KARACHI, June 17: The anticipated post-budget rally failed to manifest itself on the stock market on Monday as leading investors were still in the process of analyzing the fiscal measures and their likely impact on stock trading.
The initial reaction was, however, positive as the KSE 100-share index rose by about 10 per cent but as the follow-up support turned shy in the absence of strong institutional buying it reacted to close fractionally down around 1,765.88, off 2.12 points.
It was perhaps the weakness of Hub-Power followed by renewed heavy selling in the backdrop of some negative rumours, which weighed heavily against the entire market and did not allow the post-budget rally a full manifestation, brokers said.
“The budget is in line with the market expectations as most of the demands of the country’s stock exchanges have been accommodated, says a leading stock analyst adding as “investors are still in the process of analyzing their impact on stock trading, the post-budget session lacked strong push.”
Withdrawal of withholding taxes on bonus shares, gas consumption bills, bearer certificates, increase in investment allowances of overseas Pakistanis, extension of tax exemptions on bonus shares and dividend incomes and several other incentives for the corporate sector including import duty cut to 25 per cent are some of the measures, which could give the needed boost to the stock trading.
“The incentive-laden budget provides a strong base for the market to maintain its bull-run but it must be backed by a relative calm on the law and order front,” another stock analyst said.
The KSE 100-share index early was modestly higher by 10 points but as follow-up support remained shy, it faltered half way, although status quo was maintained.
Leading stock brokers said the market should have responded positively. The post-budget fresh massive battering received by Hub-Power has a negative impact on the entire trading pattern for the second session as the selling was carried over from the Friday sessions.
“Conflicting rumours are pouring in about the Hubco including the generator episode and lower generating capacity,” they added. There is a rumour in the market that Hubco management could not put into operation its defected generator or replace it within the specified time.
Minus signs, therefore, dominated the list under the lead of Wyeth Pakistan, Millat Tractors, Attock Refinery, Glaxo-Wellcome Pak, and Shell Pakistan, falling by one rupee to Rs.2.70. All other losses were mostly fractional and reflected lack of support rather than large selling.
Lever Brothers, Gul Ahmed Textiles, Mitchell’s Fruits, Pakistan Oilfields and Sitara Chemical were among the prominent gainers, up by Rs.2 to 3 followed by Aventis Pharma and Murree Brewery, which rose by one rupee to Rs.1.35.
Trading volume fell to 85m shares from the previous 116m shares as losers maintained a strong lead over the gainers at 141 to 87, with 60 shares holding on to the last levels.
Hub-Power again came in for active selling, off 30 paisa at Rs.22.85 on 35m shares, followed by PTCL up five paisa at Rs.17.35 on 20m shares, National Bank, lower 20 paisa at Rs.19.90 also on 5m shares, PSO, higher 20 paisa at Rs.141.10 on 5m shares and Telecard, up 25 paisa at Rs.14.55 on 3m shares.
Other actives were led by Worldcall, easy 15 paisa on 3m shares, Engro Chemical, unchanged on 2m shares, KESC, steady five paisa on 1.637m shares, Chakwal Cement, lower 15 paisa on 1.366m shares and ICI Pakistan, firm by five paisa on 1.251m shares.
FUTURE CONTRACTS: Speculative issues on the forward counter also ruled easy but larger decline was resisted thanks to the presence of buying at the dips.
Hub-Power again came in for active selling and fell to close lower by 20 paisa at Rs.23.05 on 14m shares followed by PTCL, unchanged at Rs.17.45 on 4m shares and PSO, lower 10 paisa at Rs.141.75 on 2.303m shares. All others were modestly traded in the absence of strong support.
DEFAULTER COMPANIES: Trading activity on this counter was also dull amid slow trading. Uqab Breeding, was marked down by 30 paisa at Rs.0.50 on 2,000 shares, followed by Junaid Cotton and Crescent Spinning unchanged at Re.1 and Rs.6 on 1,000 shares respectively.