KARACHI, July 30: Leading blue chips on Tuesday finished with clipped gains after the initial attempted rally fulled by interim dividends failed to get through in the absence of strong follow-up support.
The KSE 100-share index early was up by nine points followed by strong speculative support in the fertilizer giant ahead of their board meetings and market talk of higher dividend but ended fractionally higher 0.87 points at 1,779.11.
“Higher badla volumes have taken steam out of the market as investors have no appetite for stocks even at the lows,” says a leading stock analyst commenting on the prevailing sluggishness “rather long-position holders are seller at each rise.”
Even technical rally could not manifest itself when the market is faced with twin-problem of heavy unsold stocks in their kit and the consequent pressure on liquidity.
Interim dividends by Fauji Fertilizer and Engro Chemical Pakistan evoked active speculative buying earlier but late selling at the inflated levels allowed the market to finish with clipped gains.
Fauji Fertilizer, Pakistan’s urea giant, came out with a second interim dividend at the rate of 30 per cent (25 per cent already paid), but Engro Chemical’s first interim for the current year at 20 per cent seems to have fallen below the market expectations as was reflected by a modest decline of 80 paisa in its share value at Rs.60.40.
But on the other hand interims by Bannu Woollen and Janana De Malucho Textiles at 30 per cent each were billed on the higher side of the market expectations.
The early euphoria created by rumours of surprising announcements at the board meetings of Fauji Fertilizer and Engro Chemical could not be sustained later as the same set of investors and bargain-hunters who pushed their prices higher hastened to get out of the market after cashing in on the available margins.
“More corporate announcements are due by some other leading companies during the next couple of days but the poor reaction to interims of urea giants demonstrates the market has deeper and unspecified woes, which needs to be addressed immediately,” one analyst says.
The political news background may not be that positive to lure investors back in the market but financial institutions have a role to play, which is currently missing, he adds.
The perception that the corporate announcements will generate a needed activity seems to be losing its relevance after the interims of the fertilizer giants, some others said.
Price changes either-way were mostly fractional and reflected the absence of large selling or buying by any quarter. Some dividend related gains were noted in shares such as Bannu Woollen and Janana De Malucho Textiles, which announced handsome interim dividend at the rate of 30 per cent each.
A. Hassan Textiles, Fecto Sugar, Stara Energy, Atlas Honda and Hilal Flour Mills were exceptions, which rose by one rupee to Rs.1.40. Losers were led by Reliance Insurance, Gul Ahmed Textiles, Attock Refinery, International Industries, Lever Brothers and Spencer Pakistan, falling by one rupee to Rs.2.25.
Trading volume showed a modest rise at 35m shares as compared to 32m shares a day earlier as losers held a modest lead over the gainers at 113 to 104, with 75 shares holding on to the last levels.
Hub-Power again led the list of actives, up five paisa at Rs.24.20 on 9m shares followed by PSO, higher 25 paisa at Rs.138.50 on 5m shares, Engro Chemical, easy by 80 paisa at Rs.60.40 on 4m shares, PTCL, firm by five paisa at Rs.17.65 also on 4m shares, and Fauji Fertilizer, higher 80 paisa at Rs.48.85 on 3m shares.
Others were led by KESC, easy five paisa on 2m shares, ICI Pakistan, up 35 paisa on 1.342m shares and Pak PTA (right), unchanged at 0.10 paisa on 0.902m shares.
CLEARED LIST: The activity on this counter was relatively slow, although seven shares rose, while four fell with two remaining unchanged.
Hub-Power rose five paisa at Rs.24.35 on 2.601m shares followed by PSO, higher 15 paisa at Rs.139.55 on 1.775m shares and Engro Chemical, off 70 paisa at Rs.60.85 on 1m shares.
DEFAULTER COMPANIES: Shares of six companies came in for trading under the lead of Suzuki Motorcycle and Allied Motors, off 20 and 30 paisa respectively at Rs.3.70 and 8.75 on 2,500 and 2,000 shares. Saitex Spinning, was traded unchanged at 0.70 paisa on 1,500 shares.
BOARD MEETINGS: Adil Textiles, Fateh Textiles, Paramount Spinning and Gulistan Textiles, all on July 31, Siemens Pakistan Engineering and Frontier Ceramics on Aug 5, Crescent Star Insurance on Aug 6 and Pakistan Tobacco on Aug 7.
DIVIDEND: Fauji Fertilizer second interim 30 per cent, Engro Chemical first interim 20 per cent, Bannu Woollen interim 30 per cent, Janana De Malucho Textiles, interim 30 per cent, Crescent Board, right shares at the rate of 33.33 per cent, First Professional Modaraba, Pakistan Gum Chemicals, Adam Sugar, Hafiz Textiles, Babari Cotton, Mian Textiles, International Multi-Leasing and Murree Brewery, all nil for the last year.