KARACHI, Sept 17: The current downward drift was halted on the stock market on Tuesday as institutional traders and leading investors covered positions at the lower levels in leading blue chips, notably the energy sector amid rumours of a fresh price hike.
The KSE 100-share index also finished in the plus column, reflecting the strength of the leading shares, finishing with a gain of 23.02 points or 1.19 per cent at 1,962.08 as compared to 1,939.06 a day earlier.
Technical correction, which wiped out 60 points or about four per cent and Rs8bn from the market capitalization was overdue in a market facing the problem of higher badla volume. And once the situation on the badla front eased a bit, investors were back in the market and allowed it to resume its upward drive.
“I don’t think bears have the strength or the will to create major dents in the prevailing price structure”, one broker believes “much has changed on the financial front for those who could peep through the future”.
Blue chips such as Engro Chemical and PSO, National Refinery, remained in strong demand at the lower levels and finished higher by Rs2 to Rs3.75.
The day’s highlight was provided by the grand rebound staged by the energy shares on strong buying aided by predictions of an increase in the fortnightly revision of petroleum companies, which was delayed by two days.
But trading volume failed to keep pace with the mounting buying offers as leading bears held on to their positions anticipating the continuation of the current run-up and to sell at the higher levels.
“The market has already hit its lowest level after the index breached through the 1,940-point barrier”, one broker claims basing his assessment on the developing corporate as well as financial scenario “higher dividend news pouring in each session, the current lower levels after the technical correction and positive news from the aid front all point to a firm market”.
The general perception is that the index will fluctuate between 2,000 on the higher side and 1,950 could be the resistance level on the lower side during the pre-elections trading.
“The signing of $2.4 billion three-year Poverty Reduction Partnership (PRP) agreement with the Asian Development Bank under which Pakistan will receive $800m each year to support its current drive against poverty is also positive development as for as the economy is concerned”, says a leading stock analyst.
All the leading shares, notably those whose managements have declared good dividends remained in active demand and led the market advance, leading gainers being Wyeth Pakistan and Parke-Davis, which rose by Rs12 and Rs25 respectively. Other good gainers were led by Orix Leasing after a higher dividend, Javed Omer, Artistic Denim, Shafiq Textiles, Lakson Tobacco, National Refinery, Pak Paper Products, Bolan Castings and many others, rising by Rs2 to Rs4.
Energy shares rose in unison, up by Rs2.45 to Rs8 for National Refinery, Attock Refinery, Pakistan Refinery, Shell Pakistan and Pakistan Oilfields.
Balochistan Wheels, which came out with a dividend of 12.5 per cent fell by one rupee followed by Shell Gas, Dynea Pakistan and Siemens Pakistan, off Rs1.60.
Trading volume showed a modest rise at 77m shares from the previous 75m shares as losers trailed far behind the gainers at 79 to 155, with 80 shares holding on to the last levels.
PSO led the list of most actives, up Rs3.75 at Rs191.75 on 26m shares followed by Engro Chemical, higher by Rs2 at Rs62.20 on 12m shares, PTCL, firm by 15 paisa at Rs19.60 on 10m shares, National Bank, steady by 40 paisa at Rs22.90 on 5m shares, MCB, up 15 paisa at Rs26.20 on 3m shares, Hub-Power, firm by 10 paisa at Rs27.20 on 2m shares.
Other actives were led by Dewan Salman, higher by 25 paisa on 3m shares, National Refinery, up by Rs2.45 on 2.180m shares, ICI Pakistan, firm by 35 paisa on 1.977m shares and Sui Northern Gas, steady by 10 paisa on 1.809m shares.
FORWARD COUNTER: PSO also came in for strong support on the forward counter and recovered Rs3.95 at Rs192.25 on 6.375m shares followed by PTCL, firm by 15 paisa at Rs19.70 on 2.338m shares, Hub-Power, up by five paisa at Rs.24.05 on 2.905m shares and Engro Chemical, higher by Rs1.80 at Rs62.30 on 1.800m shares.
DEFAULTER COMPANIES: Shares of over a dozen companies came in for trading under the lead of Mehran Modaraba, which was traded higher by 30 paisa at Rs1.70 on 70,000 shares. Schon Modaraba followed it, firm by five paisa at Rs0.50 on 7,000 shares and Bela Automotive, up by 10 paisa at Rs1.80 on 4,500 shares. Others were modestly traded.
DIVIDEND: Orix Leasing cash 45 per cent, right shares in the ratio of 3:2 at a premium of Rs10 each, Bolan Castings 60 per cent, Balochistan Wheels 12.5 per cent, Fateh Industries, Fateh Sports, Safa Textiles, Pakistan National Shipping Corporation, Al-Mal Securities and Prudential Investment Bank, all nil for the year ended June 30, 2002.