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AFTER previous technical correction, stocks last week resumed their upward drive on active short-covering at the lower levels aided partly by foreign fund buying on some of the banking counters.
MCB, Bank Alfalah and Bank of Punjab shares were major attraction for foreign fund buying amid rumours that some of them intend to have a stake in one of them.
MCB’s final payout of 15 per cent cash and 15 per cent bonus shares and an EPS at Rs23.40 was said to be in line with analysts’ predictions, which, in turn, sustained current run-up of its share value. A 60 per cent interim by the PSO triggered price flare-up in its share, which was last quoted at Rs358.75.
Higher final and interim dividend and bonus shares by some of the leading banks and oil companies dominated trading on the stock market but the buying lacked aggressiveness linked to a bull-run.
The KSE 100-share index was quoted higher by 228.44 points at 11,607.84. The KSE 30-shar index rose by 368.58 at 14712.76. Some of the leading shares, notably PSO, Bank Al-Habib, Mari Gas, Bata Pakistan, OGDC, Al-Ghazi Tractors and BOC Pakistan witnessed price flare-up in post-dividend trading sessions.
Highlight of the week was provided by steep increase in the share value of MCB ahead of its board meeting on the weekend session followed by reports of higher final dividend plus bonus shares.
After remaining static below Rs290, it virtually rose by Rs20 and finished well above the Rs300 mark at Rs313. Whether or not National Bank, whose board will meet on Feb 24, could match its performance will be seen by the next trading week.
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Analysts predict higher dividend announcements by some other leading companies, which could sustain the current market run-up in coming weeks also at least by the end of March.
But the daily trading volume failed to match the mounting buying orders amid fears that the implementation of the risk management measure known as the Client-Level Netting may raise exposures of both sellers and buyers and curtail the activity.
Although turnover figure remained light, but price flare-up on some counters in post-dividend trading kept the investors’ interest intact most of whom held on to their positions rather selling their holdings.
Stocks were, therefore, back on the rails after having passed through a technical correction as investors covered positions at the attractively lower levels on most of the blue chip counters during trading sessions.
The notable feature was that it stood well above its crucial level of 11,500 points, signalling that it could rise further in coming sessions on the strength of upcoming higher payouts by some of the leading companies.
All the leading base shares, notably, National Bank, Pakistan Petroleum, D.G. Khan Cement and some others, virtually raced to their pre-reaction levels on active short-coverings.
“I don't think bears can reinforce their writ any more on stock trading as bulls have the will and financial resources to fight back at lower levels not for capital gains alone”, leading analyst Ashraf Zakria believes.
Foreign buying, which had withdrawn to the sidelines at the fag-end of the last week, of course, taking profits at the higher rates, resumed its moping up operations at the dips on selected counters, he added.
“In the backdrop of higher payouts by the United Bank and Askari Bank, all eyes are now focused on the National Bank board meeting due on Feb 24”, another analyst Ahsan Mehanti said.
The big question debated among analysts is: “Whether or not its board would announce bonus shares with a cash payout, but no one among them is clear.
FORWARD COUNTER: MCB ahead of its board meeting led the list of actives on this counter and rose sharply higher followed by National Bank, and Pakistan Petroleum. OGDC, Pakistan Petroleum, PTCL and Bank Alfalah also finished on the other side amid active trading.—Muhammad Aslam
