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Oil, bank equities sustain gains

KARACHI — Pakistani stocks yesterday staged a smart rally on active short-covering in the leading oil shares triggered by the perception of some positive developments on the political front in the backdrop US diplomat's last week's talks with the president to end uncertainty.

The KSE 100-share index recovered 157.86 points at 13,239.87 as compared to 13,082.01 points on the strength of leading oil and bank shares, notably OGDC, Pakistan Petroleum,Pakistan Oilfields, National Bank and Bank of Punjab, adding Rs45.00 billion to the market capital at Rs4,048.00 billion.

Its Junior partner, KSE 30-share index also rose by 188.89 points at 15,725.63 as against 15,536.74 at the last weekend. " I don't attribute the sanp rally to the revival of foreign demand in the leading oil shares at the currently lower levels but price flare-up in them suggests this", said an analyst "the trading in the next couple of sessions will show whether or not the support is genuine of inspired".

However,removal of $50 per barrel pricing ceiling on the oil exploration companies owing to steep increase in international crude rates during the recent weeks to well over $90 was said to be the chief stimulating factor behind the rally in the oil sector,analyst Ahsan Mehanti said adding "dismissal of petitions against the presidential election by the apex court was another supporting factor".

Some others fear a negative fallout of president's refusal to lift emergency prior to the national elections as suggested by the US diplomat's during his recent visit leading to aid-linked some financial problems.

"Investors should not read too much in the president's current stance on the emergency", they said "it will be lifted on his own timings".

But some independent observers of the developing political situation say all is not well on the investment front,notably in the share business irrespective of some positive developments in relation to continuity of the existing economic policies.

The short-covering was largely selective and was confined to some risk-free shares indicating that no one was inclined to go beyond the safe havens because of the tense situation on the political front and the absence of market trend-setters,they added.

Leading gainers were led by JS & Co and Nestle Pakistan,up by Rs21.30 and 25.00,while losers were led by Unilever Pakistan and Siemen's Pakistan, off by Rs25.00 and 95.00.

The fact losers maintained a fair lead over the gainers indicates the support largely originated from selected counters having the holding capacity for a longer period.

Trading volume showed a modest rise at 177 million shares as compared to 139 million shares at the weekend session but losers maintained a modest lead over the gainers at 170 to 149,with 35 shares holding on to the last levels.

OGDC topped the list of actives,higher by Rs4.40 at Rs.119.25 on 22 million shares.