KARACHI, Feb 11: Stocks on Friday posted fresh widespread gains as investors continued to build up long positions on selected counters in a highly overbought market fraught with high financial risks.
Speculative buying was apparently triggered, notably in the bank and energy shares followed by reports of higher corporate earnings and predictions of handsome dividend plus bonus shares.
The KSE 100-share index posted a fresh gain of 42.13 points at 7,238.76 as compared to 7,196.63 as leading index shares rose further higher under the lead of OGDC and PTCL.
A cash dividend of 20 per cent plus bonus shares of an identical amount (EPS Rs15.31) by Askari Bank has reinforced the investor perceptions that other leading banks could improve upon their corporate performance because of their size and capital base, analysts said.
National Bank, MCB and Bank of Punjab were the other trend setters, which maintained their upward drive on active speculative buying ahead of their board meetings. Most of the bank shares are ruling about 10-time higher than their face values and some analysts fear there could be a massive downward adjustment after their annual working results are out.
But some others claim the current levels are sustainable and there is a room for further improvement on the strength of their EPS. Energy shares continued to seek further higher levels under the lead of OGDC and Pakistan Oilfields amid reports of higher interim results, while PPL and PSO followed them and so did some others including refineries.
Some of the leading brokers and financial analysts said they are worried over the post-dividend corporate scenario. The big question being debated is "whether the dividend-driven rally would be sustained."
Dividend announcements from some of the leading companies are still to come, and by that time the index could stabilize above the 7,500 levels and that point could well prove a deciding factor for its future direction, they said.
The interesting feature was that there are more buyers than the sellers on each counter, which in turn continued to fuel price flare-up. "When too many a rupee chase too little a stock there is always price flare-up," they said.
Plus signs again held a strong lead over the minus ones, under the lead of Zulfiqar Industries, Indus Dyeing, Thal, PPL, JWD Sugar, Pakistan Oilfields and Aventis, up by Rs6.30 to 20.55.
PNSC, Treet Corporation, Premier Sugar, Crescent Steel, Allwin Engineering, Pakistan Engineering, Pakistan Dotcom, Murree Brewery, and some others were also actively traded, closing higher by Rs4.55 to Rs5.25.
Losers were led by Shafiq Textiles, Siemens Pakistan, Wyeth Pakistan, Pakistan Cables, International Industries, Dawood Hercules, Atlas Honda and AKD Securities, off Rs4 to Rs13.
Trading volume showed a modest decline at 575m shares from 579m shares a day earlier but gainers maintained strong lead over the losers at 208 to 127, with 51 shares holding on to the last levels.
PTCL topped the list of actives, up 20 paisa at Rs64.25 on 91m shares followed by OGDC, steady also by 20 paisa at Rs88.50 on 75m shares, Pakistan Oilfields, higher by Rs13.60 on 52m shares, DG Khan Cement, firm by 50 paisa at Rs64 on 50m shares and National Bank, higher by Rs2.50 at Rs109.55 on 38m shares.
Other actives were led by Dewan Salman, up Rs1.30 on 25m shares, MCB, firm by 45 paisa on 23m shares, Hub-Power up 55 paisa on 22m shares, Bank of Punjab, higher Rs1.95 also on 22m shares and PSO, up Rs2.80 on 21m shares.
FORWARD COUNTER: PPL came in for strong support and posted a sharp gain of Rs6.90 at Rs158.25 on 75m shares followed by PTCL, steady by 55 paisa at Rs64.90 on 27m shares, OGDC, firm five paisa at Rs88.70 on 13m shares and Pakistan Petroleum, sharply higher by Rs13 at Rs273.75. Hub-Power also rose by 40 paisa at Rs34.85 on 8m shares.
DEFAULTER COS: Crescent-Standard Bank led the list of actives on this counter, up Rs1.50 at Rs17.10 on 0.997m shares followed by Zahoor Cotton, higher by Rs1.10 at Rs6.10 on 0.292m shares, while others were modestly traded but mostly on the higher side.
