KARACHI, May 26: Stocks on Wednesday recovered from the previous lows under the lead of cement shares and some other blue chips in heavy trading aided by market talk of tax reliefs in the new budget. The KSE 100-share index recovered 18 points at 5,483.00.
It may not be the pre-budget rally, it could be investor optimism about some incentives ahead of the finance minister's visit to have discussions with the KSE high-ups on the new national budget including fresh tax measures and reliefs for the corporate sector.
"Near-panic buying in the cement sector at much higher rates on the perception of withdrawal of excise duty was the chief factor behind the market's snap rally", analysts said adding "textile shares despite higher lint prices followed it".
The sentiment in part was also influenced favourably by the president's invitation to the Indian Congress leader, Sonia Gandhi to visit Pakistan to give the needed push to on-going peace moves between the two neighbours.
Positive statements about the need of peace with Pakistan coming in from top Indian political leaders including the prime minister indicate that the peace initiatives taken by the former government are expected to be further intensified and the market could be the chief beneficiary in the coming months.
The KSE 100-share index recovered 17.74 points from the previous close at 5,482.91 as compared to 5,465.17 a day earlier. It touched the low and the high of the day at 5,465.23 and 5,504.15 respectively.
The national budget is still two weeks away, but the finance minister's talks with the KSE members will give a fair idea of the fresh budgetary measures and tax reliefs and new levies, brokers said.
"A part of the pre-budget trading is expected to be based on the finance minister's discussions as they will give a fair idea of what he has in mind and how the bourse high-ups react to it", they said.
They said the gist of the finance minister's talk will be fully manifested in the trading after the market reopens on Thursday. The sectors, which are to benefit from the new tax reliefs or incentives will lead the market's pre-budget rally.
Much of the activity remained centred around the cement, energy, notably gas shares, which are expected to be chief beneficiaries of the new fiscal steps.
Cherat Cement, Kohat Cement, EFU Life Insurance and Aventis were among the top gainers, up by Rs5.20 to Rs19.10 followed by Javed Omer, EFU General, Sapphire Textiles, Janana de Malucho Textiles, International Industries, Attock Cement, Shahkarganj Sugar, which posted gains ranging from Rs3 to Rs4.75.
Losers were led by Bhanero Textiles, Fateh Textiles, BOC Pakistan, National Foods, Unilever Pakistan and Grays of Cambridge, off by Rs5 to Rs10. PICIC spot, Adamjee Insurance, Lakson Tobacco, Shell Pakistan, Glaxo-SKF and Pakistan Cables followed them down by Rs2 to Rs5.
Trading volume rose to 509m shares from the previous 243m shares as gainers forced a strong lead over the losers at 245 to 167, with 38 shares holding on to the last levels.
Fauji Cement topped the list of most actives, up by Rs1.70 at Rs17.85 on 96m shares followed by D.G.Khan Cement, higher by Rs1.85 at Rs62.65 on Lucky Cement, up by Rs2.65 at Rs43.60 on 54m shares, Maple Leaf Cement, firm by Rs1.65 at Rs45.15 on 45m shares, Saadi Cement, higher by Rs1.25 at Rs15.90 on 27m shares, PTCL, steady by 15 paisa at Rs43.35 on 20m shares and National Bank, up by 50 paisa at Rs68.65 on 15m shares.
Other actives were led by Chakwal Cement, steady five paisa on 15m shares, Sui Northern Gas, lower 50 paisa on 14m shares and Bank of Punjab, higher 75 paisa on 12m shares.
FORWARD COUNTER: Bank Alfalah came in for active selling as a section of investors took profits at higher levels on reports that its IPO was oversubscribed by 10-time higher than the total offer. It fell by Rs.1.45 at Rs66.40 on 9m shares.
Sui Northern Gas also came in for active selling and was marked down by 70 paisa at Rs70.30 on 1.394m shares followed by PTCL, up by 15 paisa at Rs43.35 on 1m shares and Hub-Power, firm by six paisa at Rs34.34 also on 1m shares.
DEFAULTER COS: Active trading was again witnessed on this counter as a number of shares on all the counter attracted good support under the lead of Standard Investment Bank, up by 60 paisa at Rs10.25 on 1.853m shares, followed by Dandot Cement, firm by five paisa at Rs11.10 on 1.200m shares.
Other actives were led by Crescent Spinning, easy 45 paisa at Rs6.50 on 0.714m shares and National Asset, higher by Rs1.20 at Rs3.95 on 0.911m shares. Quice Foods, Medi Glass, Lafayette and Service Fabrics were others among the actives.