04 October 2004	Monday	18 Shaban 1425

The dividend-driven rally on the Karachi stock market was well sustained as bulls were not inclined to loosen their grip on price line amid reports of higher pay outs by some leading companies, possibly during the next trading week.

Unlike previous weeks, last week had more than one feature to boast for rebuilding the investors' confidence in share business.

Both, daily volumes and the range of stocks which came in for trading reflected that the leading brokerage houses and institutional traders had some rethinking on the Capital Value Tax (CVT) issue after a firm 'no' by the prime minister. They were now trying to live with it.

There could be technical interruption in between but the worst seemed to had been averted at least for near-term after the daily volume figure crossed the 300-million-share-mark, more than once.

The stocks came to their real self last week as the dividend-driven rally turned into buying euphoria reminiscent of the boom conditions indicating that the post-CVT lull had been broken.

The daily volume figures which had dropped to an average total of 200 million shares from the 400 million in the pre-CVT era regained in part their lost glory as the sustained run-up did not allow punters and institutional traders to sit on the sidelines. None among them was inclined to miss the rising market.

The boom-like conditions were well reflected in the KSE 100-share index which broke two consecutive barriers and stood firm around 5,245.82 points as compared to 5,080.67 a week earlier. The market capital also soared to Rs1,495.00 billion from the previous Rs1,441.00 billion.

Much of the activity remained confined to leading shares, notably the PTCL, the OGDC followed by the cement, bank, energy and textile shares which showed smart rallies amid active covering purchases in anticipation of higher dividend.

The massive buying in the PTCL inspired by higher dividend featured the week's stock market where most of the leading shares raced towards their pre-reaction levels under the lead of the Pakistan Petroleum.

The PTCL payout altogether changed the future market outlook as investors crossed the trading limits imposed on them by the CVT and pushed the daily turnover figure to a respectable total, one broker said.

The rally was terribly broad-based and engulfed the entire list after report of the PTCL payout reached the market followed by a buying euphoria reminiscent of a bull-run.

Above the prediction of a cash dividend of 50 per cent by the telecom giant, the Pakistan Telecommunication Company Limited boosted stock trading as it took the entire market along with it to new highs amid a briskly-traded session after about four months of the CVT-dominated lull.

It was virtually the PTCL day as its payout defied all predictions, one broker said. None among the well-informed ones looked beyond 45 per cent. Its share value surged by Rs1.85, the total rise during the last couple of sessions being Rs5.70.

The EPS on the current dividend ratio worked out to be Rs5.72, which was considered to be an attractive bait for any prospective investors to be in its fold in future. It accounted for 42 per cent of the weekly total turnover.

Heavy increase in the trading volume to well over 400 million shares after a relative sluggishness caused by the Capital Value Tax for the last couple of months reflected that the PTCL sales and those of the up-comings, including the Sui Southern Gas and some others, could keep the market in a good shape in coming months, analysts said.

Steep rise in the index was attributed to heavy trio, including the OGDCL and the Pakistan Petroleum, which also shared the day's honours along with the PTCL, and so did other energy shares followed by the reports of a record increase in oil prices in world markets.

The Pakistan Petroleum was outstanding among them which surpassed its previous peak level of Rs118.50 and finished at the day's best bid of Rs122.50, indicating that it was heading to hit new highs. The OGDC followed its lead and steadily rose from its recent low amid active short covering.

The Colgate Pakistan which was under pressure for last couple of sessions recovered from the recent lows and finished sharply higher followed by the Rafhan Maize and the Clariant Pakistan and many others.

Other good gainers were led by the National Refinery, the Haroon Oils, the Murree Brewery, the Pakistan Hotels, the Clariant Pakistan, the Noon Sugar and the Atlas Honda.

The Berger Paints and the Treet Corporation were among the leading losers, followed by the EFU Life, the Al-Ghazi Tractors, the HinoPak Motors, the Ferozsons Lab, the Aventis, the Clover Pakistan and the Pakistan Services.

FORWARD COUNTER: The speculative issues on forward counter also followed the lead of their counterparts in ready section and finished with good gains under the lead of Pakistan Petroleum, the OGDC, the PTCL, the Pakistan Oilfields and the Bank of Punjab. The MCB, the National Bank, the D.G.Khan Cement also finished on higher side while some others, mostly inactives ended lower in the absence of strong demand.