October 25, 2003	Saturday	Sha’aban 28, 1424

KARACHI, Oct 24: Stocks on Friday staged a robust recovery on active short-covering by leading investors at the lower levels amid moderately brisk trading. The KSE 100-share recovered 95 points and confidently breached through the psychological barrier of 3,900 points.

Bulk of the short-covering originated from the short-sellers who had been active sellers during the last about two weeks followed by some of the institutional traders.

Though financial institutions participated in the market’s recovery, their support was modest apparently because of weekend considerations.

The market’s buoyant mood was also well-reflected in the KSE 100-share index, which also staged a robust rally of 95.25 points at 3,945.36 as compared to 3,850.12 a day earlier, reflecting the strength of the leading base shares including PTCL, Hub-Power and PSO.

The market capital, which had dropped to Rs820bn also rose by Rs17.518bn at Rs837.503bn, reflecting the strength of PSO, PTCL and Hub-Power, some of the heavily-capitalized shares.

The snap rally surprised even the most well-informed analysts and most of them were guessing from where the buying offers are coming, notably during the afternoon session.

During the last about two weeks the KSE 100-index has suffered a massive erosion of 750 points or 30 per cent sending shock waves among the bulls. But as the correction was overdone, bulls fought back and drove short-sellers out of the market.

“There was no change in the basic fundamentals,” says a leading stock analyst commenting on the market’s snap rally at the weekend session, which generally triggers selling by the weakholders “A formidable section of leading operators was indulging in short selling for the last two weeks and re-entered the market to cover positions at the lower levels”.

Although leading financial institutions were still conspicuous by their absence, indications are that they too will be back in the market possibly by the next week, they said.

Corporate announcements from some leading companies including National Bank are due during the next week and predictions of higher earnings could evoke a lot of fresh buying in those shares and sympathetic support on the other counters.

The market seems to have already absorbed the negative impact of lower earnings by Shell Pakistan, ICI Pakistan and Engro Chemicals but hopes of capital gains in the sessions to come are expected to keep them in the share business, brokers said.

All the pivotals, notably in the energy sector were in the forefront of gainers followed by some low-priced shares on the other blue chip counters, notably chemical, cement and insurance.

Among the top gainers, Javed Omer, Pakistan Oilfields, PSO and Grays of Cambridge were leading, which recovered Rs10.30 to Rs17.75 from the previous losses and so did IGI, which also rose by Rs10.35.

Other good gainers were led by PICIC, Ahmed Hassan Textiles, Cherat Cement, Engro Chemical, D.G.Khan Cement, Pakistan Refinery and ICI Pakistan, up by Rs2.15 to Rs3.55.

Losers were led by Sapphire Fibre, Cherat Papers, National Refinery, Arif Habib Securities, Packages, Shell Gas and Unilever Pakistan, which were marked down by Rs2 to Rs25.

Trading volume rose to 240m shares from the previous 183m shares as gainers forced a fair lead over the losers at 145 to 131, with 26 shares holding on to the last levels.

The most active list was topped by PTCL, higher by Rs1.65 at Rs34.30 on 65m shares, Hub-Power, firm by 35 paisa at Rs35.05 on 30m shares, PSO, sharply higher by Rs14.80 at Rs261.90 on 28m shares, D.G.Khan Cement, up by Rs2.70 at Rs38.85 on 18m shares and Fauji Cement, higher by 90 paisa at Rs9.80 on 12m shares.

They were followed by FFC-Jordan Fertilizer, up by 70 paisa on 10m shares, Sui Northern Gas, steady by 85 paisa on 7m shares, Pakistan Oilfield, higher by Rs10.30 on 7m shares, Dewan Salman, up Rs1.20 also on 7m shares and National Bank, higher by 55 paisa on 6m shares.

FORWARD COUNTER: Speculative issues on the forward counter also ruled firm and rose from the recent lows under the lead of PTCL, up by Rs1.80 at Rs34.45 on 14m shares followed by PSO, higher by Rs13.90 at Rs261.50 on 13m shares and Hub-Power, up 75 paisa at Rs35 on 10m shares.

ICI Pakistan rose by Rs3.55 at Rs76.45

on 1.255m shares, while FFC-Jordan Fertilizer was up by 40 paisa at Rs16.45 on 2m shares. Engro Chemical and Fauji Fertilizer also recovered Rs1.25 and Rs2.25 at Rs80.55 and Rs89.00 respectively on light trading.

DEFAULTER COMPANIES: Standard Investment Bank and Financial Link Modaraba again led the list of actives, up by 10 and 30 paisa respectively at Rs6 and Rs3.50 on 0.114m and 0.105m shares respectively. Others were traded modestly.