July 24, 2003	Thursday	Jumadi-ul-Awwal 23, 1424

KARACHI, July 23: Stocks on Wednesday shrugged off the overnight easiness as investors covered positions at the lower levels mostly on the undervalued counters on the perception that interim corporate earnings of some leading shares may be much higher than the analysts projections. The KSE index was up 48.80 points at 3,787.81.

The underlying sentiment was also influenced favourably followed by reports that a high-powered Chinese delegation is due shortly to explore investment opportunities in telecom and energy sectors.

The trade volume figure failed to expand to an average level of 500m shares as retailers held on to their positions amid hopes that the new price valuation rules to be effective from July 28, may not trigger panic-selling as widely speculated initially.

After having touched its career-best level at 3,791.00, only nine point short of its next chart level of 3,800, the KSE 100-share index finally ended at 3,787.81, up 48.80 points. The market capitalization rose by Rs10.659bn to quote at a record high of Rs844.061bn.

Most of the leading shares in energy and telecom sectors, notably PSO and PTCL, came in for strong support aided by reports of arrival of the Chinese investment team, followed by cement shares, which remained in strong demand on reports of higher earnings.

“The deeper inroads being made by the Chinese in various sectors of the economy signals a major shift in official investment policies,” analysts said. “After Saindak copper project and Gwadar port the oil and telecom sectors may also bring a change in official perceptions.”

There was no trace of overnight’s abortive bear bid to tilt the balance in their favour as bulls were not inclined to leave the arena before achieving their pre-determined index level of 4,000.

“The new target now looks a sure possibility, although much will depend on the outcome of proposed government-opposition parleys on the LFO on July 26,” some analysts said.

But others hope that the possible failure of talks on LFO could upset the balance though temporarily as the current buying flurry derives its strength from some positive corporate fundamentals.

The chief inspiring force behind the sustained run-up was anticipatory buying on those counters whose interim working results for the half year ended June 30, 2003, are due by early next month and rumours of higher interim payouts continue to generate fresh short-covering.

There are, however, fears in some quarters that the new price valuation rules to be effective from July 28, could temporarily trigger a lot of selling both from the leading investors as well as the retailers and how will bulls react to that phenomenon will set the future direction of the market.

While the overvalued sectors were generally neglected, strong institutional buying is now targeting the second-liners owing to an attractive bait of quick capital gains.

Meanwhile, according to market sources, FFC-Jordan Fertilizer, the sole producer of DAP fertilizer, is expected to resume its commercial production by September as a Moroccan company has agreed to supply to it phosphoric acid under a recently signed agreement.

Plus signs again dominated the list under the lead of Al-Ghazi Tractors, National Refinery, IGI Insurance, BOC Pakistan and Wyeth Pakistan, up by Rs6.90 to Rs40, the largest rise of Rs40 being in Wyeth Pakistan.

ICP SEMF, Mehmood Textiles, Pakistan Reinsurance Co, Shell Pakistan, Indus Motors, Glaxo-SKF, Cherat Papers, Atlas Battery, PSO and Island Textiles were other leading gainers, which posted gains ranging from Rs4.50 to Rs6.55.

Losing shares were led by HinoPak Motors, Ahmed Hassan Textiles, EFU Life, Fazal Textiles, Premier Sugar, Gadoon Textiles and Javed Omer, off Rs2 to Rs7.25.

Trading volume showed a modest rise at 396m shares from 386m shares a day earlier the advancing shares forced a strong lead over the losing ones at 250 to 139, with 69 shares holding on to the last levels.

Lucky Cement topped the list of actives, up by Rs1.50 at Rs21.60 on 48m shares followed by the KESC, higher 70 paisa at Rs7.80 on 41m shares, PTCL, firm 25 paisa at Rs31.50 on 33m shares, PSO, higher by Rs5.35 at Rs253.95 on 26m shares and FFC-Jordan Fertilizer, steady by 15 paisa at Rs16.45 also on 26m shares.

Other actives were led by Hub-Power, steady five paisa on 22m shares, Maple Leaf Cement, higher one rupee on 21m shares, Pak PTA, firm by 10 paisa on 20m shares, D.G.Khan Cement, up by 55 paisa on 17m shares and Sui Northern Gas, firm by 10 paisa on 12m shares.

FORWARD COUNTER: PSO came in for active short-covering at the overnight lows and rose by Rs5.24 at Rs253.75 on 8m shares. Its August settlement also rose by Rs5.35. PTCL followed it, up by 21 paisa at Rs31.55 on 7m shares and Hub-Power, steady five paisa at Rs39.35 on 6m shares.

FFC-Jordan Fertilizer was traded unchanged at Rs16.50 on 3m shares, while Pak PTA rose by 15 paisa at Rs12.35 also on 3m shares. Barring Fauji Fertilizer, which came in for stray selling and was quoted lower by Rs1.20 for both the settlements, all others followed the lead of their ready counterparts.

DEFAULTER COMPANIES: Asset Investment Bank came in for strong support and rose by Rs1.10 at Rs4.10 on 0.707m shares followed by Schon Modaraba, up by 35 paisa at Rs1.50 on 0.366m shares and Interfund Modaraba, firm five paisa at Rs1.90 on 0.157m shares.