KARACHI, Feb 28: Stocks on Friday recovered from the recent lows boosted by perceptions of higher dividend yields in the backdrop of encouraging interim and final working results being announced daily by most of the leading shares but there was no matching selling from the retailers.
The KSE 100-share index recovered 42.67 points and finished close to its benchmark of 2,400 point at 2,399.15, reflecting the strength of leading base shares including PTCL, PSO and Hub-Power.
“It may not be the beginning of bull market but when positive news, notably a possible increase in petroleum prices, combine there is always a strong possibility of strong rebound,” brokers said.
All eyes are now fixed on the Hub-Power meeting due on March 5, and a market talk of an interim of 30 to 35 per cent evoked good interest in its share at the current lower levels.
Expectations of fresh increase in petroleum prices by the oil companies in sympathy with a record rise in world rates for the fortnight ended Feb 28, also evoked strong speculative buying in the PSO and Shell Pakistan, which had hit new lows during the week on persistent selling.
The PTCL has announced aftertax profit of about Rs10 billion for the year ensuring EPS at the rate of Rs1.94 for the half year ended Dec 31, 2002 but did not declare interim dividend as widely speculated. However, higher profits have raised hopes of good dividend.
ICI Pakistan increased the final dividend to 22.5 per cent from the previous 20 per cent on profit of Rs1.68bn (EPS Rs13.36) but market analysts term it on the lower side of the general expectations.
“The market could receive the needed boost during the next week on strength of board meetings of some of the leading companies and rumours of higher interim dividend,” analysts said. “Whether the snap rallies could be sustained will largely depend on the Iraq situation.”
In market parlance, weekend rally generally paves the way for a sustained run-up when the trading resumes next week. Technically, the market is in a highly oversold position and could attract any amount of covering purchases at the current lower levels.
However, much will depend on the behaviour of the institutional traders whether or not they choose to re-enter the market as the retailers may not have the relevant financial resources to reverse the trend, some others said.
Prominent gainers were led by National Refinery, Pakistan Oilfields, PSO, and Unilever Pakistan, which posted gain ranging from Rs2.25 to Rs29.95. Shell Pakistan, which has been under pressure throughout the week recovered Rs23 on predictions of higher petroleum prices.
Losers included Alico, National Foods, BOC Pakistan, Nestle MilkPak and Arif Habib Securities, off one rupee to Rs11.15. Trading volume showed a modest rise at 96m shares from the previous 75m shares but financial support lacked pre-reaction aggressiveness owing to the absence of willing sellers.
The advancing shares forced a fair lead over the losing ones at 107 to 51, with 39 shares holding on to the last levels.
Hub-Power was actively traded, up 55 paisa at Rs34.45 on 26m shares, followed by PSO, sharply higher by Rs4.55 at Rs180.80 on 15m shares, PTCL, firm by 15 paisa at Rs20.35 on 12m shares, Pak PTA, higher by 70 paisa at Rs7.45 on 10m shares and Sui Northern Gas, higher 60 paisa at Rs20.55 on 5m shares.
Other actives were led by FFC-Jordan Fertilizer, up 55 paisa on 4m shares, Pakistan Oilfields, higher by Rs4.55 also on 4m shares, Telecard, up Rs1.50 on 3m shares, ICI Pakistan, higher by 85 paisa on 2m shares and KESC, steady seven paisa also on 2m shares.
FORWARD COUNTER: Hub-Power led the list of actives, up 35 paisa at Rs.34.30 on 6m shares, PTCL, steady 10 paisa at Rs20.30 on 4m shares, PSO, higher by Rs6.20 at Rs180.95 on 2m shares, FFC-Jordan Fertilizer, up 55 paisa at Rs10.30 on 0.892m shares and Sui Northern Gas, higher 49 paisa at Rs20.44 on 0.459m shares.
The largest rise of Rs6.20 was recorded in both the settlements of PSO, followed by Fauji Fertilizer, Engro Chemical and MCB, which also rose by Rs1.15 to Rs1.50.
The notable feature was that the matured February settlements were rung off the trading board and the March contracts assumed the role of ruling deliveries.
DEFAULTER COMPANIES: Trading activity on this counter was relatively slow as shares of only four companies came in for trading as compared to normal over a dozen shares. Schon Modaraba led the actives, unchanged at Rs0.60 on 32,500 shares, Allied Motors, easy five paisa at Rs9.50 on 4,000 shares Suzuki Motorcycles, lower 10 paisa at Rs7.40 on 3,000 shares and Quice Foods, up 10 paisa at Rs1.15 on 2,500 shares.