Stocks shrug off weekend hesitancy, gain 104 points
By Our Staff Reporter
KARACHI, Oct 2: Stocks on Monday shrugged off the weekend hesitancy as investors made active covering and speculative buying in half a dozen small banks still ruling at an attractively lower levels triggered by reports of merger and acquisition in the backdrop of presence of foreign support. The KSE 100-share index finished with a smart gain of 104 points at 10,616.
“Bank shares were in a virtual turmoil amid violent fluctuations as a section of investors tried to squeeze the floating stock of some of them followed by rumours of presence of strong foreign support to buy their controlling shares,” floor brokers said.
In earlier trading, some of them were traded around their upper limit of circuit-breakers, notable among them being Faysal Bank, Bank Alfalah, PICIC Commercial Bank, and Khyber Bank. But late selling allowed them to close with clipped gains.
Trading resumed on a higher note as investors covered positions at the lower levels aided partly by the extension of in-house financing facility up to Nov 30 and partly to stray dividend-driven buying in bank and cement shares.
The perception that there may not be a shortage of funds at cheaper rates as the Continuous Funding System (CFS) amounting to Rs55 billion will be fully operative by the expiry time of the in-house financing, analysts said.
“Although the opening of the national saving schemes for the non-banking institutions could have negative impact on the future share business, taking long-term view of the official move investors relied on other aiding news and did not take its negative view for the near term,” stock analyst Ahsan Mehanti said.
The KSE 100-share index, therefore, ended the session with a gain of 103.75 points at 10,616.24 points as compared to 10,528.69 at the last weekend, as leading base shares ended further higher under the lead of PICIC, Nishat Mills and National Bank.Apart from higher corporate announcements, including cash dividend and bonus shares even by some of the smaller group of companies and reports of encouraging interim earnings, investors are also enthused by reports of foreign interest in some of the local banks, notably sponsored by the foreign investors, stock analyst Zia Javed said.
“Sell-off of the Union Bank in the recent past to Standard Chartered Bank seems to have opened floodgate of foreign offers for some others, which may not necessarily be operating in the red but some other reasons,” he added.
According to market sources, owing to a higher competition in the local banking system and despite a massive rise in the reserves and earnings of some of the leading among them, smaller ones are said to be feeling the pinch of a limit to their manoeuvring capacity.
However, the new oil and gas finds are expected to keep the oil sector in a positive mood in the coming weeks irrespective of the sluggishness associated with the holy month of Ramadan.
“It was perhaps for the first time that the stock market emitted bullish sparks during the holy month as investors could not ignore an attractive bait of positive news, which followed in quick succession,” says a leading stock analyst Faisal Abbas.Leading gainers were led by Pak-Suzuki Motors and Lakson Tobacco, up by Rs10.55 and Rs10, respectively, followed by Union Bank, MCB, IGI, Dawood Hercules, United Bank, Pakistan Cables, Colgate Pakistan and Millat Tractors, up by Rs4 to Rs9.
Top losers included Wyeth Pakistan and Attock Petroleum, off Rs51 and Rs9, respectively. Other prominent losers were led by Premier Sugar, Jahangir Bank, National Refinery, Pakistan Engineering, Mitchell’s Farm Fruits, National Foods and AKD Securities, off by Rs3 to Rs7.50.
Trading volume rose to 181m shares from the previous 151m shares as gainers held a comfortable lead over losers at 148 to 125, with 37 shares holding on to the last levels.
PICIC topped the list of actives, higher by Rs3.05 at Rs76 on 17m shares, followed by National Bank, up Rs2.75 at Rs256 also on 17m shares, Fauji Cement, firm by 20 paisa at Rs21.50 on 10m shares, WorldCall Telecom, steady by 60 paisa at Rs12.05 on 9m shares, DG Khan Cement, unchanged at Rs96 on 9m shares, Pakistan Petroleum, easy by 50 paisa at Rs234.50 on 7m shares and PTCL, off 40 paisa at Rs40.75 on 6m shares.
Other actives were led by Fauji Fertiliser Bin Qasim, firm by five paisa on 8m shares, Nishat Mills, higher by Rs2.10 on 7m shares, and Sui Southern Gas, up Rs1.35 also on 7m shares.
FORWARD COUNTER: MCB came in active support on the forward counter and was quoted higher by Rs6 at Rs262 on 10m shares followed by PICIC, higher by Rs2.45 at Rs69.45 on 6m shares and National Bank, up Rs2.85 at Rs258.75 on 4m shares.
OGDC followed them, higher by 75 paisa at Rs129.55 on 3m shares, and Bank of Punjab, higher by Rs1.25 at Rs87.95 also on 3m shares.
DEFAULTER COS: Norrie Textiles again came in for active support and rose by one rupee at Rs5 on 1.716m shares, followed by Crescent Standard Bank, up 30 paisa at Rs3.85 on 8m shares, and Unity Modaraba, lower by five paisa at 70 paisa on 0.211m shares. Quice Food was marked up by One rupee at Rs4.20 on 0.202m shares.
DIVIDEND: Sui Southern Gas, cash 13 per cent, Sui Northern Gas, cash 30 per cent, bonus shares 10 per cent, Shahtaj Textiles, cash 20 per cent, Kohat Cement, 10 per cent, Kohinoor Weaving, bonus shares 10 per cent, Sitara Chemical, cash 60 per cent, Allwasaya Textiles, cash 37.50 per cent or Rs3.75 per share, Pioneer Cement, cash 10 per cent, bonus shares 4.51 per cent, Pakistan Hotels cash 35 per cent, and Gul Ahmed Textiles, right shares at the rate of 20 per cent.
