KARACHI, May 19: Stocks on Wednesday were back on the rails as investors covered positions at the lower levels after the return of sanity to the neighbouring markets and perception of continuation of peace moves by the new Indian government.
"The stock market may have over-reacted to the change in the Indian ruling elite," commenting on the market's decline during the last two sessions says a leading stock analyst. "Bears have used both the Congress victory and the sitting government's defeat to serve their own ends."
The KSE 100-share index was marked up by 50.53 points at 5438.68 as compared to 5,412.47 as all the leading base shares finished recovered under the lead of OGDC, PTCL and Hub-Power. The market capital also recovered Rs13.612bn at Rs1,463.528bn as compared to previous Rs1,449.916bn.
The market has fallen beyond its mandate in reaction to political changes in India but some positive developments there again lured investors back in the market. "I don't think any major change in the prevailing market trend until the budget early next month," says an analyst. "Pre-budgetary leaks if any could, however, cause flutters here and there in between."
The IPO of Bank Al-Falah closed on May 18, after two days and initial reports suggest investors actively participated in the new flotations, although the size of IPO appears too small to accommodate all the applicants, he said. It finished the day with a gain of Rs2 at Rs64.10 on 27m shares.
Cement shares, some of which has declined from the recent highs in line with the general reaction, again came in for strong support at the lower levels and accounted for about 70 per cent of the total volume, brokers said.
Reports of higher earnings owing to active local and foreign sales and analysts predictions of handsome payouts was some of the chief supporting factor behind the sustained run-up in this sector.
Low-priced pivotals on the other counters including OGDC, National Bank, MCB, PSO and PTCL also came in for active short-covering and ended recovered. The return of sanity to the BSE, which has plunged by 11 per cent and recovered by 8.5 per cent in single sessions followed by selling triggered by fears about the economic reform after the new Indian government takes over appear to be the chief destabilising factor behind the market collapse.
But the refusal of Sonia Gandhi to be the next Indian prime minister seems to have allayed fears of the big business about any possible political turmoil and they were back in the market as was reflected by fresh rise in the BSE index.
Plus signs dominated the list, major gainers Glaxo-SKF, Javed Omer and Clariant Pakistan, which posted gains ranging from Rs9 to Rs10.55 followed by EFU Life Insurance, Shakarganj Sugar, Rupali Polyester, PSO, Millat Tractors, Murree Brewery and Al-Ghazi Tractors, up by Rs2.80 to Rs7.
Losers were led by Atlas Battery and IGI Insurance, off Rs7.75 and Rs13.95 respectively followed by Artistic Denim, Abbott Lab, Ferozsons Lab, and Dawood Cotton, which suffered fall ranging from Rs3 to Rs4.40.
Meanwhile, the management of Attock Petroleum has applied for listing its share on the Karachi Stock Exchange, while Faysal Balanced Growth Fund is currently under process.
Trading volume rose to 475m shares from the previous 332m shares as gainers forced a strong lead over the losers at 242 to 109, with 52 shares holding on to the last levels.
DG Khan topped the list of most actives, up Rs2 at Rs62.05 on 89m shares, Fauji Cement, higher one rupee at Rs17.65 on 81m shares, OGDC, firm by 50 paisa at Rs66.85 on 28m shares, FF Bin Qasim Fertilizer, steady by 70 paisa at Rs20.45 on 24m shares, Maple Leaf Cement, up Rs1.25 at Rs44.60 on 21m shares and PTCL, higher by 45 paisa at Rs43.40 on 19m shares.
Other actives were led by Saadi Cement, up 25 paisa on 15m shares, Chakwal Cement, higher by 25 paisa on 14m shares, Lucky Cement, up 85 paisa on 13m shares and TRG Pakistan, firm by 40 paisa on 12m shares.
FORWARD COUNTER: Bank Al-Falah led the list of actives, up Rs2 at Rs64.10 on 27m shares followed by PTCL, higher by 50 paisa at Rs43.45 on 4m shares, FF Bin Qasim, up 60 paisa also on 4m shares and PSO, sharply higher by Rs3.50 at Rs271.05 on 3m shares.
Engro Chemical was traded higher by Rs1.40 at Rs100.50, while Dewan Salman rose by 50 paisa, both on light volumes.
DEFAULTER COS: Dandot Cement was again actively traded and ended higher by 50 paisa at Rs8.95 on 1.633m shares followed by Biafo Industries, up 90 paisa at Rs13.90 on 0.610m shares and Lafayette, off 50 paisa at Rs3 on 0.356m shares. Some others also attracted good support at the higher levels.
BOARD MEETINGS: Thal Industries Corporation, Nishat Mills, on May 25, Nishat Chunian, Umer Fabrics, Shakarganj Mills, United Sugar Mills, Ibrahim Fibre and Memood Textiles, on May 26, Crescent Textiles and Elahi Cotton Mills on May 27 and 28 respectively.
