July 20, 2006	Thursday	Jumadi-ul-Sani 23, 1427

KARACHI, July 19: Stocks on Wednesday finished with clipped gains on active profit-selling in National Bank and some others at the higher levels followed by an increase in bank cash reserve requirements to 7 per cent from the previous 5 per cent.

Analysts said the central bank move would drain out massive amounts from the system creating liquidity problems. It would have a negative impact on the profitability of the banks and some problems for their weaker links but it could be short-lived as other basic fundamentals of the banking sector including corporate earnings are terribly bullish.

The jolt is, however, expected to be short-lived as an attractive bait of higher cash payouts and bonus shares by leading among the banks would not allow them to fall from the current levels, they added.

After early having risen by about 80 points, the KSE 100-share index finally finished with a marginal rise of 6.94 points at 10,198.78 as compared to previous 10,191.84, although all the leading base shares finished with extended gain barring OGDC and National Bank. The index touched the session’s high at 10,258.85 and the low at 10,087.96 points.

National Bank came in for active selling and finished slightly above the session’s low of Rs221.50 at Rs224.50 on late short-covering, off Rs4.90. Other leading bank shares followed it on the perception that increase in cash reserve margins would reduce their annual profits.

But the broader market performed credibly well under the lead of leading oil, cement and blue chips on the other counters including PTCL, which appears to be well on the way to its pre-reaction level of Rs60.

Among the gainers, Shell Pakistan and Arif Habib Securities were leading, up by Rs23.75 and Rs23.80. Other prominent gainers included Adamjee Insurance, EFU Life, Thal Jute, Pakistan Oilfields, Pak-Suzuki, Pakistan Cables, Abbott Lab, Glaxo-SKF, Gillette Pakistan, Grays of Cambridge, Shell Gas, Pakistan Refinery, PSO and IGI Insurance, up by Rs5.15 to Rs18.30.

Losers were led by Treet Corporation and Nestle Pakistan, off Rs8 and Rs55 respectively followed by National Bank, Island Textiles, Bhanero Textiles, Gatron Industries, Millat Tractors and KSB Pumps, off Rs3.60 to Rs5.05.Trading volume showed a fresh expansion at 279m shares, progressively rising to its benchmark level of 300m share or above aided by dividend–driven short-covering. Gainers and losers were evenly matched at 154 to 152, with 35 shares holding on to the last levels.

The most active list was topped by OGDC, lower 50 paisa at Rs137 on 35m shares, followed by Pakistan Petroleum, higher by Rs3.20 at Rs234.20 on 24m shares, National Bank, off Rs4.90 at Rs224.50 on 22m shares, WorldCall Telecom, steady by 65 paisa at Rs11.75 on 21m shares, D.G. Khan Cement, up by Rs1.15 at Rs95.30 on 20m shares, PTCL, higher by 25 paisa at Rs42.50 on 17m shares and Pakistan Oilfields, up by Rs7.05 at Rs345.95 on 14m shares.

Other actives were led by Fauji Cement, steady by 15 paisa on 18m shares, Lucky Cement, up by Rs1.20 on 10m shares and Dewan Cement, firm by 15 paisa on 10m shares.

FORWARD COUNTER: OGDC also came in for modest selling and was marked down by 20 paisa at Rs137.30 on 8m shares followed by Pakistan Petroleum, higher by Rs4.20 at Rs235.70 on 7m shares, Pakistan Oilfields, higher by Rs7.10 at Rs346.20 on 6m shares.

National Bank fell by Rs5.30 at Rs224.50 on 6m shares and D.G. Khan Cement, up by 85 paisa at Rs96.60 on 5m shares. Others were modestly traded mostly on the higher side.

DEFAULTER COS: Mixed prices trend was seen on this counter as investors played on both sides of the fence indulging in alternate bouts of buying and selling. There was, however, no big deal in any of the shares.

DIVIDEND: Fayzan Modaraba, second interim 3.4pc, Abbott Lab, bonus shares at the rate of 20pc.

BOARD MEETINGS: Kohinoor Sugar on July 24, PICIC Commercial Bank on July 25, and Merit Packaging on July 26.