KARACHI, July 30: Stocks on Wednesday recovered from the overnight lows as investors were not inclined to entertain bearish ideas hoping higher corporate profits from some of the leading companies whose board meetings are due in next couple of days.
“The run-up was a judicious blend of both perceptions of a possible breakthrough on the political front after roping in of the MMA and expectations of higher dividend,” an analyst jokingly said.
The KSE 100-share index though finished off the day’s best level of 3,876, at 3,869.95, up 35.40 points but cut short the margin between its next target of 3,900 and then to is onward march to the 4,000.
The notable feature was that some of the shares whose floating stock is short, rising sharply higher under the lead of Wyeth Pakistan, which soared by Rs88.10, Aventis Pharma, Island Textiles and Nestle MilkPak, up Rs7.25, Rs9.80 and Rs14 and so did Javed Omer higher by Rs17.05. And many others are following them.
After two lean sessions, trading volume soared to 460m shares, reflecting that bulls are inclined to push the index to their next chart point of 4,000 within the current week ending on Friday.
There was no trace of the overnight technical correction when the trading resumed as investors flooded the market with fresh buystops followed by reports of higher profits announced by the urea fertilizer giants, Fauji Fertilizer and Engro Chemical whose boards met on Wednesday.
Positive announcement is also awaited from the Faysal Bank whose board meets tomorrow analysts said and predicted a good interim dividend based on higher earnings.
Reports that the government has invited expressions of interest for the sell-off of National Refinery, having an annual refining capacity of 2.4m tons also generated a good of fresh buying in the energy sector and so did the report that a Saudi-based consortium intends to set up $1.4bn coastal refinery as a joint venture with State Petroleum Corporation or the National Refinery.
“There is no dearth of funding as surplus money is floating around like any thing,” says a leading stock broker “what was needed was a relative peace on the local political front and that now appears to be a possibility as the whispering from the MMA reflects.”
But the current run-up or the market’s journey to the index level of 4,000 points largely owes its strength to strong anticipatory buying in the shares whose interim working results are due during the next couple of days.
ICI Pakistan, for instance, whose board meets on Aug 6, is in strong demand and being quoted higher daily thanks to institutional and general buying.
The interesting feature was that about five dozen shares of the defaulter companies whose shares are ruling far below their face values are also being actively traded as a section of investors is indulging in alternate bouts of buying and selling in them on small margin of profits.
Asset Investment Bank, which was quoted around Rs2.50 against its face value of Rs10 is now ruling around Rs6 amid active trading.
Leading gainers were led by Jahangir Siddiqui Bank, 4th ICP, Sapphire Textiles, Artistic Denim, Lakson Tobacco, Pakistan Oilfields, Unilever Pakistan, AKD Securities and National Refinery, which posted gains ranging from Rs4 to Rs10.60.
Shell Gas and Siemens Pakistan were leading among the losers, off Rs8 and Rs20 followed by Mehmood Textiles, Gatron Industries, Cherat Papers, Clover Pakistan, Noon Pakistan, Shezan International and Ghani Glass, off Rs3 to Rs3.50.
Trading volume rose to 460m shares from the previous 383m shares as the advancing shares forced a strong lead over the losing ones at 264 to 163, with 47 shares holding on to the last levels.
Hub-Power topped the list of most actives ahead of its board meeting and ended higher by 45 at Rs40.40 on 71m shares followed by Fauji Cement, higher by Rs1.10 at Rs8.15 on 54m shares, PTCL, up 25 paisa at Rs32.10 on 31m shares,
Dewan Salman, higher by 70 paisa at Rs22.10 on 29m shares and Maple Leaf Cement, up Rs1.05 at Rs.21.15 on 24m shares.
Other actives were led by Japan Power, firm 30 paisa on 21m shares, D.G. Khan cement, steady by 25 paisa on 17m shares, PIAC, lower 25 paisa also on 17m shares, T.R.G. Pakistan, higher Rs1.70 on 15m shares and Dewan Motors, unchanged on 13m shares.
FORWARD COUNTER: Hub-Power was also actively traded on this counter,up 40 paisa at Rs40.80 on 9m shares followed by PTCL, higher 30 paisa at Rs32.45 on 4m shares and Dewan Salman, higher by 70 paisa at Rs22.40 on 3m shares. Engro Chemical showed a fractional fall of five paisa at Rs90.95 on 2m shares, while FFC-Jordan Fertilizer rose 20 paisa at Rs16.70 on 3m shares. ICI Pakistan was leading among the gainers, up Rs1.20 at Rs63.65.
DEFAULTER COMPANIES: Financial Link Modaraba again came in for strong support and rose by Rs1.05 at Rs4.30 on 1.723m shares followed by rumours of management change. Indus Fruits followed it, higher by 60 paisa at Rs4 on 0.510m shares and Quice Foods, up 35 paisa at Rs2.90 on 0.346m shares. Others were also actively traded.