June 4, 2003	Wednesday	Rabi-us-Sani 3, 1424

KARACHI, June 3: A massive disinvestment programme announced by the Privatization Commission sent a wave of an optimism on the stock market on Tuesday but negative news from the political front did not allow the consolidation forces to play their due role. The KSE 100-share index managed to put on a fresh gain of 4.62 points and stood above the barrier of 3,100 points at 3,108.

A section of investors did cover positions at the lower levels but the buying interest lacked aggressiveness associated with an ambitious sell-off programme of some mega state-owned units including the PTCL during the next three months. Surprisingly, there was no hint for the final bidding date of PSO, which had earlier fixed for April 26 but postponed on the reported request of some foreign short-listed bidder because of Iraq war.

The market was terribly weighed down by the negative fallout of MMA’s stance to soften its stand on the LFO or the president’s uniform after hopes of an imminent agreement between the government and the MMA proved false. Reports of some action against the MMA government in the NWFP further accentuated the situation.

However, the perception that the Privatization Commission will stick to its disinvestment programme forestalled panic selling from the retailers and bargain-hunters, although fears over a big political showdown between the contenders worried investors.

The KSE 100-share index should have risen sharply higher after the reports of privatization of market leaders PTCL, National Bank, Sui Southern Gas and Oil and Gas Development Corporation reached the market but negative news from the political front forced bulls to play safe. It ended higher with a fresh gain of 4.62 points at 3,108.53.

“Four billion shares of the above companies, the privatisation commission intends to sell through the bourses before Sept 30, 2003 is a massive amount and could overwhelm both the investors and the market just in one go,” analysts said. “Though programme is expected to be well phased out in three months time appears to be too short.”

Investors, financial institutions and brokerage houses will have to line up a lot of cash amounts to absorb the floating stocks of these companies, three of which are listed on the stock exchanges and are actively traded.

“The biggest fear of the market could be whether or not it is capable of absorbing such a massive off-loading of shares within the officially time frame,” brokers ask. “There are also fears of decline in the share values of the other pivotals owing to oversupply.”

Some analysts also fear the developing situation on the LFO front followed by reports of MMA’s refusal to toe the official line and some official action by the centre against its government in the Frontier Province could take away the current steam out of the market.

“The current political set-up may not be wind out in the face of strong opposition stance on LFO and some other official actions, sailing may not be that safe if there was a rumpus on the budget session due on June 7.”

All doors aiming at a political consensus on the current issues between the government and the opposition now seem to have been closed and investors are now debating “what next”.

It was perhaps in this background that investors were in two minds about the developing situation and did not participate in the proceedings in a normal way and just played safe.

Fazal Textile and Shell Pakistan led the list of top gainers, up Rs7 each, followed by Pakistan Paper Products, Packages, Jahangir Siddiqui & Co, Central Insurance, Pakistan Services, Unilever Pakistan, Lakson Tobacco and Siemens Pakistan, higher by Rs3.25 to Rs5.95.

Losers were led by Colgate Pakistan and Wyeth Pakistan, off Rs7.70 to Rs20 respectively on selling at the highly inflated levels owing to persistent rise because of shortage of the floating stock.

Javed Omer, Al-Abid Silk, Reckitt and Benckiser, Clover Pakistan, Treet Corporation and Bhanero Textiles were other prominent losers, off Rs3.10 to Rs5.

Trading volume rose modestly to 194m shares from the previous 123m shares as gainers managed to force a modest edge over the losers at 190 to 170, with 63 shares holding on to the last levels.

PTCL topped the list of actives, up 20 paisa at Rs26.05 on 39m shares, D.G. Khan Cement, higher by 75 paisa at Rs20.95 on 27m shares, Dewan Motors, up Rs1.25 at Rs19.55 on 18m shares, Hub-Power, firm by five paisa at Rs34.95 on 13m shares, Nishat Mills, higher 25 paisa at Rs25.95 on 10m shares and National Bank, higher by 55 paisa at Rs26 on 7m shares.

Other actives were led by Sui Northern Gas, easy five paisa on 8m shares, Attock Cement, higher by Rs1.60 on 7m shares, Pakistan Oilfields, off Rs2.05 also on 7m shares and PSO, lower by 80 paisa at Rs6m shares.

FORWARD COUNTER: PTCL also came in for active speculative buying on this counter and rose by 15 paisa at Rs26.10 on 7m shares followed by Hub-Power, firm by five paisa at Rs35.05 on 3m shares, Sui Northern Gas, easy 15 paisa at Rs31.95 on 2.439m shares and PSO, off 50 paisa at Rs213.50 on 2m shares.

DEFAULTER COMPANIES: Medi Glass again came in for strong support and proved to be the most active scrip, up 35 paisa at Rs3.30 on 0.223m shares followed by Mehran Jute, higher 60 paisa at Rs1.50 on 0.147m shares and Sunshine Cotton, lower 10 paisa at Rs1.90 on 69,500 shares, others were modestly traded.