KARACHI, May 3: Stocks on Wednesday finished with extended gains as investors continued to build up long positions on selected counters followed by some positive reports of new financing mechanism by the next month replacing the existing CFS.
But the immediate stimulating factor behind the extension of run-up was the market’s oversold position and attractively lower levels lured investors back in the arena, brokers said.
The KSE 100-share index rose further by 155.56 points or 1.34 per cent at 11,728.14 points as compared to 11,572.58 earlier, reflecting the strength of leading base shares, notably OGDC, Pakistan Petroleum and National Bank.
The market, therefore, maintained its upward drive on active follow-up support triggered by reports that a new product is being considered by the SECP and banks to replace the current Continuous Funding System, which ends on May 31.
Under the CFS, funding in the forward counter is capped at Rs25 billion in an apparent effort to check abnormal speculation in any of the scrips. There are strong rumours that it will be either done away with or banks will be allowed to directly arrange finances for the prospective investors at market interest rates.
“Operating under a capped investment regime do curb speculative activity reminiscent of March 2005 market crash but at the same time it has chained genuine investors to go beyond the ceiling, which sometimes works against their financial interests,” analysts said.
However, it was too early to say something about the new financial product. Initial market reaction shows it would be widely welcome in whatever form it is introduced sans the CFS, they said.
“It is too early to speculate whether the current run-up could be sustained in the coming sessions as some of the negative political factors have crept into the share business and only next couple of sessions will tell the future share business outlook,” some brokers said.
Oil, bank and cement sectors, which had received massive battering during the last week, again set the market trend followed by active short-covering at the lower levels.
OGDC, Pakistan Petroleum, DG Khan Cement, Lucky Cement, National Bank, MCB, Bank of Punjab and PTCL were leading among the most active scrips, which finished with sharp extended gains.
Millat Tractors along with other auto shares and Nestle Pakistan were leading among the gainers, up Rs15.25 and Rs25, respectively, followed by Attock Petroleum, Pakistan Hotels, Honda Atlas Cars, followed by higher bonus shares of 70 per cent, Arif Habib Securities, Lakson Tobacco, Engro Chemical and Atlas Honda, up by Rs6 to Rs10.25.
Losers were led by Dawood Hercules, Siemens Pakistan and Wyeth Pakistan, off Rs18.15 to Rs82.50. Other prominent losers included EFU General Insurance, Sapphire Fibre, Shell Pakistan, PNSC, Ghani Glass and Island Textiles, off Rs3 to Rs6.45.
Trading volume rose to 356m shares from the previous 247m shares as gainers held at strong lead over losers at 196 to 134, with 47 shares holding on to the last levels.
OGDC topped the list of most actives, higher by Rs2.65 at Rs164.95 on 88m shares, DG Khan Cement, sharply higher by Rs5.75 at Rs121.30 on 43m shares, National Bank, up Rs2.50 at Rs269 on 26m shares, Lucky Cement, higher by Rs5.75 at Rs121.30 on 21m shares, Pakistan Petroleum, higher by Rs4.80 at Rs284.20 on 21m shares, and PTCL, firm by 75 paisa at Rs56.15 on 13m shares.
Other actives included MCB, steady by Rs2.60 at Rs248.10 also on 13m shares, Fauji Cement, up 65 paisa also on 13m shares and Nishat Mills, higher by Rs4.50 on 9m shares.
DEFAULTER COS: Active trading was also witnessed on this counter as a section of investors played on both sides of the fence indulging in alternate bouts of buying and selling.
Among the actives, Dandot Cement posted a fresh gain of 25 paisa at Rs16.25 and accounted for 0.121m shares, while Crescent Standard Bank on the other hand came in for fresh selling and was marked down by 55 paisa at Rs5.95 on 0.259m shares.
