May 21, 2003	Wednesday	Rabi-ul-Awwal 18,1424

KARACHI, May 20: Stocks on Tuesday fell across a broad front on snap selling triggered by conflicting reports about the outcome of talks between the government and the opposition teams on some clauses of the Legal Framework Order (LFO), seeking supremacy of the parliament. The KSE 100-share index shed 25.51 points to close below the crucial level of 3,000 at 2,979.76.

The perception that the prime minister’s presence at the KSE corporate award giving ceremony for the top 25 companies later in the evening will boost stock trading failed to find favour with both the institutional traders and the retailers as was reflected by hasty selling.

“The reaction appears to be psychological rather than logical as the basic fundamentals are still positive,” says a leading broker. “Bears seem to have cashed in on the available profits after the news of disagreement on LFO.”

Reports that talks between the officials and the opposition teams ended on Monday without a consensus on the constitutional recommendations was considered a negative factor as its fallout could be very dangerous in the backdrop of latter’s threat of march to Islamabad.

“The failure of two weeks long talks on the LFO issue seems to have taken steam out of the market at least for the near-term overshadowing the positive impact of peace moves with India,” analysts said.

It was widely speculated that the bulls will greet the prime minister with a fresh robust rally beyond the 3,000 point index level ahead of the corporate excellence award ceremony later in the evening but bears fought back and drove them out of the market.

The prime minister along with the finance minister is expected to announce some fresh incentives for the corporate sector at the ceremony but investors seem to be worried over the impending political polarisation in the wake of LFO issue.

Moreover, Indian U-turn on conditional talk offer linking it to cross-border infiltration also prompted some rethinking on the related political issues, having a negative impact on the buying euphoria, brokers said.

But some others hope there is still a hope of a consensus on the LFO despite rigid positions taken by the contenders of power within a week’s time and investors should not jump to hasty conclusions, they added.

Most of the overvalued shares came in for active profit-selling and ended modestly lower, although bulk of it was absorbed at dips. PSO, PTCL, Hub-Power, Fauji Fertilizer, ICI Pakistan and Engro Chemical being leading among them.

“I don’t foresee any major change in future market outlook at this formative stage of widening of political divide,” says an analyst. “The market has attained its career-best level and it may not be that easy to pull it down just on whims.”

Minus signs dominated the list under the lead of Parke-Davis and Wyeth Pakistan, which fell by Rs23 and Rs46 followed by Rafhan Maize falling also sharply lower by Rs18 on selling prompted by some adverse news about the interim earnings.

Dewan Textiles, Bata Pakistan, Noon Pakistan, HinoPak Motors, Millat Tractors, Javed Omer and Burewala Textiles also suffered fall ranging from Rs2 to Rs4.35.

However, all was not bad with the broader market as most of the leading shares also managed to finish with extended gains, leading among them being Central Insurance, Dawood Cotton, Indus Jute, Otsuka Pakistan, Dreamworld, Pakistan Services, Goodluck Industries, Nestle MilkPak, Lakson Tobacco, Grays of Cambridge, Bhanero Textiles, Fazal Textiles, Shafiq Textiles, Shahtaj Sugar, Shell Gas, and Colgate Pakistan, up Rs2 to Rs6.90.

Trading volume showed a modest rise at 150m shares from the previous 141m shares as a record number of shares came in for two-way activity, with losers having a strong lead over the gainers at 234 to 155 and 57 shares holding on to the last levels.

PTCL led the list of active, off 35 paisa at Rs25.45 on 29m shares, Sui Northern Gas, up 75 paisa at Rs31.55 on 26m shares, D.G. Khan Cement, off 55 paisa at Rs15.75 on 13m shares, Hub-Power, lower 15 paisa at Rs34.75 on 11m shares and KESC, easy 15 paisa at Rs5.60 on 7m shares.

PSO led the list of other actives, off 85 paisa on 7m shares, Nishat Mills, lower Rs1.15 on 6m shares, Dewan Salman, easy 65 paisa on 3m shares, Lucky Cement, lower 10 paisa on 3m shares and Dewan Motors, off 35 paisa also on 3m shares.

FORWARD COUNTER: Barring Sui Northern Gas, which posted a gain of 65 paisa at Rs31.60, on 9m shares, all other shares fell under the lead of Nishat Mills, off Rs1.15 at Rs23.20 on 1m shares.

PTCL was traded lower by 30 paisa at Rs25.50 on 8m shares, Hub-Power, easy 10 paisa at Rs34.80 on 8m shares and PSO was quoted lower by 80 paisa at Rs206.50 on 5m shares.

DEFAULTER COMPANIES: Trading activity on this counter further picked up as a record number of 36 shares came in for active trading under the lead of Saitex Textiles, up 25 paisa at Rs1.45 on 97,500 shares.

Other actives were led by Qayyum Textiles, higher by 30 paisa at Rs1.55 on 89,000 shares and Suzuki Motorcycles, easy 70 paisa at Rs13.75 on 51,500 shares. Some others were also actively traded.