KARACHI, Aug 28: The trading activity on the stock market on Thursday fell to a low ebb as investors played safe and did not opt for active short-covering at the current lows after the KSE imposed price freeze at the Aug 27 level.

The market decline was, however, halted as the KSE 100-share index showed a modest recovery of 58.85 points at 9,203.78 on stray short-covering in banking and oil shares at slightly higher levels.

However, leading investors remained conspicuous by their absence awaiting further developments on the new trading rules.

Under the new mechanism aimed at putting the best performing market of Asia back on the rails after a massive decline of about 40 per cent during the last two months, both the KSE index and prices have been frozen at the level of Aug 27, till further order.

But the lower and upper locks in shares will be valid on the higher side but not below the frozen levels, analysts said. “A ruling price of a share could appreciate to Rs55 in day’s trading but not below Rs50 under the new rules”.

Early last month both the lower and upper locks were revised downward to one per cent and upward 10 per cent but they failed to sustain the brief run-up, they said.

“The freeze certainly halted the market’s persistent decline but has taken away steam out of it,” observed a broker, adding “but for how long no one could tell”.

Analysts, however, doubted about the positive impact of the new mechanism on the market as investor worries have multiplied during the recent weeks, including a terribly weak rupee, political uncertainty and exit of the foreign investors.

“Until the investor confidence is restored by some positive steps, higher dividend and bonus shares and regulatory measures would not work,” said a leading analyst.

“After having suffered massive losses, investors have no appetite to re-enter even in a highly oversold market”.

A light volume of about 56m shares reflects that investors are still in two minds how to operate and may take some more time to be back in the market.

Owing to price freeze, there were no losers but on the other hand Arif Habib Investment and Unilever Pakistan were among the top gainers, up by Rs70.30 and Rs20 respectively. They were followed by National Equities, MCB Bank, IGI Insurance, Pakistan Tobacco, National Refinery, Ferozsons Lab, Service Industries and Clover Pakistan, higher by Rs3.34 to Rs6.97.

Turnover figure fell to 55m shares from the previous 95m shares but there was no loser as compared to 133 gainers, while 130 shares managed to end at the last levels.

NIB Bank topped the list of actives, steady seven paisa at Rs8.52 on 6m shares followed by OGDC, unchanged at Rs97.93 on 3m shares, MCB Bank, higher by Rs4.25 at Rs243 on 3m shares, D.G. Khan Cement, unchanged at Rs39.28 on 2m shares, PTCL, unchanged at Rs31.50 on 2m shares and Pakistan Petroleum, higher by 30 paisa at Rs210 on also 2m shares.

Other actives were led by Zeal Pak Cement, up by nine paisa at Rs1.25 on 6m shares, followed by Nishat Mills, steady by six paisa at Rs46.77 on 4m shares, Asim Textiles, unchanged at Rs1.50 on 2m shares and TRG Pakistan, unchanged at Rs3.82 on 1.215m shares.

DEFAULTER COMPANIES: Asim Textiles came in for active short-covering at the previous rate of Rs.1.50 on 1.600m shares followed by Norrie Textiles, steady by one paisa at Rs1.43 on 0.509m shares and Unity Modaraba, firm by two paisa at 55 paisa on 0.484m shares.

DIVIDEND: East-West Insurance, interim bonus shares at the rate of 13 per cent, right shares on its life shares at 17.5, Adamjee Insurance interim, 15 per cent and Biafo Industries, cash 20 per cent.