Fresh buying in PPL and Bank of Punjab boosted sentiments of the local bourse on Wednesday, where share values posted mild gains with the index recording a fresh gain of 17 points amid improving volume of transactions.

The LSE-25 index closed at 2663.71 points as against 2646.85 of Tuesday, while volume also showed an increase of 11.478 million shares to 59.255 million from 47.777 million shares of the previous closing session.

The trading commenced with a healthy note and according to stock brokers, the market spent most of time in positive territory.

However, in last minutes, weighed down by profit-taking, it shed part of early gains forcing the index to finish with a capped gain, they added.

Stock analysts said due to massive losses during the last two consecutive sessions, the levels had turned very attractive, therefore, recovery was about to take place on Wednesday.

At one stage in the first half of the session, the index was up by 64 points, but last-minute profit-selling led to erosions due to which the index shed a sizeable chunk of early day's gains.

PPL and Bank of Punjab led the day's proceedings, telecom sector received losses while cement sector painted a mixed picture.

Commenting on the Wednesday's recovery, Mirza Ejaz Ullah Baig, director, Capital Vision Securities Ltd, said following last two days' massive battering, the rates were abnormally low, which lured investors to pick low-priced stocks, adding: "Though the market staged a smart recovery on Wednesday with fresh gains yet I do not think a positive trend has started in the market."

At the moment when majority of investors, including the big-wigs are absent from the market because of the CVT and the withholding tax imposed on share transactions, the SECP announcement to enforce margin financing rules from next month has added fuel to fire, he pointed out.

There are various question marks regarding the procedural formalities and execution of the margin financing rules which has scared investors, he explained.

He said that statistics show that volume of average badla transactions at the KSE is Rs 23-30 billion which is financed by private investors, and added that with the enforcement of margin financing this practice will not take place.

So the SECP announcement has disappointed all such investors.

"Personally I believe that this new change is a pro-investor development and in the long-term it will have a healthy impact on the capital market," Baig observed.

In his view, the CVT is the actual threat, which will continue taking the market hostage if it is not withdrawn, he said, adding as a matter of fact, the continuous decline in the index and the volume is an indication to the government that the CVT and other newly-imposed levies are not acceptable to the market.

In all, 89 scrips changed hands, of which, 31 were up, nine lost their worth while 49 were unchanged.

Among the leading gainers, PPL was up Rs 2.70, Bank of Punjab and Habib Bank Mod 1st Rs 2.10 each, Fauji Fertiliser Rs 1.60 and PSO Rs 1.45.

In the minus column, Fauji Cement shed Rs 60 paisa, PTCL 55 paisa, Worldcall Communications 45 paisa, Union Bank 20 paisa, and Sui Northern 15 paisa.

The Bank of Punjab was the volume leader with 19.980 million shares followed by DG Khan Cement with 7.994 million shares turnover.

Copyright Business Recorder, 2004

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