KARACHI, April 23: Stocks on Wednesday swung to the plus column as leading investors covered positions at the lower levels after the central bank clarifies that it is not limiting bank investment in the share business as was widely rumoured a day earlier that triggered panic selling.
The KSE 100-share index recouped in part the previous loss of 105 point at 2,892.43, up 30.11 points, thanks to smart rallies staged by the leading base shares. It had plunged by 3.5 per cent on Tuesday after reports of an expected arrival of the UN chemical weapons inspection team and rumours of the State Bank curbs on bank investment in shares.
The other stimulating factor was the prime minister’s invitation to the opposition parties to sort out the issue of the LFO and the latter’s acceptance. Hopes that something positive could emerge from the talks leading to easing of current tension between the contenders of power also aided the sentiment.
“To put a ceiling on bank investment in equities is just a proposal,” the central bank quashing the market rumours said, adding “even it imposed banks will be given a year’s time to adjust their positions in the share market.”
The SBP proposal apparently aims at restoring sanity to the share business and lining up more funds for the industry and the private sector, a major shift from trading to industrialization.
Owing to massive presence of financial institutions in the share market in the backdrop of falling interest rates, the KSE index as well as the total market capitalization has set new record, which analysts said did not confirm to the size of the economy and some of the basic fundamentals.
“I don’t think now from onward bank participation in the share business may not be that aggressive as it has been since January,” fears an analysts and if happens “the index target of 3,000 may well prove elusive.”
But some others said Indian offer of talks with Pakistan sometime in June, softening of rigid positions taken by the opposition and the government on the issue of LFO and higher corporate earnings would continue to inspire buying in most of the second-liners as was happening during the last couple of sessions.
Energy, chemical, auto and some of the leading secondary issues came in for active short-covering and led the market advance amid active trading.
Plus signs again dominated the list, major gainers being Millat Tractors, PSO, Al-Ghazi Tractors, Shell Gas, and Merit Packaging, up Rs3 to Rs6, while star performers were Grays of Cambridge, Unilever Pakistan and Parke-Davis, which posted gains ranging from Rs10 to Rs40.
Rupali Polyester, Thal Jute, International Industries, Atlas Honda, Ghandhara Diesel, Dawood Hercules, Pakistan Gum Chemicals, Packages and Security Papers also rose by Rs2 to Rs2.90.
Losers were led by Gillette Pakistan, 13th ICP, Faisal Spinning, Gatron Industries, Lakson Tobacco, Ghani Glass, Pakistan Refinery and Treet Corporation off Rs1.60 to Rs10.15.
Trade volume fell to 207m shares from the previous 256m shares but gainers forced a strong lead over the losers at 164 to 116, with 50 shares holding on to the last levels.
Pak PTA, one of the leading undervalued shares, led the list of most actives on strong buying followed by reports of higher earning and rose by Rs1.35 at Rs9.10 on 48.029m shares followed by PTCL, firm by five paisa at Rs24.80 on 33.054m shares, Hub-Power, up 30 paisa at Rs34.90 on 30m shares, PIAC (A), higher one rupee at Rs11.05 on 16m shares and Sui Northern Gas, unchanged at Rs26.45 on 15m shares.
PSO followed them, higher by Rs3.25 on 12m shares, Dewan Motors, up 60 paisa on 6m shares, D.G. Khan Cement, steady five paisa on 5m shares, FFC-Jordan Fertiliser, up 20 paisa on 4m shares and Southern Electric, firm by 10 paisa also on 4m shares.
FORWARD COUNTER: Ative trading was also witnessed on the cleared list where all the leading shares finished modestly higher for both the settlements under the lead of PSO, up Rs2.30 at Rs206.30 on 7m shares followed by Hub-Power, higher 30 paisa at Rs34.90 also on 7m shares, PTCL, firm three paisa at Rs24.75 on 5m shares.
Pak PTA also came in for active buying at the lower level ahead of its board meeting, up Rs1.06 at Rs8.91 on 4m shares and Sui Northern Gas, unchanged at Rs26.35 on 2m shares.
DEFAULTER COMPANIES: Shares of over a dozen companies came in for alternate bouts of buying and selling, the most active among them being Suzuki Motorcycle up 35 paisa at Rs12.75 on 75,000 shares. It has been in strong demand ahead of its board meeting and its possible shifting from the defaulters’ list to the ready counter.
Quice Foods followed them, unchanged at Rs1.25 on 17,500 shares and Mukhtar Textiles, also static at Rs1.25 on 4,500 shares.
