Stocks recover 240 points on likely budget incentives
By Our Staff Reporter
KARACHI, May 30: The downward drift on the stock market on Monday was halted as investors covered positions in the energy shares at the attractively lower levels, but the light volume indicated that general buyers were conspicuous by their absence. The KSE 100-share recovered 240 points at 6,707.56. The pre-budget speculative buying may have made its debut on certain counters but no one was inclined to ride the bandwagon until the market takes a definite turn for the better.
The rally though confined to most of the leading shares was robust but whether or not it could be sustained would set the future market direction. The talk of incentives for corporate sector in the budget is there but the big players would take some more days to participate in the daily dealings. Karachi stocks on Monday staged a robust recovery under the lead of energy shares on strong short-covering in a highly oversold market aided partly by some positive signals about the corporate incentives in the new budget.
After having hit the session’s low at 6,457.28, the KSE 100-share finished around the day’s peak level at 6,707.56 as compared to previous 6,467.15, up by 240.41 points or 3.72 per cent, adding Rs62 billion to the market capital at Rs1,883 billion. All the leading index shares, notably PTCL, PSO, OGDC, National Bank, Pakistan Oilfields, and Pakistan Petroleum recovered smartly on active short-covering at the lower levels and their lead was actively picked up by the others sectors, leading to a broad-based rally.
“I don’t call it a pre-budget rally but signs are that some of the leading brokers may have found cue to the corporate-related fiscal measures”, some analysts said “some other positive developments including reports of margin financing by some of the banks may be a supporting factor”.
However, the national budget on June 6 could emit some pre-budget leak through well-informed brokerage houses and their lead would be followed by the less-informed leading to sustainable rally. A consortium of leading banks has committed to line up Rs30 billion for margin financing and that could well mean easy money supply at competitive rates, although phasing out of badla in between could take its financial toll.
“But there is no official word on the immediate market irritants, notably increase in free float from the current one per cent to five per cent and inspection of accounts of 10 leading brokerage houses”, dealers said.
The low volume reflects investors are holding on to their positions anticipating the advent of strong pre-budget speculative rally and to sell at the higher levels, they said. Although bulk of the buying was confined to the oil shares, leading shares in other sectors including cement, auto, fertilizer and pharma also performed well on active support.
Oil shares led the market recovery under the lead of Pakistan Refinery, Attock Refinery, PPL, Pakistan Oilfields, PSO and National Refinery, which recovered Rs5.80 to Rs16.25.
Other good gainers included Central Insurance, United Sugar, OGDC, Engro Chemical Fauji Fertilizer, BOC Pakistan, and Al-Ghazi Tractors, up by Rs4.90 to Rs7.50. Losers included Nishat Chunnian, JWD Sugar, Shell Pakistan, Sitara Chemical, Pakistan Cables, and Javed Omer, off Rs3.10 to Rs9.50.
Trading volume fell to 180m shares from the previous 242m shares but gainers held a strong lead over the losers at 188 to 109, with 29 shares holding on to the last levels.
PTCL led the rally despite reports of strike by the workers against its sell-off, up by Rs3.10 at Rs65.95 on 83m shares followed by OGDC, higher by Rs4.25 at Rs89.35 on 37m shares, National Bank, up by Rs4.20 at Rs88.70 on 7m shares, Pakistan Oilfields, higher by Rs11.80 also on 7m shares, and Pakistan Petroleum, firm by Rs7.70 at Rs162.90 on 6m shares.
Other actives were led by D.G.Khan Cement, up by Rs2.35 on 5m shares, Fauji Fertilizer Bin Qasim, firm by 95 paisa also on 5m shares, Lucky Cement, higher by Rs1.20 on 3m shares, Sui Northern Gas, up by Rs1.70 also on 3m shares and Kot Addu Power, higher by Rs1.35 on 3m shares.
FORWARD COUNTER: PTCL was also actively traded on this counter, up by Rs3.15 at Rs66.75 on 7m shares followed by
OGDC, higher by Rs4.21 at Rs89.05 on 4m shares, PSO, sharply higher by Rs16 at Rs344 on 3m shares, PPL, up by Rs7.80 at Rs163.95 also on 3m shares and Pakistan Oilfields, higher by Rs9.50 at Rs150.50 on 2m shares.
UNITED BANK: The share of United Bank suffered a modest fall of Re1 at Rs58.40 on late selling and was last quoted at Rs58.40 after rising to Rs59.75 on 10.267m shares.
DEFAULTER COS: Modest trading was witnessed on this counter but most of the shares finished with fractional gains in sympathy with the ready section. Turnover was light.
DIVIDEND: Shahtaj Sugar Mills, interim cash at the rate of 30 per cent.
