KARACHI, Sept 8: Stocks on Monday recovered from the previous week’s lows as investors were back on the market followed by reports of an understanding between the MMA and the government on the contentious issues of the LFO.
But the chief inspiring factor behind the recovery was the revival of institutional support at the lower levels in most of the pivotals coupled with a good bit of bargain-hunting ahead of board meetings of some leading companies.
Dividend announcements from Berger Paints, Pakistan Papersack and Thal Jute at 40,50 and 100 per cent plus 25 per cent interim already paid in that order were also on the higher side of the market expectations and proved an aiding positive factor.
The market is yearning for political peace at home as reports of each “understanding between the two” give tremendous boost to investors’ morale who opt for fresh buying,” analysts said.
After having fallen from its recent peak last week, the KSE 100-share index recovered to finish higher by 42.99 points at 4,506.05, well below the day’s best bid of 4539.07. The day’s lowest was touched at 4,463.05, reflecting that the underlying sentiment remained highly volatile. Market capitalization also rose by Rs11.300bn at Rs999.918bn.
Reports that final date for the disinvestment of controlling shares of the oil giant PSO will be fixed in late October after consultation with the Kuwaiti bidder, one of the three short-listed ones, also aided the recovery.
“The LFO deal between the MMA and the government may or may not be signed, the news certainly boost the investor’s morale as was reflected by the today’s rebound,” analysts said. “Opinions are, however, divided on the issue as any deal on the MMA’s terms appears uncertain as it may many things at a stake.”
For the last several months the market is receiving news about the possible deal between the two and reacts bullishly but the reported “step forward on the LFO turns a step backward,” they said.
However, the bulls need some bullish news to drive bears out of the market and the LFO provides a convenient escape route for the both that is the part of the speculative game in stock trading.
Floor brokers said the market had some positive corporate reasons to remain in an upbeat at least for the next couple of weeks as some of the encouraging dividend news were around.
But some others said fears of a big shakeout were still there but if there was relative peace on the political front, it could sustain the current run-up in the months to come.
“In the absence of many gainful investment avenues, stocks are the best and the floating funds could come and go out of them, without having negative impact on their inherent strength,” they said.
Energy and insurance sectors led the market advance as institutional traders covered positions in them followed by some leading second-liners in the cement and other sectors.
Big gainers were led by Unilever Pakistan, Pakistan Oilfields, Pakistan Refinery, ICP SEMF, right shares, which came on the board and were quoted higher by Rs30.05 at Rs30.10, and Javed Omer, which posted gains ranging from Rs13.90 to Rs47.40.
Other prominent gainers included Jahangir Siddiqui & Co, Lakson Tobacco, International Industries, Pakistan Paper Products, PSO, Shafiq Textiles and IGI Insurance, up Rs5 to Rs8.50.
Losers were led by Merit Packages after a 35-per cent dividend, Millat Tractors, Honda Atlas, Atlas Honda, Aventis Pharma, Packages and Siemens Pakistan, off Rs3 to Rs7.
Trading volume showed a modest rise at 470m shares from the previous 426m shares as gainers forced a strong lead over the losers at 237 to 144, with 58 shares holding on to the last levels.
Fauji Cement, one of the recent low-priced current favourites, topped the list of actives, up 55 paisa at Rs13.50 on 55m shares followed by Lucky Cement, higher by 40 paisa at Rs24.90 on 53m shares, PTCL, unchanged at Rs38.50 on 39m shares, Hub-Power, lower 20 paisa at Rs43 on post-final dividend selling on 34m shares and Pakistan Oilfields, whose board will meet on Sept 15, higher by Rs5.40 at Rs391.40 on 26m shares.
Other actives were led by Japan Power, up 35 paisa on 26m shares, PSO, higher by Rs7.65 on 22m shares, Bosicor Pakistan, up Rs2.90 on 20m shares, Pak PTA, unchanged at Rs14.50 on 19m shares and D.G. Khan Cement, up 60 paisa on 17m shares.
FORWARD COUNTER: PTCL came in for active support at the lower and rose by 20 paisa at Rs38.60 on 9m shares followed by PSO, sharply higher by Rs7.35 at Rs292.05 on 6m shares, Hub-Power, up 30 paisa at Rs43.20 on 5m shares and Pak PTA, higher by 30 paisa at Rs14.85 on 2m shares.
DEFAULTER COMPANIES: Active trading was also witnessed on this counter as modaraba shares came in for renewed support on reports of higher earnings.
Schon Modaraba was leading among them, up 55 paisa at Rs2.55 on 1.010m shares followed by Unicap Modaraba, steady 10 paisa at Rs1.70 on 0.181m shares.
Financial Link Modaraba followed them but quoted unchanged at Rs4.20 on 01.71m shares. Others were modestly traded.
DIVIDEND: Dadex Eternit, cash 20 per cent, Sahrish Textiles, right shares at the rate of 40 per cent, EMCO Industries, nil for the year ended June 30, 2003.
BOARD MEETINGS: Prudential Stocks Fund on Sept 9; Maple Leaf Cement on Sept 12; Gatron Industries and Jahangir Siddiqui Investment Bank on Sept 13.