June 6, 2003	Friday	Rabi-us-Sani 5, 1424

KARACHI, June 5: Stocks on Thursday maintained an uppish leaning but finished below the day’s highs on selling triggered by fears of negative fallout of the LFO standoff on future trading. The KSE index ended with a fresh rise of 4.84 points at 3,132.46.

The on-balance closing was, however, on the higher side as instances of pre-budget buying on selected counters were not lacking. What was lacking was the aggressive buying and bargain-hunting associated with the pre-budget sessions because perhaps of fears of financial risks.

But a section of investors continued to build up long positions on counters rumoured to be the chief beneficiary of the package of incentives to be announced in the federal budget on June 7.

However, highly volatile either-way movement of the KSE 100-share index worried investors forcing them to play on both sides of the fence. After opening modestly higher, it steadily rose to hit the highest for the day above the 3,150 point level but the close was lower at 3,132.46, the net rise of the day being 4.84 points.

No one doubts about the positive fiscal measures in the new budget as “leaks” both from the official and private sector are regularly coming in to the market creating occasional flutters here and there.

Textile sector in pre-budget gossip is being billed as the major beneficiary of the incentive package as government will try to enhance its export capability to meet the challenges of the WTO regime expected to be the dominating tool of world trade from 2005.

Auto, cement and some other sectors, which, of late are the centre of activity, may follow it and so did some others as the new budget could be investment-friendly. Sharp gains in Atlas Honda, HinoPak Motors and Al-Ghazi Tractors, which rose by Rs4.45 to Rs8.15 was reflective of this perception.

But investors are not inclined to go for pre-budget speculative buying without having an eye on the political risks. The political situation is very tense and could take any turn provided the warring parties do not agree to resolve the LFO standoff.

“Investors think twice before taking stake even on the safe havens,” analysts said. “In the prevailing political situation only those could take risks who have the capacity to absorb financial setbacks.”

Some others claim the broader market, has so far in a way, ignored the risks involved in the political standoff over the LFO, the modest upward rise of the index tells lurking fears are evidently clear.

plus signs again dominated the list under the lead of Rafhan Maize, which recouped, in part, the overnight sharp loss and Unilever Pakistan, up Rs13.50 and Rs15 respectively. Other good gainers were led by Mitchell’s Fruits, Adamjee Insurance, Jahangir Siddiqui & Co, Dawood Cotton, Lawrencepur Woollen, Noon Sugar, Atlas Honda, HinoPak Motors, Grays of Cambridge, Pakistan Services, Dreamworld and Al-Ghazi Tractor, up Rs3.60 to Rs8.15.

Sapphire Fibre and Security Papers led the list of losers, off Rs2.85 to Rs6 followed by Siemens Pakistan, Indus Motors, Glaxo-SKF, Lakson Tobacco and Dawood Hercules, which suffered fall ranging from Rs2 to Rs2.75.

Trading volume rose further to 265m shares from the previous 217m shares as the advancing shares held a strong lead over the losing ones at 242 to 149, with 57 shares holding on to the last levels.

Dewan Motors topped the list of gainers on reports of higher sales and rumours of a good dividend, higher by Rs1.25 at Rs22.30 on 26m shares followed by Hub-Power, up 25 paisa at Rs35.20 also on 26m shares, PTCL, easy five paisa at Rs26.15 on 25m shares, Bosicor Pakistan, steady 15 paisa at Rs17.30 on 18m shares, National Bank, up 40 paisa at Rs26.60 on 15m shares, PSO, higher by 50 paisa at Rs214.25 on 12m shares and MCB, up 95 paisa at Rs36.45 on 8m shares.

Other actives were led by WorldCall, steady by 10 paisa on 15m shares, Dewan Salman, firm 15 paisa on 12m shares and D.G. Khan Cement, lower 40 paisa on 8m shares.

FORWARD COUNTER: PTCL came in for active selling at the recent highs and fell 10 paisa at Rs26.20 on 6m shares followed by Hub-Power, firm by 10 paisa at Rs35.25 on 5m shares, PSO, higher 50 paisa at Rs213 on 4m shares, Sui Northern Gas, lower 20 paisa at Rs32 on 2m shares and FCC-Jordan Fertilizer, up five paisa at Rs12 on 1.302m shares.

DEFAULTER COMPANIES: Most of the inactive scrips came in for active short-covering at the lower level under the lead of Taga Pakistan, up 20 paisa at Rs1.70 on 89,000 shares followed by Mehran Jute and Medi Glass, unchanged and up five paisa at Rs1.65 and Rs3.20 respectively. Out of 28 actives, some others also attracted active support.