Stocks undergo mild correction on targeted selling
By Our Staff Reporter
KARACHI, May 10: Stocks on Tuesday suffered a mild correction after mid-session on targeted selling in some leading base shares but it was well-absorbed at the dips, signalling that the current run-up was not overdone. Although reports about an increase in capital value tax (CVT) on share income from the existing 0.01 per cent to 0.1 per cent in the next budget could hardly be a negative factor at this stage, some active players made it like so at least for the time being and cashed in on it, brokers said.
“The government may not take the risk to disturb the current status quo in a recovering market,” sources said. “It needs money but it should tap other potential revenue areas not the massively battered share business.”
The opening was, however, fairly promising, what the dealers called, an extension of the overnight run-up as the index early crossed its next barrier of 7,400 at 7,460, but late selling pushed it modestly lower owing largely to the weakness of OGDC.
It finally closed 17.29 points lower at 7,367.69 as compared to 7,384.98 a day earlier, although other leading base shares, including PTCL, PSO and Pakistan Petroleum managed to finish further higher amid active follow-up support.
The initial run-up was attributed to fresh heavy buying in PTCL followed by reports that bids process of its sell-off would start after the prime minister returns from a four-nation tour, but later selling was triggered by negative reports about the increase in CVT.
PTCL at one stage surged to day’s best bid of 69.10, but mid-session selling in OGDC, which holds a weightage of 22 per cent in the index, forced it to finish modestly lower.
PSO and Pakistan Petroleum on the other hand finished with fresh gains of Rs3.95 and Rs5.85, respectively, amid active trading and long-term investment. PICIC Growth Fund rose sharply higher, while bank shares, notably MCB and National Bank, came in for profit-selling and finished lower.
“I don’t think the CVT issue could halt the current market upturn,” predicts a leading analyst. ”Investors have other supporting factors, including higher corporate earnings and dividend, to derive the needed strength.”
Moreover, it appears to be rumours as the government may not like to raise the issue of CVT in the backdrop of recent happening on the stock market and its subsequent crash, he said.
Although the budget is still about a month away, positive feelings and whispering about the fiscal measures will continue inspiring fresh buying from all and sundry, he says.
The market decline was led by the textile sector for unspecified reasons followed by some leading share on other counters, notably Artistic Denim and Wyeth Pakistan, off Rs12 to Rs49.
Others prominent losers included Fazal Textiles, EFU Life, Central Insurance, Faisal Spinning, Pakistan Cables and Clover Pakistan, off Rs4.50 to Rs5.20, while others fell fractionally. Although gainers trailed far behind losers, some of the leading shares, managed to finish with good gains, notably among them being Atlas Honda, Millat Tractors and Siemens Pakistan, up Rs7.30 to Rs30.
Gatron Industries, Attock Petroleum, Packages, Clariant Pakistan, PPL and PSO also came in for active support and posted gains ranging from Rs4 to Rs5.95.
Trading volume rose further to 388m shares from the previous 372m shares, but losers forced a strong edge over gainers at 172 to 116, with 41 shares holding on to the last levels.
OGDC topped the list of actives, off Rs1.15 at Rs100.10 on 126m shares followed by PTCL, firm by 35 paisa at Rs67.75 on 102m shares, PSO, higher by Rs5.95 at Rs383.20 on 35m shares, Pakistan Petroleum, up Rs5.65 at Rs188.65 on 20m shares, National Bank, off Rs1.80 at Rs97.25 on 14m shares, MCB, lower 75 paisa at Rs76.45 on 11m shares and PICIC Growth Fund, higher by Rs2.40 at Rs50.55 on 8m shares.
Sui Northern Gas was also actively traded, off Rs1.05 on 15m shares followed by Pakistan Oilfields, lower 55 paisa on 11m shares and DG Khan Cement, easy 60 paisa on 15m shares.
FORWARD COUNTER: PPL was actively traded and was up Rs5.20 at Rs189.30 on 11m shares followed by PTCL, steady by 15 paisa at Rs68 on 10m shares and OGDC, off Rs1.10 at Rs100.70 on 8m shares.
PSO also came in for renewed support and rose by Rs6 at Rs385 on 6m shares and MCB, off Rs1.20 at Rs77 on 3m shares.
DEFAULTER COS: Trading failed to pick up on this counter in the absence of leading buyers and as a result the activity remained slow amid alternate bouts of buying and selling.
BOARD MEETINGS: Haroon Oils on May 13; Ahmed Hassan Textiles on May 14; Fateh Industries, Exide Pakistan and Automotive Battery on May 16.
