KARACHI, March 19: After opening distinctly lower, stocks on Tuesday staged a smart rally toward the close of the session on active short-covering in the pivotals, pushing the KSE 100-share index higher by 23 points at 1,883.70.
Essentially, it was a PSO-led rally followed by rumours that the Privatization Commission has received an above market bid from a leading foreign buyers against the sell-off of its 51 per cent controlling shares. Other blue chips rode the bandwagon with it putting the market back on the rails.
“It was a timely rumour coined by an alert mind,” says a leading member of the KSE commenting on the PSO bid. “There is no question of a bid as the sell-off process will have to pass through a long-procedural and legal mechanism before it could be put on sale.”
As a matter of fact the market has already met its technical demands and paved the way for the return of the bulls at the lower levels.
The opening was, however, easy owing to panic created by reports of early morning sectarian killing of three persons in Lahore as a result, KSE 100-share index fell further.
But later rumours of above market bid from an international consortium of buyers for the purchase of controlling shares of PSO sent a wave of optimism in the rings evoking all-round covering purchases at the lower levels.
The KSE 100-share index finally finished recovered by 22.87 points at 1,883.70, indicating that it could rise above the barrier of 1,900 any time.
The PSO was in the forefront of shares, which not only halted the market decline but also initiated a strong rally driving bears out of the arena. Indications are that conflicting rumours about the sell-off of PSO will continue to inspires either-way movements in its share value during the coming sessions too. It rose by Rs.5.10 to 170.10.
“After meeting its technical demands, the market is firmly on its way to stay above psychological barrier of 1,900 points for the near-term,” most stock analysts believe.
But well-informed among them are eying the target of 2,000 index level and this perception is reinforced by the advent of foreign buying ahead of a big privatization programme before June 30, some others say.
Higher carryover charges did worry investors, which caused a good bit of selling from the jobbers and weakholders during the last two sessions but the situation now has changed a bit for the better.
The market advance was led by the energy sector under the lead of PSO followed by Shell Pakistan, National and Pakistan Refinery, which posted gains ranging from Rs.1.75 to 5.10 followed by some leading MNCs on the other counters, notably Siemens Pakistan, Gillette Pakistan, Treet Corporation.
But the largest rise of Rs.20 was noted in Wyeth Pakistan owing to the shortage of the floating stocks and Lever Brothers and Bata Pakistan, which rose by Rs.2 to 10.
Losers were mostly led by insurance and Textiles shares under the lead of Adamjee Insurance, IGI, EFU General, Nagina and Idrees Textiles, off one rupee to Rs.1.90.
Trading volume fell to 149m shares from the previous 191m shares but advancing shares forced a strong lead over the losers at 142 to 68, with 49 shares holding on to the last levels.
The most active list was again topped by PTCL, up 35 paisa at Rs.20 on 49m shares followed by Hub-Power, higher by 30 paisa at Rs.25.05 on 32m shares, PSO, up Rs.5.10 at Rs.170.10 on 17m shares, Dewan Salman, higher 50 paisa at Rs.17.20 on 7m shares and National Bank, up Rs.1.05 at Rs.23 on 6m shares.
Other actives were led by Engro Chemical, up one rupee on 5.313m shares, Sui Northern Gas, firm 15 paisa on 4.733m shares, ICI Pakistan up 50 paisa on 4.074m shares, Pakistan PTA, steady by five paisa on 2.823m shares and Japan Power, up 10 paisa on 2.672m shares.
FUTURE CONTRACTS: PSO also came in for strong support on the forward counter and ended with recovered by Rs.5.25 at 171.25 on 2.183m shares. All others also rose barring Pakistan PTA, which eased by five paisa.
Hub-Power was again actively traded, up 30 paisa at Rs.25.20 on 8.633m shares followed by PTCL, higher also by the same amount at Rs.20.10 on 3.232m shares.
DEFAULTER COMPANIES: Allied Motors again topped the list of actives, 20 paisa at Rs.4.70 on 5,500 shares, followed by Automotive Battery and Crescent Spinning, unchanged and off 50 paisa at Rs.6 and 4.50 on 4,000 and 2,500 shares each. Four others were traded modestly.
DIVIDEND: Packages cash 45 per cent, Clariant Pakistan final 35 per cent, 25 per cent interim already paid, EFU General Insurance 12.5 per cent,EFU Life Assurance, Khyber Textiles, HinoPak Motors and Khairpur Sugar Mills, all nil.