KARACHI, May 21: The KSE 100-share index on Wednesday again breached the barrier of 3,000 to attain its new career-best level at 3,041.23 followed by heavy covering purchases in most of the pivotals aided by reports of an extension in tax exemption on capital gains.
The robust rally, just at the heels of overnight sell-off was triggered by the prime minister’s announcement about the extension in the tax exemption of capital gains, which lifted the index by over two per cent and added Rs12bn to the market capitalization at Rs669bn.
There appears to be a virtual run on most of the pivotals under the lead of PSO, PTCL,Hub-Power and Sui Northern Gas, which ended with previous losses fully recouped.
The KSE 100-share index, which had dropped below the 3,000 point level on Tuesday recovered to finish higher by 61.35 points at 3,041.23 as compared to previous 2,979.76 as all the leading blue chips soared to their pre-reaction levels on active short-covering. It hit the day’s lowest at 2,969.87 earlier in the session.
The fresh boost to stock trading was given by the prime minister who declared an extension in tax exemption on capital gains,meeting one of the major demands of the country’s exchanges. Positive economic indicators also supported the general run-up.
The prime minister said this while addressing the top business here on Tuesday on the occasion of KSE’s ceremony to give corporate excellence awards 2002 to top 25 companies.
After having crossed the highest-ever index level above the benchmark of 3,000 points, the market was at the outlook of some fresh incentives to sustain it or to rise above it and the prime minister gesture gave the needed push to the stock trading.
“The market is sure to scale new highs in the coming weeks irrespective of an expected negative fallout of the LFO controversy,” analysts said adding “the local market now has become more attractive for the foreign investors after the tax exemption.”
Foreign investors may flood the market with buystops just in one go but they will be back in due course to invest heavily in selected shares alone for capital gains.
Financial support may also remain on the higher side of the daily average as most of the leading banks have enough surplus funds to invest in equities in the absence of other attractive modes of investment, floor brokers said.
The rally was terribly broad-based and covered the entire lots, sending signals that the market is in for boom conditions reminiscent of mid-90s buying euphoria aided by massive capital investment in new industries and well 100 new flotations in a year.
Plus signs dominated the list under the lead of energy shares and some other blue chips, leading gainers being Colgate Pakistan, Javed Omer, Gatron Industries, Packages, Unilever Pakistan, Shell Gas, Shell Pakistan and Pakistan Oilfields, which posted gains ranging from Rs5 to Rs12.
They were followed by IGI Insurance, Gul Ahmed Textiles, Noon Sugar, Shahtaj Sugar after the announcement of 25 per cent interim dividend, Lakson Tobacco, National Refinery, Atlas Battery, Abbott Lab, Goodluck Industries, and Dawood Hercules, up by Rs3 to Rs4.95.
Losses on the other hand were fractional barring Glaxo-SKF, Security Papers, Reckitt and Benckiser, Burewala Textiles and Pakistan Reinsurance Co, off one rupee to Rs16.
Trading volume showed sharp rise at 254m shares from the previous 150m shares as gainers forced a strong lead over the losers at 274 to 102, with 42 holding on to the last levels.
PTCL topped the list of most actives,up 70 paisa at Rs. 26.15 on 57m shares followed by Hub-Power,higher by 50 paisa at Rs.35.25 on 42m shares, D.G.Khan Cement,up rs.1.50 at Rs. 17.25 on 25m shares, Sui Northern Gas, higher by 60 paisa at Rs. 32.15 on 24m shares and PSO,sharply higher by Rs.6.00 at Rs.212.10.
Other actives were led by Pakistan Oilfields higher by Rs12.40 on 14m shares, Lucky Cement, higher 80 paisa on 7m shares, Investec Securities, firm by 20 paisa on 5m shares, KESC, steady five paisa also on 5m shares and PIAC “A”, higher 60 paisa on 4m shares.
FORWARD COUNTER: Forward counter also followed the lead of the ready section where all the leading shares ended recovered under the lead of PSO, up Rs.5.50 on 7m shares followed by PTCL, higher by 65 paisa at Rs26.15 on 16m shares and Sui Northern Gas, up 55 paisa at Rs32.15 on 8m shares. FFC-Jordan Fertiliser rose 30 paisa at Rs11.75 on 0.972m shares. Engro Chemical rose by Rs1.10 at Rs80.40.
DEFAULTER COMPANIES: Brisk trading was again witnessed on this counter where some of the undervalued shares came in for fresh active support under the lead of Medi Glass, up 65 paisa at Rs.2.65 on 0.299m shares.
Other actives were led by Suzuki Motorcycles, higher 30 paisa at Rs14.05 on 0.266m shares and Schon Modaraba, firm by 10 paisa at Rs.0.85 on 75,000 shares.
DIVIDEND: Shahtaj Sugar Mills,interim cash at the rate of 25 percent.
