KARACHI, April 24: Stocks on Thursday failed to sustain the overnight rally as bears moved in and indulged in profit-selling at the inflated levels intercepting the market’s upward drive.
Apart from the absence of leading institutional traders reports of below market expectations third quarter earnings of some of the leading companies including Hub-Power and the consequent omission of widely rumoured interim dividends also worked against the underlying sentiment.
But Siemens Pakistan was an exception, whose directors announced a cash interim dividend at the rate of 130 per cent on net sales of Rs2.686 billion. Its share appreciated by Rs14 at Rs309 on 2,800 shares.
The KSE 100-share index failed to sustain even a part of the overnight gain and fell 58.30 points or 2.02 per cent at 2,834.13 as compared to 2,892.43 a day earlier, reflecting the weakness of leading base shares including PTCL and Hub-Power.
There could be several reasons behind the market’s U-turn from the overnight highs but the chief reason appears to be the absence of leading institutional traders who kept to the sidelines most of the time leaving it at the mercy of jobbers and day traders.
“Their appetite for chain of stocks may not have reached the saturation point, they certainly have some rethinking on the central bank proposal to put a ceiling on their equity investment”, most analysts believe “they want to be pretty sure that their long-term investment in shares are not affected if the central bank opt for it and played safe”.
Some others claim the market was in a highly overbought position owing to its sustained run-up above the 2,900 index level and is passing through a technical correction and will resume its upward drive having consolidated its statistical position.
The after tax profit of Rs4.5 billion announced at the board meeting of Hub-Power on Wednesday for the third quarter was not that bad as the market took it, brokers said adding “what seems to caused selling in its share the passing over of an interim dividend”.
The working results of another leading MNCs, Shell Pakistan were well above the general perceptions but failed to rescue the market from the mounting selling offers from the bears.
The interim results from a dozen other leading companies are due before the end of the month but investors seem to be in no mood to make fresh commitments anticipating negative fall-out of the current political tensions between the government and the opposition on the LFO.
Although the fall was widespread and covered the entire list, some of the leading shares managed to score good gains, shortage of floating stock not a strong buying being the main reason behind the run-up.
Grays of Cambridge Glaxo-SKF, Premier Sugar, Aventis, Exide Pakistan, Cherat Papers, EFU Life, Lawrencepur Woollen, Dreamworld, Wyeth Pakistan and Parke-Davis were leading among them, up Rs2 to Rs43.25. Others rose fractionally.
Losers dominated the list, leading among them being Dawood Hercules, IGI Insurance, PSO, Pakistan Refinery and Unilever Pakistan, off Rs3.95 to Rs29. They were followed by Shell Pakistan, National Refinery, Crescent Steel, Fauji Fertilizer, 4th and 13th ICPs, lower by Rs2 to Rs3.45.
Trading volume fell to 168m shares as losers forced a strong lead over the gainers at 214 to 83, with 45 shares holding on to the last levels.
The active list was topped by PTCL, off 85 paisa at Rs23.95 on 29m shares followed by Hub-Power, also lower by the same amount at Rs34.05 on 26m shares, PIAC (A), firm 15 paisa at Rs11.20 on 19m shares, Pak PTA, off 40 paisa at Rs8.70 on 14m shares, Sui Northern Gas, off 70 paisa at Rs25.75 on 11m shares, PSO, down Rs4.90 at Rs201.50 on 11m shares and MCB, lower Rs1.65 at Rs31.40 on 4m shares.
Other actives were led by FFC-Jordan Fertilizer, lower 85 paisa on 9m shares on reports of lower sales, KESC, up 10 paisa on 8m shares and Dewan Motors, easy Rs40 paisa on 3m shares.
FORWARD COUNTER: Speculative issues on the forward counter also came in for active selling and generally fell for both the settlements under the lead of PSO, off Rs4.80 at Rs201.50 on 7m shares. MCB, Engro Chemical and Fauji Fertilizer, off Rs1.45, Rs1.75 and Rs2.60 at Rs31.50, Rs77.25 and Rs79 respectively.
DEFAULTER COMPANIES: Trading activity on this counter was relatively slow as shares of only 13 companies came in for trading under the lead of Suzuki Motorcycles, off 75 paisa at Rs12 on 35,000 shares followed by Crescent Board, up by 25 paisa at Rs4 on 10,000 shares and Medi Glass, firm 10 paisa at Rs0.80 on 5,000 shares.
