July 2, 2003	Wednesday	Jumadi-ul-Awwal 1, 1424

KARACHI, July 1: Cut in profit rates on National Savings Scheme and upward revision of petroleum prices triggered heavy buying in leading stocks on Tuesday as investors tried to ride the bandwagon amid market’s renewed upward drive to seek further higher levels. The KSE 100-share index rose by 30.07 to finish its new career-best level of 3,432.55 points.

Analysts said predictions of a massive outflow of funds from the National Savings Scheme to stocks after 0.96 to 1.53 per cent cut in their profit rates appeared to be the chief inspiring force, which pulled the market out of the prevailing sluggishness.

“The start of the new fiscal on a bullish note could well prove a forerunner of new records, both in terms of market capitalization and meteoric rise in the KSE index in the changing political scenario,” they said. “But bears say a big correction is long overdue.”

Heavy buying in the energy shares after fortnightly upward revision in petroleum prices was another supporting factor behind the market’s run-up, analysts said. PSO led the advance, which rose sharply by Rs6.35 on large volume.

Adamjee Insurance was also actively traded and finished around its circuit breaker, up Rs4.45 at Rs64.35 but on the other hand Engro Chemical, Lucky Cement, D.G. Khan Cement and Pakistan Oilfields came in for active selling at the higher levels.

“The post-budget cut in NSS profit rates was in line with the analysts predictions as the government wants to see a robust market even at the cost of individual savings at least until its current privatization plan is completed according to official price perceptions,” brokers said.

The largest cut of 1.53 per cent is on the Defence Saving Certificates in which bulk of the individual savings have, over the years, found their way as the investment doubles in 10 years time.

The KSE 100-share index finished with a good gain of 30.07 points at at 3,432.55 as compared to 3,402.48 a day earlier, reflecting the strength of the leading base shares. The market capitalization also rose by Rs8.014bn to Rs763.780bn.

“The near-term target for the KSE now appears to be 3,600 points and if all goes well with the investor perceptions and there is no heating up of political scenario on the LFO stand, it is expected to race toward its new peal levels in the months to come,” they said.

But some leading analysts say the market has already attained its best levels in the backdrop of positive backgrounds news and in the absence of fresh stimulants, the possibility of a retreat on technical grounds alone is there.

Worries related to higher cost of borrowing are there and massive volumes could cause major dents in the prevailing price structure after the unloadings start.

“Many may not agree, the market is sitting on a volcano of higher badla volume and rates,” analysts said, adding and when the “process of clearing starts there could be countless casualties in its wake.”

Plus signs dominated the list, with some of the shares whose floating stock is in hands rising to new peaks. Wyeth Pakistan, for instance, rose by Rs71 without matching ready business and so did Siemens Pakistan, IGI Pakistan, Javed Omer Vohra and Nestle MilkPak, up Rs11.20 to Rs26.25.

Other good gainers were led by Jahangir Siddiqui & Co, Adamjee Insurance, Pak-Suzuki Motors, Merit Packaging, Dewan Khalid Textiles, Pakistan Resource Co, Shahtaj Sugar, PSO and EFU Life, which posted gains ranging from Rs4 to Rs7.20.

Prominent losers were led by Rafhan Maize, Security Papers, Gillette Pakistan, Al-Ghazi Tractors, Mehmood Textiles, Atas Battery, Pakistan Refinery and Mitchell’s Fruits, off Rs2 to Rs4.

Trading volume rose to 343m shares from the previous 295m shares as gainers maintained a fair lead over the losers at 247 to 122, with 53 shares holding on to the last levels.

Maple Leaf Cement topped the list of most actives, higher by 95 paisa at Rs17.30 on 62m shares followed by Hub-Power, up 30 paisa at Rs38.20 on 49m shares, D.G. Khan Cement, off 55 paisa at Rs30.30 on 34m shares, PSO, higher by Rs6.35 at Rs234.70 on 24m shares and Bosicor Pakistan, up 45 paisa at Rs21.89 on 17m shares.

PTCL led the list of other actives, up 15 paisa on 16m shares, Lucky Cement, easy 10 paisa on 12m shares, National Bank, up 60 paisa on 10m shares, FFC-Jordan Fertilizer, higher 35 paisa on 8m shares and Adamjee Insurance, sharply higher by Rs4.45 on 10m shares.

FORWARD COUNTER: PSO came in for active support and rose by Rs5.10 at Rs235.60 on 9m shares followed by Hub-Power, higher 20 paisa at Rs38.45 on 7m shares and PTCL, up 15 paisa at Rs28.80 on 2m shares.

FFC-Jordan Fertilizer and Engro Chemical were traded higher by 25 paisa for the former at Rs13.90 on 2m shares and off 55 paisa for the latter at Rs87.00 on 1.343m shares.

DEFAULTER COMPANIES: Trading activity on this counter was relatively slow where shares of two dozen companies showed erratic movements amid alternate bouts of buying and selling.

Crescent Board led the list of actives, up 85 paisa at Rs4.85 on 75,500 shares followed by Suzuki Motorcycles, easy 25 paisa at Rs11.50 on 41,500 shares and S.S. Oils, higher 40 paisa at Rs7.40 on 33,000 shares. Others were modestly traded.