KARACHI, Dec 18: Stocks on Thursday recovered from the recent lows followed by active short-covering at the lower levels apparently ignoring the possible negative fallout of the deadlock over the LFO issue and the MMA’s anti-government movement.
Analysts said investors were expected to closely follow the momentum of the campaign during the next couple of sessions and would decide their future line of action in its light. For the time being there was no immediate bearish reaction to the LFO deadlock, they said.
After having fallen during the last couple of sessions, the KSE 100-share index staged a smart recovery on the strength of leading base shares and recovered to finish higher by 27 points at 2,466.89 as compared to 4,239.89 a day earlier.
Cement shares led to the market advance on reports of higher export to Afghanistan followed by leading base shares, notably Hub-Power, PTCL and some others, including auto scrips.
“The snap rally could be inspired in apparent effort to show that the market may ignore the MMA’s movement,” says a leading broker, adding “but that may not be correct assessment of the post anti-government drive as anything could happen after people decide to protest on certain national issues.”
Essentially, being highly sensitive to negative external developments, notably domestic political turmoil, the market remained volatile as investors withdrew to the sidelines, he says.
The government did not table the agreed constitutional package in the parliament as demanded by the MMA apparently allowing it to demonstrate its street power through protest meetings.
However, the government’s resolve to meet the MMA threat through its official machinery may not be an ideal solution of the issue as it involves highest political risks, analysts said.
“The situation may get out of hands after people come out to protest and the MMA is capable of doing that,” they said, adding “investors are worried over the showdown and are readjusting their positions according to their future market perceptions.”
The future market outlook will largely depend on the fallout of the MMA drive and its intensity and how it attracts public response.
Prominent gainers were led by blue chips such as IGI, Clariant Pakistan, Dawood Hercules and Unilever Pakistan, up by Rs6 to Rs18. Other good gainers were led by Blessed Textiles, Burewala Textiles, Pakistan Oilfields, Bolan Castings, BOC Pakistan and National Foods, which posted gains ranging from Rs3 to Rs4.50.
Leading losers included Parke-Davis, which fell by Rs15 followed by 13th ICP, Javed Omer, Dewan Textiles, Gul Ahmed Textiles, Mari Gas, Al-Ghazi Tractors, Merit Packaging, Packages and Pakistan Services, which suffered fall to the extent of Rs2 to Rs2.50. Reports that Unilever Pakistan has announced to sell its vanaspati ghee facilities, its products being marketed under the brand name of “Dalda” for the last over five decades, were received with mixed reaction.
Dalda has about 19 per cent of the total market share, but profit margins had been declining for the last several year owing to tough local competition. It reflects the general conditions of the ghee industry. Trading volume fell to 211m shares from the previous 233m shares as the advancing shares forced a strong lead over the losing ones at 161 to 131, with 56 shares holding on to the last levels.
The most active list was topped by Hub-Power, up 45 paisa at Rs39.25 on 22m shares followed by Dewan Motors, higher by Rs1.35 at Rs34.55 also on 22m shares, Fauji Cement, higher by 30 paisa at Rs11.25 on 20m shares, Maple Leaf Cement, higher by 20 paisa at Rs31.45 on 19m shares, D.G.Khan Cement, up 55 paisa at Rs44.90 on 18m shares.
Other actives were led by Sui Southern Gas, steady 15 paisa on 14m shares, PSO, higher by Rs1.55 on 11m shares, Chakwal Cement, up 70 paisa on 10m shares, FF Bin Qasim, unchanged on 9m shares and Pakistan Oilfields, higher by Rs3.20 on 8m shares.
FORWARD COUNTER: OGDCL led the list of actives on this counter, up 70 paisa at Rs53.35 on 61m shares followed by PSO, higher by Rs2.05 at Rs278.50 on 5m shares and Hub-Power, higher by 35 paisa at Rs39.30 also on 5m shares.
They were followed by FF Bin Qasim, lower 10 paisa at Rs17.95 on 4m shares, PTCL, easy 10 paisa at Rs35.20 on 2m shares and Fauji Fertilizer, higher by Rs1.10 at Rs90.30 on light turnover.
DEFAULTER COMPANIES: Most of the shares followed the lead of the ready counter and generally finished with fractional gains amid slow trading. Turnover figures were light as investors made selective covering purchases.
DIVIDEND: Zahidjee Textiles, cash 7.5 per cent; Glamour Textiles, Saleem Denim and Ahmed Spinning, all nil for the year ended Sept 30, 2003.
BOARD MEETINGS: Kohinoor Energy on Dec 21; Star Textiles on Dec 23; Sindh Abadgar’s Sugar, LTV Modaraba, Suraj Cotton, Shams Textiles, Ahmed Hassan Textiles, Burewala Textiles and Regent Textiles, all on Dec 24.