960423

Bulls oust bear

in a blitz

RECORDER REPORT

KARACHI: At last the bulls took over the market on Tuesday, ousting bears in a blitz, which came as a pleasant surprise to all. They were inspired mainly by the improvement in Hub Power which will soon start its 500 KV turbine.

There was a general feeling that the worst was over and boom like situation had been heralded, so nearly all quarters struck good deals to reap a rich harvest before the coming Eid holidays. The tone of the rally was set by the sharp activity in PTC and Hub Power, and a sharp upturn in the prices of the two internationally linked scrips.

An independent expert believed that the improvement reflected the inherent strength of the base shares which are an attractive bait for any discerning investor at the current price levels.

According to one of the analysts of a leading brokerage houses, the first day of the new clearing week started on a positive note as equities gained some ground. The pre-Eid rally took the index up by almost 21 points. Trading scrips rallied, and the increase in Hub Power GDR rates forced the short-sellers to square their positions.

The KSE index registered a rise of 21.41 to 1541.89 as against 1520.53 of Monday. The major gainers were Dawood Hercules (Rs 10), Ghandhara Nissan (Rs 2.15), Hoechst (Rs 2), Hub Power (Rs 1.90), Crescent Bank (Rs 1.50), PSO, Shell, Dewan Salman, Nishat Mills, Dewan Textile and Bank of Punjab (Re 1 each).

Ali Asghar, of Fortune Securities, said that Hub Power gained nearly Rs 2 to cross the Rs 31 level. There was buying interest across the board from various quarters. For the next few sessions, he expected the market to be mixed and after the Eid holidays and before the budget in June, a rally was likely occur due to expectations of fresh injection of funds into the market.

He added that the bidding for the 26 percent stake in Bankers Equity had been postponed to May 8, but it remained to be seen if it would not be postponed again. However, the effect of another postponement on the stock price would be negligible at this point in time.

The management of the KSE has issued show cause notices to 187 listed companies declared defaulters which failed to pay any dividend for the last five years or had violated the listing rules and regulations of the KSE. According to Ali Asghar, this should restore some credibility as the KSE is trying to regulate companies to perform better financially and pay some type of return to the shareholders. This move should improve corporate governance in the future.

Besides improvement in Hub Power rates, two reports helped in restoring the confidence of the investors. The USA will refund $124 million to Pakistan in a day or two, which will be followed by the release of $368 million, and the statement of the Prime Minister that before the budget the country would be able to curtail the inflation rate to nine percent. The statement of CBR Chairman Alvi Abdur Rahim that the revenue target of Rs 265 billion could be exceeded, was another encouraging news.

According to a stock broker, though these are positive developments the market is in great need of a rescue operation and fresh injection of funds. If some foreign funds filter in, the equities are bound to stage a comeback.

In the short term, the fear of KSE index falling below the 1500 level has been allayed, said an analyst. The market is poised for recovery as it is in a highly oversold position and the bourse justifiably looks forward to heavy short covering at current lows.

The volume on Tuesday improved slightly to 27.302 million shares as against 17.244 million shares of Monday. Financial institutions placed deals in PTC, Hub Power, Lucky Cement, Fauji Fertilizer, PSO and Dhan Fibres.

Among the 326 active issues, 135 carried minus signs as against 119 gainers while 72 remained unchanged.

Hub Power on a business of 12.375 million shares showed an appreciable gain of Rs 1.90 to Rs 31, while kerb rate of the scrip was oscillating between Rs 31.20 to Rs 31.50. Only three issues landed in the minus column under the lead of Pak Oilfields, which depicted a fall of Rs 2, while the gains were in the range of 25 paisa to Rs 1.90.

PTC on a turnover of nine million shares moved up to Rs 32.60 from Rs 31.75. Pak DataCom recovered Re 1 and PIAC rose by 10 paisa, while Telecard on trading of 1,500 shares showed a decline of Rs 3 to Rs 70.

Fauji Fertilizer slipped to Rs 73.50 from Rs 74.15, as around 1.089 million shares changed hands. Dawood Hercules and Hoechst led the gaining side, while SK&F and BOC depicted decline of Rs 4 and Rs 3 respectively.

Lucky Cement denoted a rise of 30 paisa to Rs 16.65, on total deals of 860,000 shares. Activity on this counter was quite brisk but gains and losses were mostly in fractions, barring Essa Cement, which showed a rise of Re 1, and Gharibwal and Mustehkam Cement which registered a loss of Re 1 each.

New Jubilee Insurance declared a dividend of 20 percent and bonus of 10 percent after earning a net profit of Rs 38.988 million and Cyanamid Pak declared a 15 percent final dividend after earning a net profit of Rs 48.495 million. The company has already paid an interim dividend of 10 percent.

BOND SECTION: The buying rate of FEBC was quoted at Rs 106.75 and selling Rs 107.