KARACHI, Sept 7: Stocks on Tuesday failed to hold on to the initial gains as investors were in two minds about the negative impact of margin financing on daily volumes. They continued to shed their extra weight on the falling prices.
While the market was in search of stimulating news which could boost the morale of investors, negative developments trickling down in quick succession kept investors and brokers on toes, all throughout.
The bulk of profit-selling was confined to the overvalued shares, while a good number of second-liners managed to finish modestly higher amid active trading. The KSE index, in early session, was up by 26 points as institutional traders moved in and made active short-covering purchases at the overnight low levels.
However, as the follow-up support turned shy the index shed 23.69 points at 5,171.73 as compared to 5,195.42, a day earlier. The KSE Board of Directors, which met late on Monday, endorsed the SECP's decision of phasing out the badla system and replacing it with the margin financing, commencing from October 2004 to June 2005.
The market's early run-up was attributed to it but investors did not seem inclined to take long positions and got out of the market after liquidating positions at the inflated levels.
Fears about the snap float from the carryover market were hovering as a huge investment of Rs28 billion could cause dents in the prevailing price structure once the unloading by leading punters began, analysts said adding, "this was a constant threat to the genuine or an inspired run-up".
However, unlike the last evening's panic, sanity prevailed throughout the session amid alternate bouts of buying and selling. There was no hasty selling from anywhere.
"Market derived the strength from the rumours that a delegation of the KSE and other stock exchanges will meet the Prime Minister, sometimes next week, to apprise him of the negative fallout of the Capital Value Tax on daily volume since it became effective from July this", brokers said adding but no one was inclined to have bigger stake even at the attractively low levels.
Dividend announcements made by most companies are on higher side of the expectations but these were coming at a time when investors had other worries, notably the CVT and its negative impact on stock trading.
Prominent losers were led by the Al-Ghazi Tractors, Millat Tractors, the EFU Life, and Lakson Tobacco on post-dividend selling. Wyeth Pakistan and Javed Omer suffered fall ranging from Rs7 to 28.
The Pakistan Oilfields, Murree Brewery, Colgate Pakistan, Pakistan Cables, Abbott Lab, Pakistan Cables, Security Papers, Treet Corporation and Nestle Milkpak followed the path and were off Rs6 to 15.25.
Unlike the overnight session, all was not bad with the broader market as a good number of shares managed to finish higher under the lead of Askari Bank, Reliance Cotton, National Refinery, the ECO Pak, Pak Elektron, Attock Cement, Pakistan Engineering, International Industries and Atlas Auto and posted gains ranging from Rs2 to 10.
Trading volume again fell to 155 million shares from the previous 190 million shares as losers maintained a fair lead over the gainers at 200 to 104, with 34 shares holding on to last levels.
The D.G. Khan Cement topped the list of actives, up 80 paisa at Rs55.70 on 22 million shares, followed by the OGDC, lower 15 paisa at Rs63.55 on 14 million shares, the F.F. Bin Qasim, steady 10 paisa at Rs20.35 on 14 million shares, the Bank of Punjab, firm by 25 paisa at Rs62.55 on 12 million shares, and the National Bank, up 40 paisa at Rs69.40 on 9 million shares.
Other actives were led by the Askari Bank, higher by 2.20 on 7 million shares, the ICI Pakistan, firm by 50 paisa on 6 million shares, the Lucky Cement, lower 65 paisa on 5 million shares, the Pakistan Oilfields, off Rs5 also on 5 million shares, and the PTCL, steady five paisa on 5 million shares.
FORWARD COUNTER: The Pakistan Petroleum resisted fresh decline followed by the revival of demand at lower level and rose by 20 paisa at Rs106.15 on 18 million shares followed by the OGDC, lower 15 paisa at Rs63.75 on 6 million shares, the F.F. Bin Qasim, firm by 10 paisa at Rs20.45 on 3 million shares and the Pakistan Oilfields, sharply lower by Rs5.20 at Rs203.80 also on 3 million shares.
DEFAULTER COS: The Crescent-Standard Bank again led the list of actives, lower 15 paisa at Rs10.10 on 0.383 million shares, while all others were traded fractionally.
DIVIDEND: The Lakson Tobacco, cash, final 105 per cent, interim already paid 20 per cent, the Trust Leasing, cash 15 per cent, bonus 10 per cent, the Pakistan Hotels, cash 25 per cent, the Merit Packaging, cash 35 per cent, the Imrooz Modaraba, cash 32.5 per cent, the Agriauto Industries, cash 30 per cent, the Pakistan Papers Products cash, 40 per cent, the Pakistan Venture Capital and the Dawood Money Market Fund, both nil.
BOARD MEETINGS: Al-Noor Modaraba, on Sept 9, Habib Bank Modaraba, Bolan Bank, Thal Ltd, Platinum Insurance, Telecard on Sept 10,Gatron Industries, on Sept 11, Fidelity Leasing, Hajveri Modaraba, Shabiir Tiles, Guardian Modaraba, Dynea Pakistan, on Sept 13,Karam Ceramics, Cherat Paper sack, National Shipping Corporation, on Sept 14 and Cherat Cement, on Sept 15.
