July 29, 2003	Tuesday	Jumadi-ul-Awwal 28, 1424

KARACHI, July 28: Stocks on Monday maintained their upward drive followed by heavy buying in the leading base shares, allaying fears of panic selling with the introduction of new price valuation rules. The KSE 100-share index rose by 41 points.

The resumption of government-MMA talks on the LFO and the ARD willingness to attend the next meeting on the contentious issues though remained inconclusive, have certainly raised hopes that ice has been broken on the issue, which could lead to a broader consensus formula to end the deadlock, analysts said.

The KSE 100-share index posted a fresh rise of 40.91 points at 3,848.58 as compared to 3,807.67 at the last weekend, allaying fears of panic selling after the introduction of the new price valuation rules in the carryover market from Monday, July 28.

The total market capitalization attained new peak level at Rs858.528bn, from the previous Rs848.475bn, up Rs10.053bn.

Some analysts claim as the new system will need more money for clearing as the prices will be fixed at the lowest level of the last 52 weeks, some of the leading operators may unload their long positions to meet the clearing but the sailing was smooth contrary to general apprehensions.

“The maiden session of the new price valuation system evoked a lot of short-covering rather than selling as was widely speculated after the KSE notice,” analysts said, adding “but during the two-week notice period all those having stake in the new rules seem to have adjusted their portfolios accordingly.”

The opening was, therefore, on the higher side, although the government-MMA on the LFO remained inconclusive owing perhaps to the ARD boycott. But analysts doubt any breakthrough as the positions taken by the both are too rigid.

“The market’s credible performance reflects that it is not inclined to be cowed down by the negative political developments and intends to keep its march to the index level of 4,000 sans bad news apparently on the strength of a massive surplus liquidity,” one broker predicts.

But investors seems to have buoyed by some positive news on the corporate front, notably the PSO plan to set a big refinery to have its refining capacity for marketing purposes. PSO holds a market share of 75 per cent for all the petroleum products.

But analysts are surprised over the news of a proposed refinery as it is not clear whether it will be a joint venture with the strategic buyer after the disinvestment of its controlling shares to one of the three short-listed strategic buyers or a solo flight.

The market is rife with rumours that final bidding date for its sell-off is expected to be announced by the government possibly by the next week.

The other contributory positive factor was market talk of higher interim dividend by some of the leading companies whose board meetings are due during the next couple of days. Unilever Pakistan has already announced an interim dividend of Rs58 per share of Rs50.

Major gainers were led by Atlas Battery, Pakistan Refinery, Island Textiles, Bhanero Textiles, National Refinery, Javed Omer and Wyeth Pakistan, up by Rs7 to Rs35.

Other good gainers were led by Jahangir Siddiqui Bank, Faisal Spinning, Sapphire Textiles, Lawrencepur Woollen, Attock Refinery, Pakistan Oilfields, Aventis Pharma and Packages, which posted gains ranging from Rs4 to Rs5.45.

Losers were led by Treet Corporation and Unilever Pakistan, off Rs12 and Rs25 followed by Pakistan Resources Co, Fazal Textiles, Dawood Cotton, Dawood Hercules, Pakistan Gum Chemicals, Abbott Lab and BOC Pakistan, off Rs2 to Rs4.35.

Trading volume rose to 383m shares from the previous 300m shares as gainers maintained a strong lead over the losers at 289 to 119, with 55 holding on to the last levels.

PTCL topped the list of most actives, higher by 60 paisa at Rs31.95 on 76m shares followed by Hub-Power, up 45 paisa at Rs39.65 on 44m shares, D.G. Khan Cement, higher by Rs1.15 at Rs38.80 25m shares, PSO, up Rs1.60 at Rs261.50 on 19m shares and PIAC, higher by Rs1.50 at Rs17.80 on 17m shares.

Other actives were led by Nishat Mills, up Rs1.20 on 14m shares, Dewan salman, firm by 65 paisa on 13m shares, T.R.G. Pakistan, higher Rs1.55 also on 13m shares, National Bank, up Rs1.20 on 12m shares and Japan Power, steady 25 paisa on 9m shares.

FORWARD COUNTER: PTCL came in for active short-covering and rose to close higher by 68 paisa at Rs32.40 on 8m shares followed by Hub-Power, up 60 paisa at Rs40.20 on 5m shares and PSO, higher Rs2.25 at Rs264.25 also on 5m shares.

Dewan Salman also rose by 66 paisa at Rs21.90 on 2m shares and FFC-Jordan Fertilizer was marked up by 25 paisa on 1m shares.

DEFAULTER COUNTER: Biafo Industries led the list of actives, up 35 paisa at Rs6.80 on 0.842m shares followed by Asset Investment Bank, firm by 10 paisa at Rs6 on 0.493m shares and Financial Link Modaraba, up 40 paisa at Rs2.90 on 0.441m shares.