KARACHI, Sept 12: Investors on Tuesday welcomed the increase in the Continuous Financing System (CFS) but gave a cautious reaction to the ban on in-house financing and short-selling on the perception that it could lead to another impasse in the weeks to come.

A sharp increase of 264.40 points in the KSE 100-share index, which breached through the barrier of 10,000 points at 10,157.17, however, reflects that investors have not fully analysed the long-term impact on their manoeuvring as well as the market’s vulnerability.

A massive raise of more than double in the CFS limit to Rs55 billion from the previous Rs25 billion, however, sent a wave of optimism among the investors who enthusiastically participated in trading.

The increase in the CFS limit, among others, has been a major demand of investors and the last couple of sessions’ falling volumes seem to have sent an SOS to the relevant quarters followed by a quick decision on the issue, Faisal Abbas, a leading stock analyst, said.

The chief official move behind the increase appears to be to check in-house financing, which leads to market manipulation after a steep rise in the rates by badla financiers leading to the market collapse, some others said.

“What the SECP has given by one hand has taken away by the other,” another stock analyst Ahsan Mehanti said while commenting on the CFS increase. “With the existing ban on short-selling, many may not like to part with an attractive bait of in-house financing being major source of income after the Oct 2 ban on it.”

However, the immediate reaction to some of the steps taken by the SECP to boost stock market was positive, but some analysts warned investors in the name of sanity to play safe until their impact is fully absorbed.

The market has been facing liquidity crunch owing to various reasons as was reflected by terribly low volumes during the last couple of sessions including Monday’s 60m shares, as investors have not enough liquid funds to make fresh purchases, although political uncertainty continues to be a major depressant, brokers said.

Plus signs dominated the list under the lead of Pak-Suzuki Motors and Arif Habib Securities, up by Rs11 and Rs13.65, respectively, followed by MCB, National Bank, Jahangir Siddiqui & Co, Artistic Denim, Attock Petroleum, PSO, Shell Pakistan, Pakistan Oilfields, Pakistan Petroleum, Pak-Suzuki Motors, Dawood Hercules, Engro Chemical and Pakistan Services, which posted gains ranging from Rs8.25 to Rs11.

Losses on the other hand were fractional, barring National Foods, Fazal Textiles, off Rs5.45 and Rs6.60. Other losers included Mitchell’s Farm Fruits, Berger Paints and Javed Omer, off Rs2 and Rs3.30.

Trading volume rose to 173m shares from the previous 60m shares, as gainers forced a strong lead over losers at 223 to 78, with 29 shares holding on to the last levels.

National Bank topped the list of actives, up Rs10.40 at Rs234.90 on 16m shares, followed by DG Khan Cement, higher by Rs4.05 at Rs97.25 on 16m shares, MCB, higher by Rs8 at Rs232.50 on 15m shares, PICIC, firm by Rs2.70 at Rs67.85 on 14m shares, Pakistan Petroleum, up Rs9.55 at Rs240.05 on 11m shares, OGDC, higher by Rs3.50 at Rs129 on 10m shares, and Pakistan Oilfields, up Rs10.95 at Rs338.95 on 5m shares.

Other actives were led by Lucky Cement, up Rs180 on 7m shares, followed by Bank of Punjab, higher by Rs2.45 on 5m shares and Nishat Mills, up Rs4.05 on 4m shares.

FORWARD COUNTER: National Bank also led the list of actives on the cleared list, higher by Rs10.35 at Rs236.20 on 5m shares, DG Khan Cement, up Rs4 at Rs97.75 on 4m shares, and MCB, up Rs8.70 at Rs233.70 also on 4m shares.

PICIC followed them, higher by Rs2.70 at Rs68.25 on 4m shares, and Pakistan Petroleum, higher by Rs9.40 at Rs241.50 also on 4m shares.

DEFAULTER COS: Active trading was witnessed on this counter under the lead of Unity Modaraba, up 15 paisa at Rs0.80 on 1.636m shares, followed by Norrie Textiles, lower by 95 paisa at Rs3.05 on 1.186m shares and Caravan Fabrics, easy by five paisa at Rs0.75 on 0.256m shares.

DIVIDEND: Saudi Pak Leasing, cash 15 per cent, Karam Ceramics, right shares 33.3 per cent.

BOARD MEETINGS: Artistic Denim, Habib Bank Modaraba, on Sept 16; Polyron, Al-Abbas Cement, International Investment Bank, KASB Bank, and Pak-Gulf Leasing, on Sept 18; Allwin Engineering, on 20; Al-Mal Securities, on 21; and Bosicor Pakistan, on Sept 27.