KARACHI, April 16: Stocks on Wednesday staged a robust rally as leading investors were back in the market after having an overview of their portfolios but unlike the previous sessions the buying was terribly broad-based. The index recovered 43.55 points at 2,944.14, with a record number of 403 shares having participated in the day’s trading.
Apart from perceptions of higher interim profits by some of the leading companies whose board meetings are due next week, the fresh cut of 7 to 12 per cent in petroleum prices for the second consecutive fortnight was another supporting factor as investor think it could lower the industrial production costs and will make export more competitive.
However, as feared by some brokers, the share values of both the PSO and Shell Pakistan posted smart gains ranging from Rs3.60 to Rs4.95 dispelling fears of fall in earnings as lower prices could well mean larger sales.
The KSE 100-share index stood firm above the barrier of 2,900 points at 2,944.14, indicating its onward march to the coveted next chart point of 3,000. The net rise was 43.55 points. The market capitalization soared to Rs640.422bn, up Rs9.760bn.
The Tuesday’s downward revision of POL prices could work as a double edged weapon on the stock market, analysts said adding on the one hand it could have an adverse impact on the profits of oil marketing companies and cut industrial production costs on the other.
The total decline in POL prices over the last month comes to about 20 per cent, which in turn could have a significant negative impact on the earnings of oil marketing giants, notably PSO and Shell Pakistan.
But some others claim the downward adjustment in POL prices effected in line with the falling world rates has just clipped in part the successive increase witnessed over the last quarter and may not have any significant impact on the profits of oil marketing companies.
“The broad-based buying reflects that investors have welcomed it and ventured to go for other stocks having potential to rise and did not confine themselves to a dozen selected shares,” says a leading analyst adding “it signals a major change in the new portfolio building by the investors.”
Meanwhile, tussle for the PSO share is on as the postponement of its sell-off bidding date has provided the badly needed leverage to bears tilt the price balance in their favour and they succeeded in part during the post-delay sessions.
“Bulls including some big ones, having an enormous financial backup facilities were not that easy to be outwitted,” analysts said. “They fought back and absorbed bulk of selling and judiciously maintained the price at a sustainable level.”
With war in Iraq almost over and board meetings of some of the leading companies due next week, analysts predict the continuation of the current bull-run, stray selling here and there notwithstanding.
Leading gainers were led by Packages, Unilever Pakistan, IGI Insurance, Pakistan Reinsurance Co and Arif Habib Securities, up Rs6.50 to Rs18.10. Other good gainers included Sapphire Textiles, Mari Gas, Pakistan Oilfields, Pakistan Refinery, Treet Corporation, Gillette Pakistan, National Foods, Nestle MilkPak, Bata Pakistan, HinoPak Motors, Dawood Hercules, Abbott Lab, Security Papers and Packages, up by Rs3 to Rs6.50.
Prominent losers included Faisal Spinning, Allawasaya Textiles, Al-Ghazi Tractors and Gatron Industries, off Rs2 to Rs5.30.
Traded volume, however, did not keep pace with the buying spree and fell further to 162m shares as compared to 221m shares a day earlier, although gainers extended their lead over the losers at 280 to 80, with 43 shares holding on to the last levels.
KESC topped the list of actives, up 45 paisa at Rs5.70 on 23m shares followed by PTCL, higher 25 paisa at Rs25.55 on 19m shares, Hub-Power, up 30 paisa at Rs35.90 on 17m shares, Sui Northern Gas, higher 45 paisa at Rs26.35 on 10m shares and PIAC “A”, easy five paisa at Rs10.75 also on 10m shares.
They were followed by Nishat Mills, up Rs1.50 on 7m shares, National Bank, firm by 45 paisa on 6m shares, Pak PTA, steady 15 paisa ahead of its board meeting on 5m shares, Engro Chemical, higher Rs1.45 on 4m shares and FFC-Jordan Fertilizer up 10 paisa on 4.779m shares.
FORWARD COUNTER: Firm conditions were also witnessed on this counter where PSO came in for strong support and rose Rs3.70 at Rs213.80 on 9m shares followed by Hub-Power, firm by 20 paisa at Rs35.90 on 5m shares and PTCL, steady 15 paisa at Rs25.55 on 3m shares.
Among the other gainers, Nishat Mills and Engro Chemical were notable, up Rs1.50 and Rs1.30 at Rs21.50 and Rs83.70 respectively. Sui Northern rose by 40 paisa at Rs26.40 on 1.631m shares, while FFC-Jordan Fertilizer was traded higher by 10 paisa at Rs12.40 on 1.193m shares.
DEFAULTER COMPANIES: Brisk trading was also witnessed on this counter as shares of 19 companies came in for active bouts of buying and selling under the lead of Suzuki Motorcyles, up another 85 paisa at Rs15.25 on 0.539m shares followed by Pak Ghee, firm by 20 paisa at Rs0.80 on 21,500 shares and Pangrio Sugar, higher 70 paisa at Rs11.90 on 7,000 shares.
