KARACHI, Feb 20: Stocks on Tuesday failed to extend the overnight recovery drive as leading base shares fell sharply lower on selling triggered by reports that client level netting would be implemented by March 5. The KSE 100-share index shed a good part of the previous gain, off 115 points at 11,463.18.
However, bulls fought back after mid-session and made active short-covering at the decline, enabling the index to finish above the session’s lows. Weakness of the leading oil, bank and cement shares weighed heavily against the underlying sentiment.
“The risk management measure, named as client level netting, will significantly increase the exposures of both the buyers and the sellers of shares,” a leading analyst Ashraf Zakria said, adding “fears that the measure may curtail the daily trading volume forced day traders and short-term dealers to get out of the market in a fear”.
But he said the selling appeared to be psychological rather than genuine as positive market fundamentals would not allow the market to fall below the current levels. Moreover, the market had the will and capacity to absorb such bear onslaughts.
“Some of the best corporate announcements, notably from the MCB, National Bank and Attock Petroleum are due during the next couple of sessions and the current reaction could well prove a launching pad for a big run-up,” another leading analyst Faisal A. Rajabali said.
The strong presence of some of the leading foreign investors on selected counters was another aiding factor that would not allow bears to further depress the market, Ahsan Mehanti said, adding “the CFS is around Rs50 billion and dividend news are pouring in each session, and bear manoeuvring may not cause major dents in the prevailing price structure”.
Although losing shares dominated the list, some of the leading shares managed to finish higher by Rs16 and Rs18.40 for Pak-Suzuki Motors and Attock Petroleum, followed by Allied Bank, Adamjee Insurance, EFU Life, Pakistan Engineering, after an interim dividend of 25 per cent and Bata Pakistan, which posted gains ranging from Rs4.90 to Rs13.50.
Treet Corporation and National Bank were leading among the losers, off Rs14.20 and Rs14.35. They were followed by MCB, IGI Insurance, PSO, National Foods and Gillette Pakistan, which fell by Rs5.90 to Rs9.85.
Trading volume soared to 304m shares from the previous 181m shares as losers held a comfortable lead over the gainers at 178 to 144, with 33 shares holding on to the last levels.
Bank Alfalah topped the list of actives, up by Rs2.45 at Rs54.95 on 41m shares followed by Bank of Punjab, steady Rs1.05 at Rs126.30 on 31m shares, OGDC, off Rs2.55 at Rs123.75 on 29m shares, National Bank, sharply lower by Rs14.35 at Rs280.45 on 20m shares, Pakistan Petroleum, lower by Rs2.50 at Rs261 on 15m shares, Telecard, higher by 40 paisa at Rs10.65 and PTCL, off Rs1.25 at Rs57.20 on 10m shares.
Other actives were led by Telecard, up by 40 paisa on 15m shares, Kot Addu Power, lower 35 paisa on 11m shares, D.G. Khan Cement, off Rs3.20 on 10m shares and Lucky Cement, up by 65 paisa on 9m shares.
FORWARD COUNTER: National Bank led the list of actives on this counter and fell by Rs15.75 at Rs280.75 on 20m shares, followed by Bank Alfalah, up by Rs1.75 at Rs54.60 on 8m shares and its March contract, higher by Rs2.15 at Rs55.55 on 7m shares.
OGDC followed them, off Rs2.88 at Rs123.62 on 7m shares and National Bank, March delivery, lower by Rs13.85 at Rs281.65 on 6m shares.
DEFAULTER COS: Zeal-Pak Cement led the list of actives on this counter, lower by 30 paisa at Rs5.80 on 0.502m shares followed by Crescent Standard Bank, easy by 10 paisa at Rs4.15 on 0.323m shares and Unity Modaraba, up by five paisa at 70 paisa on 0.250m shares.
S.S. Oil was also actively traded, up by Re1 at Rs7.50 on 0.197m shares and Nimir Chemicals, easy 10 paisa at Rs2.95 on 0.118m shares.
DIVIDEND: Pakistan Engineering Company, interim cash at the rate of 25 per cent.