KARACHI, Nov 2: Stocks on Wednesday staged a snap recovery on active short-covering aided by reports that the PTCL deal is back on rails after early week’s meeting in Dubai on the unresolved issues between the Pakistani team and Etisalat management.
The sudden boost in the market sentiment reflects how investors react to positive and negative news about the PTCL sale deal and their stake in it.
The pre-Eid holiday rally could be carried over to next trading week if all goes well on the second round of crucial PTCL talks, analysts said.
But some others said the rebound appears to be “inspired” aiming at bailing out some of the massively trapped investors and brokers in the twilight of the PTCL deal.
Reports that talks on the unresolved issues delaying the completion of the PTCL transaction would be resumed after Eid in Dubai and both the parties expect a consensus formula to end the impasse triggered a good bit of covering purchases on the blue chip counters and the consequent snap change in the market trend.
The KSE 100-share index recovered 189.34 points or 2.30 per cent at 8,436.62 as compared to previous 8,247.34 as leading base shares virtually raced towards their pre-reaction levels. Market capital also recovered Rs51.296bn at Rs2,406.749bn as heavily-capitalized shares rose sharply higher on active buying at the lower levels.
PTCL itself recovered from its recent lows and finished 95 paisa higher at Rs58.15 after having hit at one stage the day’s peak level of 58.90. Early it fell to Rs56.50 on selling.
Higher corporate earning reports did evoke a lot of interest on those counters but pre-holiday selling on selected counters dominated the trading and for good reasons too. No one was inclined to take even a calculated risk in view of the developing situation on the economic front, notably central bank’s warning about the growth targets in the backdrop of a devastating earthquake in the northern areas and massive losses.
A 60 per cent interim cash dividend by the oil giant PSO and 20 per cent bonus shares by the PICIC and higher earnings reported by some of the leading cement shares under the lead of D.G.Khan Cement. Leading bank shares also came in for active support and raised hopes that the worst is over at least for the near-term.
Although a section of investors was not enthused by the latest reports that the PTCL deal is back on the track, renewed selling in it was halted as some of them thought it a good buy below its benchmark price of Rs60.
“Reports from Dubai about the PTCL-Etisalat deal are positive as talks on the unresolved issues will be resumed after Eid holidays but a section of investors is still doubt about the final outcome”, analysts said.
Speculative forces, notably those who are trapped above Rs60 were hopeful that the deal could get through and that was why were holding onto their unsold positions built up at the higher levels in anticipation of capital gains after the highest bidder makes the final payment.
Leading gainers were led by Pakistan Refinery and Attock Petroleum, up Rs12.50 and Rs12.30, followed by National Bank, IGI, Mustehkam Cement, Attock Refinery, Shell Pakistan, Indus Motors, Siemens Pakistan, Berger Paints, Nestle Pakistan, Colgate Pakistan, United Sugar, and many others, up by Rs6 to Rs11.80.
Losers included Rafhan Maize and Pakistan Cables, off Rs27.05 and Rs6 respectively. Other prominent losers included Javed Omer Indus Dyeing, Atlas Honda, Millat Tractors, Atlas Battery and PNSC, off Rs3 to Rs6.
Trading volume rose to 252m shares from the previous 234m shares as gainers held a strong lead over the losers at 207 to 78, with 30 shares holding on to the last levels.
PTCL led the list of actives, up by 95 paisa at Rs58.15 on 34m shares followed by D.G.Khan Cement, higher by Rs1.65 at Rs94.30 on 29m shares, Fauji Cement, higher by Re1 at Rs20.60 on 26m shares, MCB, up by Rs5.10 at Rs151.90 on 18m shares, Bank of Punjab, higher by Rs3 at Rs94.50 on 17m shares, National Bank, up by Rs7.65 at Rs160.75 on 13m shares and OGDC, up by Rs2.70 at Rs107.40 on 11m shares. Other actives were led by Pakistan Petroleum, higher by Rs3.25 at Rs201.90 on 9m shares, Pakistan Oilfields, up by Rs9.40 also on 9m shares and Nishat Mills, higher by Rs4.40 on 7m shares.
FORWARD COUNTER: PTCL also led the list of actives on this counter, up by Re1 at Rs58.75 on 10m shares followed by D.G.Khan Cement, higher by Rs1.65 at Rs95.90 on 7m shares and Bank of Punjab, up by Rs2.35 at Rs95.75 on 6m shares.
Other actives included National Bank, up by Rs7.75 at Rs163.20 on 5m shares and MCB, up by Rs4.60 at Rs153.30 also on 5m shares. Others were also traded higher on light volume.
DEFAULTER COS: Modest activity was witnessed on this counter where prices also rose amid modest turnover. Morafco Industries and Ghandhara Industries were leading among the gainers, which posted gains of Rs2.75 to Rs2.90 at Rs57.90 and Rs63.50 respectively.