KARACHI, Aug 7: Stocks on Wednesday recovered across the board followed by active short-covering at the attractively lower levels, lifting the KSE 100-share index by about 13 points at 1,793.20 and the market capitalization by over Rs.3bn.
After a month of low volumes, falling to a record low of 17m shares in a single-session, the turnover figure swelled to a respectable total of 71m shares but still below the average daily to total of 100m shares in normal trading sessions.
There was no change in the background news. Rather there were negative reports of killing of 10 Hindus in occupied Kashmir. However, investors were guided by the technical factors in an oversold market and covered positions at the lower levels on all the counters under the lead of textile, sugar and energy sectors whose dividend announcements are due.
The intriguing lull was, therefore, broken as a late burst of selective institutional buying put the market back on the rails after a protracted bearish spell and terribly low volumes, brokers said.
The KSE 100-share index recovered 12.51 points at 1,793.20, indicating that it may breach through the barrier of 1,800 points and stay well above it on the strength of low-priced blue chips, which could attract any amount of short-covering in the sessions to come.
All the pivotals participated in the run-up on strong general and financial support at the lower levels, which ensure handsome capital gains in a bull market.
“The run-up seems to have been initiated by Adamjee Insurance amid market talk that MCB group is cornering its floating stock to have a say in its management,” floor brokers said.
The buying support was so strong that it breached through the circuit breaker, leading the way for other blue chips to follow its lead and it was promptly picked up by some others including the PSO.
According to market sources the MCB group led by Mian Muhammad Mansha has, over the last two years, cornered about 40 per cent of its floating stock and is planning for a hostile takeover after buying its floating stock.
In an identical hostile takeover bids, its 10-rupee share had touched the peak level of Rs.105 and Rs.70 a couple of years back as speculator joined to race for capital gains.
Opinions are, however, still divided over the future market outlook but some stock analysts predict the lean period may be over and consolidation forces are in to restore credibility to stock trading. Next couple of sessions will show how the market behaves.
Plus signs dominated the list, major gainers being Shell Pakistan, Century Papers, Clover Pakistan, Kohinoor Weaving, Adamjee Insurance, PSO, Pak Reinsurance, Wyeth Pakistan and Arif Habib Securities rising by Rs.1.75 to Rs.12, the largest rise being in Wyeth Pakistan.
Losers were led by Spencers & Co, Lever Brothers, Dawood Hercules, Abbott Lab, Al-Ghazi Tractors, Shafiq Textiles and New Jubilee Insurance, falling by one rupee to Rs.2.25.
Trading volume rose to 71m shares from the previous 27m shares as advancing shares led the losing ones by 159 to 78, with 74 shares holding on to the last levels.
Hub-Power topped the list of most actives, up 50 paisa at Rs.24.75 on 23m shares followed by PSO, higher by Rs.1.75 at Rs.140.25 on 8m shares, Adamjee Insurance, up Rs.2.70 at Rs.38.80 on 4m shares and MCB, steady by 70 paisa at Rs.24.40 on 3m shares.
Other actives were led by WorldCall, up 45 paisa on 3m shares, Engro Chemical, higher by 65 paisa on 2.339m shares, ICI Pakistan, firm by five paisa on 2.152m shares, Sui Northern, steady by 15 paisa on 2.068m shares and National Bank, up 35 paisa on 2m shares.
FUTURE CONTRACTS: Speculative shares on the forward counters also came in for active trading under the lead of Hub-Power, up 35 paisa at Rs.24.80 on 7.122m shares. All others also rose barring ICI Pakistan, which fell by 10 paisa at Rs.37.80.
PSO rose by Rs.1.70 at Rs.140.75 on 2.875m shares followed by PTCL, higher 20 paisa at Rs.17.90 on 1.228m shares.
DEFAULTER COMPANIES: Allied Motors again came in for active support and rose by Rs.1.35 at Rs.11.20 on 32,000 shares followed by Mehran Jute, firm by five paisa at Rs.0.75 on 5,000 shares and Kohinoor Gujar Khan, off 75 paisa at Rs.1.95 on 4,000 shares.
INTERIM DIVIDEND: Janana De Malucho Textiles, 30 per cent, Bannu Woollen Mills also 30 per cent.
BOARD MEETINGS: Prudential Discount & Guarantee House, on Aug 9, Century Insurance on Aug 13, Pak Apex Leasing on Aug 15 and Lever Brothers Pakistan on Aug 19.