December 10, 2001	Monday	Ramazan 24, 1422

STOCK prices increased from the previous lows during the last week as a combination of positive news both on Afghan and foreign aid fronts continue to inspire fresh buying from all and sundry.

The chief sustaining factor was the report that Pakistan has won the $1.3 billion Poverty Reduction Growth Facility (PRGF) from major donors during Dec 6 meeting, a consensus interim set-up in Afghanistan and surrender by Taliban in its last stronghold of Kandhar after a mutual peace agreement between tribal leaders.

Unlike previous week when the last day session saw erosion of early gains, market ended with most of the initial gains intact and a buoyant underlying sentiment.

Stocks steadily limped back to hit the index level of 1,400 points boosted by the perception of peace in Afghanistan after the deal on interim set-up and further rise in forex reserves and a stable rupee. The KSE 100-share index recovered to finish around 1,380.50 from the previous 1,356.00.

There are more positive news than any perspective investor would like to have — stimulating among them the World Bank nod to $1.3 billion Poverty Reduction and Growth Facility (PRGF); broad-based interim set up in Afghanistan; good payouts and attractively lower levels at which most of the blue chips having potential to rise to new highs.

Buying support though remained largely selective it was fairly persistent sans the strong presence of the institutional traders and did not allow the speculative forces to tilt the balance in their favour.

“The market outlook is beyond the index level of 1,400 points before the year is out and in between leading stocks as well as second-liners could rise to any highs”, stock analyst Faisal Abbas of the AHRL Securities predicts.

But stock analyst Ali Reza at the Moosani Securities commenting on the low traded volume laments “no big business no margin.

Trading volume over the week has declined to below 40 million mark.

A 200 per cent cash dividend by the Grays of Cambridge did not stir any speculative selling in its share because of the shortage of floating stock as the rate of payment compared unfavourably with the previous year’s payout of 400 per cent cash plus 25 per cent bonus shares. However, it has risen by Rs75 in the sessions preceding the dividend announcement.

Other dividend announcements from the Pak Reinsurance Co, Dewan Salman, Kohinoor Genertek and right shares of 100 per cent by Bolan Bank and a dozen others were both up and below the market expectations but played an important role in enabling the market to sustain its upward drive.

The general perception is that a considerable fall in “Badla” business over the week is expected to give the needed push to hereto indecisive market in the coming weeks, one broker said adding “much will depend on the behaviour of the institutional traders.

Stock analysts at the W.E. Financial Services predict the index could give repeat performance of the previous week and after early attempting to breach the psychological barrier of 1,400 points, may falter half way in the absence of strong follow-up support.

But long-term market outlook appears a bit bullish on the ground that the basic economic factors are undergoing a major change, they said adding “much will depend on the size of the PRGF”.

The same view is also held by the stock analysts at he other leading brokerage houses who predict that the PRGF could pave way for a chain of foreign aid on other accounts including loan rescheduling facility at the Paris Club meeting.

“The release of funds under the PRGF could mean further boost to forex reserves and in turn strong rupee and lower debt repayments and trade deficit”, stock analysts at the Finex Securities say.

Thus all eyes are focused on the inflow of promised foreign aid for supporting the US war on terrorism and its impact on the economy as well as the capital markets.

All the low-priced pivotals came in for active short-covering at the lower levels under the lead of the PSO, Nestle MilkPak, Bhanero Textiles, Michell’s Fruits, Al-Ghazi Tractors, Packages and the Security Papers.

Other good gainers included the Muslim Insurance, Mari Gas, Crescent Steel and Lever Brothers, Murree Brewery after 25 per cent cash dividend, Gatron Industries, Nishat Mills and some others.

Losers were led by the 9th ICP Mutual Fund, International Investment Bank, Faisal Spinning, Saif Textiles, Shell Pakistan, Packages and Shezan International, National Foods, Attock Refinery, Atlas Battery, Siemens, Aventis Pharma and Glaxo-Wellcome Pakistan.

But the largest decline of Rs18 was again noted in the Wyeth Pakistan, which has shed about Rs90 over the week for no apparent bearish reason. Its share is following the lead of Colgate Pakistan, which also fell sharply daily during the last two weeks, losing about Rs35 for its 10-rupee share.

Trading volume remained on the lower side because some of the leading shares including the Hubco were being traded on spot basis, falling to below 200 million share mark, bulk of which remained confined to the PTCL and the Hubco.

Others actives were led by the PSO, Sui Northern Gas, Nishat Mills, Adamjee Insurance, Engro Chemical, the MCB, the ICI Pakistan, Lucky Cement and the D.G.Khan Cement.

Forward counter also followed the lead of the ready section where the most active list was topped by the PTCL and the Hub-Power, while the PSO moved both ways amid wide fluctuations and the MCB and the Engro Chemical ascended.—Muhammad Aslam.