960414

KSE sees lowest

turnover for 3 months

RECORDER REPORT

KARACHI: Since base shares stayed in the limelight and were targeted by institutions and some of the leading brokerage houses, what would have been a drastic fall was converted into a soft landing at the Karachi Stock Exchange on Sunday.

Upon opening after the weekend holidays, the market behaved in the same fashion as it had been doing last week. The index earlier gained 13 points but towards closing shed most of it and closed only about six points plus. A bomb blast in Imran Khan's hospital in Lahore dampened the sentiment and the market remained stagnant afterwards.

The market registered the lowest turnover of the past three-months at 16.091 million shares on Sunday as against 42.259 million shares of Thursday. According to a dealer, the low turnover was mainly due to the liquidity crunch and lack of demand. Another factor cited by him was that the genuine investors are desperately in search of motivating news.

There was a modest recovery in the prices because of short covering at every dip. However, interest was still confined to choice scrips, as evident from the turnover recorded in PTC and Hub Power. Out of the total volume of 16 million shares, the two scrips accounted for 11 million. According to a dealer, the sustained recovery will only be possible when the demand spread to other counters. Activity in two scrips alone cannot pull out the market from the present mess.

Ali Asghar, of Fortune Securities, said that the sentiment was slightly positive due to the news regarding the commencement shortly of operations of both Hub Power and Lucky Cement will occur. There were reports that a bomb blast had taken place in Lahore at Shaukat Khanum Memorial Trust Hospital, which may weaken the market at the start of trading on Monday. At present, the index is consolidating at current levels and is poised to take off on any major positive news.

He said that the bidding for the 26 percent stake in Bankers Equity had been delayed. The government had given assurances to the successful bidders of BEL that no nationalised commercial bank DFI would sell its shares in BEL for three years and this would also apply to institutions recently privatised such as UBL. "This will have a positive impact on the price of BEL shares as the free float will decrease, and based on supply and demand dynamics the share price would increase. The government should get a good offer for the 26 percent stake which will drive the share price upwards", Ali Asghar remarked.

The KSE index posted a rise of 6.42 to 1561.72 as against 1555.30 of Thursday. The major gainers were Gillette Pak (Rs 5), United Distributors (Rs 3), Bhanero Textile (Rs 2.75), PSO (Rs 2), Dawood Cotton, Ciba Geigy and Abbott Laboratories (Re 1 each).

Bank shares did attract modest support under the lead of BEL, Bank of Punjab, PICIC, Faysal Bank and Askari Bank but short-covering did not go beyond filling some technical gaps. ICP Mutual Funds were traded with fractional losses barring KASB Premier Fund, 9th ICP and PS Fund Limited which showed some resistance against decline. Modarabas and leasing also depicted widespread falls.

The belief that the coming budget would be a tough one fuelled bearish sentiment. Rumours were also afloat that equity investment would be taxed and that sales tax was going to be extend to at least 300 items in a bid to mop up Rs 25 to Rs 30 billion to fill up the yawning revenue gap. All this was enough to paint a gloomy picture for atleast a short term.

According to an analyst, this is an artificial rally and could not live for a longer period because there is an inconsistent demand from local as well foreign institutions. Both these entities will probably remain quiet before the budget in view of the broadening of tax net.

Among the 344 active issues, 176 scrips carried minus signs as against 88 gainers, while 80 remained glued to their overnight levels.

Hub Power on a business of 5.951 million shares registered an increase of 65 paisa to close at Rs 30.10. Gains and losses were mostly in fractions, barring PSO which showed a rise of Rs 2, while around 15,000 shares changed hands.

PTC on a business of 5.285 million shares pushed up to Rs 32.85 from Rs 32.65. Prominent among the losers on this counter were Telecard, Pan Islamic and Pak DataCom, while PNSC and PIAC posted a rise of 25 paisa each.

Fauji Fertilizer on a turnover of 1.196 million shares moved to Rs 74.75 from Rs 74.50. Engro Chemical shed Rs 1.50, BOC, Glaxo Lab, Hoechst and Sandoz Pak denoted a decline of Re 1 each.

Lucky Cement on transaction of 812,500 shares showed a paltry rise of five paisa to Rs 16.60. D.G. Khan Cement (R) on trading of 337,000 shares remained unchanged at 50 paisa.

Mirza Sugar skipped payout after earning profit of Rs 2.359 million.

BOND SECTION: The buying rate of FEBC was quoted at Rs 106.50 and selling at Rs 106.75.

BOARD MEETINGS:

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