KARACHI, Dec 11: Stocks on Wednesday recovered from the previous lower levels followed by active short-covering in pivotals on the perception that 12 paisa per unit cut in power rates may lead to an identical reduction in industrial production costs.
The underlying sentiment was also boosted by rumours of early pre-bid meeting for the sell-off of controlling shares of PSO to one of the short-listed strategic foreign buyer.
The KSE 100-share index recovered 12.69 points and was quoted above the crucial level of 2,400 at 2,402.31, after touching the day’s high of 2,412 amid a lower volume of 243m shares.
Although the cut in power rates was modest, industrial sector welcomed it as it will lower the cost of production and give a slight push to exports making them a bit competitive on the world markets.
“But what is needed is a drastic cut in allied taxes and surcharge as well as power factor penalty, which together push the monthly power bills beyond paying capacity of the industrial sector”, some analysts said.
However, it is a good beginning by the new government and will be followed by an identical cut in gas prices. The combined relief of the both is expected to have a significant positive impact on the industrial costs, they said.
The market talk of an early pre-bid meeting, possibly by the end of the current month or early next year to sell the controlling shares of PSO to one of the short-listed bidders also evoked a lot of buying interest in it and the other energy shares.
Bulk of the support remained confined to energy, fertilizer, telecom and banking sectors followed by reports of higher earnings for the year ending Dec 31, 2002.
Among the leading gainers, Universal Leather rose by Rs15.55 after its management announced to buyback shares from the minority shareholders at Rs125 per share of Rs10. Pakistan Reinsurance Co posted a gain of Rs7.
Other prominent gainers were led by Adamjee Insurance, Fazal Textiles after the announcement of 20 per cent dividend, PSO, Atlas Honda, Clariant Pakistan, Reckitt and Benckiser, Siemens Pakistan, Nestle MilkPak and Rafhan Maize, up by Rs3.15 to Rs6.25.
Losers were led by HinoPak Motors and Wyeth Pakistan, off Rs4 and Rs20 respectively at Rs76 and Rs640 respectively. Kohinoor Weaving, Abbott Lab, Pakistan Refinery and Sarhad Cigarette followed them, off Rs2 to Rs3.50.
Trading volume fell to 243m shares from the previous 365m shares but advancing shares forced a strong lead over the losing ones at 171 to 136, with 63 shares holding on to the last levels.
Hub-Power came in for active short-covering at the lower level and rose by five paisa at Rs29.80 on 52m shares, followed by PTCL, up by 25 paisa at Rs24.10 on 45m shares, PSO, higher by Rs3.15 at Rs185.25 on 20m shares, National Bank, up by 30 paisa at Rs26.60 on 16m shares, Sui Northern Gas, easy 10 paisa at Rs19.60 on 15m shares, and Engro Chemical, higher by 60 paisa at Rs75.60 on 10m shares.
Other actives were led by Telecard, up by 35 paisa on 11m shares, KESC, easy 15 paisa on 9m shares, ICI Pakistan, firm by 20 paisa on 7m shares and D.G.Khan Cement, steady by 10 paisa also on 7m shares.
FORWARD COUNTER: PTCL came in for active short-covering at the lower level and rose by 25 paisa at Rs21.65 on 14m shares followed by PSO, higher by Rs2.40 at Rs185.60 on 12m shares and Hub-Power, unchanged at Rs29.80 also on 12m shares.
Engro Chemical rose by 40 paisa at Rs76.10 on 4m shares, while FFC-Jordan was marked down by five paisa at Rs9 on 2m shares. Others were traded modestly.
DEFAULTER COMPANIES: Brisk activity was again witnessed on this counter as shares of two dozen companies came in for trading for the second session in a row. Although price changes were fractional, larger turnover reflects that a section of investors has chosen to trade in the below face shares of these companies.
Mineral Grinding came in for active support and rose 60 paisa at Rs1.05 on 24,000 shares followed by Pangrio Sugar, unchanged at Rs1 on 23,000 shares and Suzuki Motorcycles, lower 20 paisa at Rs9.70 on 21,000 shares.
DIVIDEND: Fazal Textiles, 20 per cent for the year ended Sept 30, 2002.