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PTCL, Hubco lead stock market rally

RECORDER REVIEW

KARACHI: Buying in PTCL and Hubco helped the share market to close on a positive note, otherwise selling from institutions and killing of Iqbal Raad, one of the lawyers of former prime minister Nawaz Sharif, created panic among the investors.

The trend appeared to be in full mood to cross the 2000 barrier as buying surfaced from local brokerage houses and retail investors. The traders and dealers said the share market saw a fresh infusion of funds from foreign investors. This made the outlook brighter and demand in the front liners increased sharply. There was heavy demand for PTCL and Hubco scrips

PTCL was up because of agreement signed with a Canadian company to launch mobile phone service in the country. The joint venture will cost $50 million and it is expected to start functioning by October 2000. The company's sale will improve after the launch of mobile phone service.

Hubco was again in demand because traders hoped that soon the matter with the government would be resolved over the high tariff dispute. Indications received from the traders revealed that the company intends to resolve this issue in court so that no new government would be able scrap the decision of the court. If the company reached some understanding with the present regime it would again create doubts and any new government will reopen the case.

Optimism was running higher after the President Bill Clinton's decision to visit Pakistan. It would allay the impression of Pakistan's isolation from the outside world and also go a long way in defusing tension between two South Asian nuclear capable countries.

The Karachi Stock Exchange 100 index recorded a rise of 30.07 points to 1936.98 from 1906.91 of the previous week. The volume during the week amounted to 1.382 billion shares as against 1.338 billion shares of the preceding week.

The market on the first session gained hefty increase of 63 points and traders felt that by the end of the week index will cross the barrier of 2000 mark. The positive report restored the confidence of the investors. An International Monetary Fund mission is expected to arrive in Pakistan in four weeks' time. Officials believe that the IMF might release some funds by end this month to ease the country's economy. Furthermore, they said there is a possibility that the IMF might increase the volume of funds. The donor agency has already agreed to convert the ESAF into poverty reduction and growth programme. However, the gory incident on Friday, assassination of Iqbal Raad, one of the lawyers in the defence team of the former prime minister Nawaz Sharif, shocked the investors. They off-loaded their holdings in haste, which made severe dents in the price run.

Analysts said that it would create more depression among the investors in the day to come. Selling pressure might surface this week, however, as the carry over charges or badla rates have shown downward trend in all the major scrips, PTCL, Hubco, ICI, Adamjee Insurance and Fauji Fertilizer and negative charges in PSO, technical buying might trigger. The week would be of four sessions as on Friday, Eid-ul-Azha would be observed. Only four sessions might discourage the speculators but low badla charges would help improve the price trend, analysts said.

PTCL on a business of 463.598 million shares recorded a fall of Rs 1.25 to Rs 32.90. Hubco on a trading of 270.739 million shares moved up to Rs 28.15 from Rs 26.55. ICI on a turnover of 240.148 million shares denoted an increase of 95 paisa to Rs 15.85 and PSO on a volume of 97.763 million shares closed at Rs 251.45, indicating a net drop of Rs 3.85.

The week was full of announcements, companies declaring good dividends (all in percent), Sapphire Textile 100 percent, Sapphire Fiber 62, Nishat Chunian 26 and 40 percent bonus, Fazal Textile 35, Gadoon 30 percent, Aruj Garments 25 percent. The Crescent Textile, Saif Textile and Umer Fabrics 20 percent each, Abbot Lab 17.5 percent, Premium Textile, Shadab Textile, Babri Cotton, Gulistan Textile, Nadeem Textile, Janan De Malcho and Union Bank 15 each. Sunrays Textile 12.5 percent, Thal Industries, Indus Dyeing, Paramount Textile, Janana (CP), Gulshan Spinning, Chenab Fibers, Gulistan Spinning, Mehran Sugar and Towerllers Ltd., 10 each, Husein Sugar Mills, Yousuf Weaving Mills and ICC Textile Ltd., 7.5 each.