LAHORE - The Exploration and Production (E&P) companies dominated the stock trading show with two companies, including the OGDC and PPL secured the top slot in five best performing scrips of 2010YTD while Lotpta, once again, with highest return of 71percent beat other stocks, experts said. According to stock market experts, foreigners remained darling of local bourses, as their focus remained largely in E&P companies particularly the OGDC. Due to its big float and cheap valuation in region, foreigners remained aggressive in OGDC which posted 58 percent return, beating benchmark index by 32 percent. Other than the OGDC, PPL also performed well with 39 percent return mainly due to volume led earnings growth. Investors remained cautious on OMCs, cements and banks as most of the scrips in these sectors underperformed the index. OMCs primarily due to circular debt and frequent changes in oil pricing mechanism while cements due to persistent over supply situation and lower margins. On the other hand most of the banking stocks did not perform in line with broader market due to slowdown credit growth led by weak macros and provisioning related concerns. DGKC, ATRL and PSMC remained at bottom 5. Underperformance by ATRL is primarily due to negative fuel margins. Similarly, Pak Suzuki (PSMC) due to its lowest margins remained the worst performing stock in our sample companies. Farhan Mehmood, a noted equity trading expert, said in a note that the Lotpta remained the major attraction for market players as it outperformed benchmark index by 45pc with 71pc return with dividend in 2010YTD. Thus, the scrip remained the best performing stock in last two years, he added. In 2009 the stock posted highest return of 400pc. Similarly, NRL, due to its stable lube margins and better dividend payout secured second position with 59pc return. The share price of Lotpta has increased by 6 percent MTD and 57 percent 4QCY10TD. However, it has exhibited immense volatility since early Nov10 when international PTA prices started soaring at an unprecedented pace. Similarly, ICI has also exhibited an uptrend with its share price up by 4 percent MTD and 22 percent 4QCY10TD. The former produces PTA and latter, PSF which are both products of the petrochemicals chain which has lately been characterized by volatility in the international market. More importantly, both the stocks and their business models continue to be in the limelight as intl cotton prices take another shot at breaking the previously established barrier. NY Futures contract hit a record high of USD1.59/lb this week before stabilizing around USD1.48/lb at present. Consequently, the next best alternative i.e. PSF has continued with an uptrend, allowing the entire chain to benefit from higher margins. According to the latest data available, average PSF prices in the domestic market have risen by 25 percent to Rs168/kg from 134/kg in 3QCY10 and Rs118/kg in 4QCY09. The increase in prices has come on the back of 1) robust demand for the product from the downstream industry, 2) spike in international cotton prices leading to demand being diverted to its alternative, that is, PSF, and 3) increase in international PSF prices. Sana Iqbal Bawani, a noted brokerage house analyst, believes PSF margins would also experience an expansion in the ongoing quarter; although PTA prices also rose by 25 percent during the same period, MEG, another raw material for PSF, did not increase by the same proportion. PSF margins are expected to average at USD650/ton in 4QCY10E compared to USD528/ton in the last quarter and USD366/ton in the same period last year. ICI, being the second largest producer of PSF in the country and running at full capacity, is bound to benefit from the afore-mentioned scenario. Moreover, the segment contributes 51 percent to the companys total revenues and posted a gross margin of 12 percent during 9MCY10 which will be enhanced to 17 percent in the final quarter on the back of improved margins.