KARACHI, Aug 1: Stocks on Monday opened on a positive note boosted by positive developments on the COT front but failed to sustain initial gains on late selling triggered by the weak-holders and jobbers at higher levels. The KSE 100-share index recovered 16.39 points at 7,195.32 after several lean sessions. Although some of the steps announced by the prime minister’s adviser on finance in last Friday’s press conference, including an increase in badla financing limit to Rs25 billion from Rs12 billion and stern warning to brokers to end double financing, met some of the broker demands, they seem to have fallen short of their expectations. No official word on the extension or otherwise of badla did worry investors.

Trading volume, therefore, fell to a three-year low at 50m shares, as leading investors and brokers have an overview of the end of the post-double badla financing scenario, if it is actually implemented. “It appears to be a tactical broker move, reflecting pressure on money supply,” some insiders say, but add that the problem lies somewhere else.” This was well reflected in the turnover figure, which also fell to the lowest level of 21m shares from the previous 87m shares, as there was “no money to buy shares”.

The KSE 100-share index recovered 16.39 points at 7,193.32 as compared to 7,178.93 of last Friday. The session’s lowest and the highest were touched at 71,64.77 and 7,228.79, respectively, reflecting a divergent investor reaction to the steps announced by the prime minister’s adviser to boost stock trading.

The last Friday’s high-powered meeting, chaired by the prime minister’s adviser on finance, accepted some of the recommendations of the Shaukat Train committee set up to suggest steps to pull the market out of the protracted sluggishness, which also included the elimination of double badla financing and an increase in the limit of its financing.

“But there was no official word on the extension of badla financing and this silence intrigued brokers to have another view of the entire situation on the COT,” some analysts said.

The two steps agreed upon by the participants could go a long way to remove some of the market’s current irritants if implanted judiciously, says a leading broker. “But there could be many a slip between the lip and the cup in the typical Pakistani market conditions.”

However, the important milestone could well be the implementation of the above two measures, but “whether or not brokers will be willing to honour client buying orders without matching security deposits,” they said, questioning that “who will be responsible if the client default on payments?”

“The simple issue has been complicated beyond its scope,” another said. ”Right, the government is inclined to do away with badla, but steps should have been taken well ahead to create alternate fund supply lines before the dust was raised.”

“I don’t think the dust will settle down that easily as the official thinking reflects,” he said. “The contenders are not that weak and they could add significantly to the dust already raised.”

Shell Pakistan on higher sales and Valika Fabrics were leading among gainers, up Rs18.90 and 28.00, respectively, followed by Arif Habib Securities, Premier Sugar, Packages, BOC Pakistan, Crescent Steel, EFU Life and AKD Securities, up by Rs3 to Rs17.

Losers were led by Javed Omer and Atlas Honda, off Rs13.15 and Rs14, respectively, followed by Al-Ghazi Tractors, Treet Corporation, Nestle MilkPak, PNSC, Sitara Chemicals, United Sugar and Security Papers, off by Rs4 to Rs6.35.

In a lightly traded session, losers maintained a strong lead over gainers at 168 to 105, with 29 shares holding on to the last levels.

PTCL topped the list of most actives, up 20 paisa at Rs60.60 on 10m shares, followed by OGDC, higher by 75 paisa at Rs102.35 on 6m shares, National Bank, firm by 55 paisa at Rs106.20 on 4m shares, Fauji Fertilizer Bin Qasim, up 40 paisa at Rs29.15 on 4m shares, Pakistan Oilfields, higher by 60 paisa at Rs304.60 on 3m shares, Pakistan Petroleum, up Rs2.90 at Rs169.30 also on 3m shares and PSO, off 2.70 at Rs370.85 on 2m shares.

Other actives included Pakistan Fund, easy five paisa on 2m shares, Calimate Telips, off 50 paisa on 1m shares, and DG Khan Cement, lower 25 paisa also on 1m shares.

FORWARD COUNTER: After having fallen sharply lower during the last three weeks, Pakistan Petroleum resumed its upward drive and rose by Rs2.50 at Rs171 on 6m shares. It has fallen from Rs224 to Rs168 on selling triggered by rumours but denied by the management about the failure of its offshore drilling operations.