KARACHI, Dec 1: Stocks on Thursday drove bears out of the market as investors made an active short-covering at the overnight lows aided by reports of some positive developments on the corporate front and market talk of higher interim dividends.
KESC remained dormant after the management change, but some analysts predict that its current price status quo may not have any relevance to the changed situation.
The KSE 100-share index recovered a good part of its overnight loss and was quoted higher by 54.60 points at 9,080.53 as compared to 9,025.93 a day earlier, as leading base shares, notably National Bank, MCB and OGDC rose from the recent lows.
The index earlier crossed the barrier of 9,100 at 9,101.24, about 75 points higher than the overnight close on covering purchases triggered by reports that the Security and Exchange Commission of Pakistan (SECP) has withdrawn the Tuesday’s directive asking bourses to elect non-member chairmen instead of the existing practice of election by directors.
But some stock analysts claimed that the SECP had not withdrawn the directive but only deferred it for 21 days to meet the legal demand before it become effective.
On Wednesday, the market dropped by 110 points on selling prompted by brokers apparently as a mark of protest against the SECP directive.
“Another long drawn battle may be around between the bourses and the SECP after the latest directive is implemented,” analysts said. ”With managing director already being a non-member, a non-member chairman could mean uncrowning of the five decades of broker rule on the stock markets.”
A tussle to have a say in the power corridor of the exchanges in the coming weeks could lead to further price erosions on renewed selling. Annual election for the KSE directors is due on Dec 15.
Thursday’s rally, therefore, appeared to be a bit fragile as fears of developing situation on the chairman issue could trigger sell-stops in a bull market, they said.
Leading gainers were led by National Refinery and Unilever Pakistan, up Rs13.25 and Rs30, respectively, followed by Clover Pakistan, Dawood Hercules, Pakistan Oilfields, Lakson Tobacco, MCB, Jahangir Siddiqui & Co and International Industries, which posted gains ranging from Rs5.05 to Rs8.
Prominent losers were led by Arif Habib Securities, HinoPak Motors, Berger Paints, Shezan International, AKD Securities, Colgate Pakistan and Wyeth Pakistan, off Rs4 to Rs15.
Trading volume fell to 336m shares as investors were in two minds about the SECP directive and played safe, but gainers managed to force a modest edge over losers at 176 to 155, with 39 shares holding on to the last levels.
National Bank topped the list of most actives, up Rs3.05 at Rs184.45 on 45m shares, followed by DG Khan Cement, off 75 paisa at Rs108, on 37m shares, OGDC, higher by Rs1.50 at Rs111.25 on 24m shares, Fauji Fertilizer Bin Qasim, steady by 15 paisa at Rs37.15 on 20m shares, MCB, higher by Rs5.70 at Rs162 on 9m shares and Pakistan Cement, up one rupee at Rs16 on 16m shares.
Other actives were led by Fauji Cement, lower 25 paisa on 15m shares, Bank of Punjab, easy 20 paisa on 14m shares, Lucky Cement, lower 50 paisa on 11m shares, and Bank Alfalah, lower 40 paisa on 8m shares.
FORWARD COUNTER:
MCB came in for fresh strong support and rose by Rs6.35 at Rs163.75 on 35m shares, followed by DG Khan Cement, off one rupee at Rs110 on 13m shares and National Bank, up Rs2.05 at Rs187.05 on 12m shares.
Other actives included Bank of Punjab, lower 95 paisa at Rs101.50 on 6m shares and Fauji Fertilizer Bin Qasim, easy 25 paisa at Rs37.95 also on 6m shares.
DEFAULTER COS: Dandot Cement led the list of actives, lower five paisa at Rs11.95 on 0.323m shares, followed by Schon Modaraba, up by the same amount at Rs1.20 on 0.108m shares, others were modestly traded.
Morafco Industries remained under pressure and fell by another Rs2.70 at Rs51.45, while Trust Brokerage and Chenab Textiles rose by one rupee and Rs1.40 at Rs9.75 and Rs29.75, respectively.
