KARACHI, May 14: Stocks on Wednesday staged a broad recovery followed by active short-covering in most of the blue chip shares at the lower levels lifting the market capitalization to a new record figure of Rs657 billion amid light trading.
The surpassing of the previous all-time peak level of Rs654 billion established early this year at Rs657 billion signals a major change in the investor perceptions of the future market outlook. It could well prove a prelude to the entry of leading foreign equity traders into the local market and the credit for this will largely go to the heavily capitalized shares, analysts predict.
Most of the leading foreign funds start operations in the bourses having a market capitalization at least of $20 billion and the current move appears to be achieving this end, they added.
The shifting of the PSO sell-off bidding date to the first quarter of the next financial year seems to have encouraged institutional traders to mop up its floating stock at the prevailing lower levels, analysts said, adding and that “in turn evoked sympathetic buying in other energy shares and blue chips on the other counters.”
“No one could precisely fathom their (market players) operational strategy as they are at liberty to make positive news as negative and negative as positive as they did in the case of PSO,” they said.
Leading among them are expected to play with the PSO-episode for the next couple of weeks and for good reasons too, and indications are that they will keep the market in a good shape also, they added.
The KSE 100-share index recouped most of the previous losses and rose to finish higher by 22.53 points at 2,987.67, reflecting the relative strength of the leading base shares.
“It is a very unusual performance viewed in the backdrop of Thursday’s closure,” one broker commenting on the market’s terribly sluggish trading said. “Return of the leading financial institutions though on selected counters changed the market psychology.”
But some others attributed the return of the bull market to clearance of an air uncertainty over the issue of sell-off of the PSO’s controlling shares to one of the short-listed bidders.
According to official sources, the bidding date had been extended to the first quarter of the next financial year, which in turn allowed investors to take new positions after refixing their investment priorities.
Political background news were divided, which could have their toll if investors did not fathom promptly their likely impact on the future stock trading.
“Despite some reservations on the Indian peace moves, their impact on the market is positive,” brokers said, adding “but what worried them some of the LFO related irritants and their fall-out on the market.”
Leading gainers included IGI Insurance and Wyeth Pakistan, which rose by Rs8.25 to Rs34, followed by Javed Omer, IGI Insurance, Burewala Textiles, Dawood Cotton, Gul Ahmed Textiles, Shell Gas, Shell Pakistan, Atlas Battery, Millat Tractors, Pakistan Cables, and Packages, up Rs3 to Rs7.
Most of the MNCs also posted good gains ranging from Rs3 to Rs6 for Abbott Lab, Clariant Pakistan, Colgate Pakistan, Glaxo-SKF and Reckitt and Benckiser on active support.
Siemens Pakistan and Unilever Pakistan fell by Rs9.05 and Rs10. The selling in Unilever Pakistan was attributed to reports that Tata group of companies will operate on the local market in tea business through the Lakson group. Jahangir Siddiqui & Co, Noon Pakistan and Ghani Glass also suffered fall ranging from Rs2 to Rs2.45.
Traded volume fell to 122m shares owing to closure ahead as compared to previous 178m shares, but advancing shares held a strong lead over the losing ones at 227 to 133, with 59 shares holding on to the last levels.
Sui Northern Gas topped the list of actives, up 45 paisa at Rs31.10 on 20m shares followed by PTCL, higher 25 paisa at Rs25.50 on 19m shares, Hub-Power, easy five paisa at Rs34.65 on 10m shares, PSO, higher by Rs1.65 at Rs206.75 on 9m shares, D.G. Khan Cement, firm by 15 paisa at Rs16.85 on 7m shares and Bosicor Pakistan, higher 80 paisa at Rs15.75 on 7m shares.
Other actives were led by Kohinoor Textiles, higher by Rs1.20 on 5m shares, Dewan Salman, firm 35 paisa on 4m shares, WorldCall, up 20 paisa on 3m shares and Lucky Cement, unchanged also on 3m shares.
FORWARD COUNTER: PSO also came in for active support on the forward counter and recovered Rs1.90 at Rs207.40 on 6m shares followed by Hub-Power, firm by 10 paisa at Rs34.80 on 6.503m shares.
Sui Northern Gas maintained its upward drive on reports of higher earnings and recouped overnight loss at Rs31.10, up 75 paisa on 5m shares, PTCL, higher 15 paisa at Rs25.40 on 4m shares and Pak PTA, steady by 25 paisa at Rs8.95 on 0.579m shares.
DEFAULTER COMPANIES: Over two dozen shares of various companies came in for active trading and generally tended higher under the lead of S.S. Oils, up 45 paisa at Rs5.50 on 68,000 shares, followed by Medi Glass, up 10 paisa at Rs2.10 on 47,000 shares. Sahrish Textiles was traded unchanged at Rs2 on 40,000 shares and so did some other amid active two-way trading.
BOARD MEETINGS: Alhamd Textiles, Premium Textiles on May 16; Gadoon Textiles, Shahtaj Sugar Mills, Shahtaj Textiles, Ishaq Textiles on May 19; Ibrahim Fibre on May 21; and Ahmed Spinning on May 26.