6,000 shares.