KARACHI, Dec 23: Stocks on Monday suffered fresh pruning at the higher levels as a section of institutional traders took profits but the underlying sentiment did not show any nervousness and remained uppishly inclined thanks to the presence of support at the dips.
“I don’t think a long overdue correction has set in”, says an analyst “bulls have yet to decide about a technical retreat or further boost”.
The year-end covering operations to fill in portfolio gaps here and there are still to manifest themselves though on selected stocks and that will show that the index has already hit its nine-year highs or take a breather after hitting the newly set crucial level of 2,500.
The KSE 100-share index suffered a fresh setback of 15.56 points at 2,509.44 as compared to weekend’s 2,525 points as both PTCL and PSO came in for active profit-selling and finished at the day’s lowest levels.
Although trend-setters remained under pressure throughout the session being in a highly overbought positions, the broader market performed relatively well.
Whether or not the delayed correction has set in to straighten the market’s overbought position will depend on the behaviour of the bulls, some of them are still in a mood to test the index level of 2,600 before the year is out.
“There appears to be a deliberate shift in the investor buying options”, analysts said adding “the major buying interest seems to have been shifted to high-yielding stocks and for obvious reasons”.
Both Fauji Fertilizer and Engro Chemicals whose dividend yields are fairly attractive, a major portions of the liquid funds has been shifted to them and some others with an identical records. Hub-Power stayed firm as its return on investment is fairly attractive.
While the former rose by Rs1.85 to Rs71, the latter soared by Rs6.05 to hit its new career-best level of Rs89. PTCL whose dividend yield comes to around 12 per cent may witness further price erosion after the market readjust itself to the new emerging phenomenon.
After straight run-up for the last about three weeks, losers managed to force a comfortable lead over the gainers, although bears are still divided over the future direction of the market.
Trading volume fell to 216m shares from the previous 319m shares as investors were not inclined to sell at the falling prices. Out of the 383 actives, 192 shares fell, while 133 rose, with 58 holding on to the last levels.
Arif Habib Securities and Siemens Pakistan did not toe the market’s general line of action and rose by Rs7 and Rs20.25. Other major gainers were led by Premier Sugar, Honda Atlas Cars, Pak-Suzuki Motors, Rafhan Maize, Cherat Papers, BOC Pakistan, Dawood Cotton and Engro Chemical, which posted gains ranging from Rs2 to Rs6.05.
Losses were mostly fractional barring Pak Reinsurance Co and Unilever Pakistan, which fell by Rs4 to Rs20.25 followed by Javed Omer, EFU Life and General, Fazal Textiles, Gadoon Textiles, Sarhad Cigarette, PSO, Tri-Pack Films and Pakistan Oilfields, off Rs1.50 to Rs3.
Hub-Power led the list of actives, up by 10 paisa at Rs33.10 on 54m shares followed by PTCL off 70 paisa at Rs22.95 on 34m shares, Sui Northern easy five paisa at Rs22.20 on 15m shares, Engro Chemical, sharply higher by Rs6.05 at Rs89 on 13m shares, Dewan Motors, higher 90 paisa at Rs12.65 on 12m shares, Fauji Fertilizer, up by Rs1.85 at Rs71 on 10m shares and National Bank, off 50 paisa at Rs27.10 on 6m shares.
Other actives were led by Fauji Fertilizer, higher Rs1.85 on 10m shares, PSO, off Rs1.65 also on 10m shares, ICI Pakistan, easy Rs1.30 on 7m shares and FFC-Jordan Fertilizer, unchanged on 6m shares.
FORWARD COUNTER: Barring Engro Chemical, which rose by Rs4.50 to Rs87.50 on 5m shares, all other leading speculative shares came in for active selling.
The notable feature was that trading also commenced in the January settlements, most of which finished in line with their maturing December counterparts.
Hub-Power came in for active selling and fell nine paisa at Rs33.06 on 15m shares, its January contract rose by 25 paisa at Rs33.40 on 4.375m shares. PTCL fell by 80 paisa at Rs22.95 also on 15m shares and so did its January delivery, lower 55 paisa at Rs23.20 on 2.335m shares.
PSO fell by Rs1.90 at Rs189.10 on 2.216m shares for the ruling December contract. Sui Southern eased by five paisa at Rs22.20 on 2.092m shares.
DEFAULTER COMPANIES: Brisk trading was witnessed on this counter as a section of investors played on both sides of the fence. Allied Motors came in for active support and rose by one rupee at Rs14.50 on 0.249m shares followed by Service Fabrics, up by 20 paisa at Rs0.80 on 0.141m shares and Quice Foods, unchanged at Rs1.80 on 70,000 shares.
DIVIDEND: Kohinoor Energy, interim at the rate of 15 per cent, Baba Farid Sugar, 12.5 per cent and Mirza Sugar Mill, nil.