ALL ROADS again led to the Karachi Stock Exchange last week as investors were not inclined to take even a technical breather and rode the bandwagon with the conviction that the lean period is now far behind.

Their perception about a major breakthrough on all fronts may not be based on speculations, but on some solid facts and the prevailing statistical data.

The market capitalization has touched the coveted level of Rs400 billion after adding about Rs22 billion over the last week, the KSE 100-share index had successfully broke five barriers and is heading to hit the new chart point of 2,000 and if all goes well with the President’s visit to the US and tension on borders defuses, it could rise beyond this level.

The KSE 100-share index decisively jumped through the psychological barrier of 1,800 points boosted by perceptions of a robust economy and a fresh aid package during Musharraf’s US visit. But the late selling allowed it to close with clipped gain at 1,785.00 up 115 points or seven per cent over the last week’s level.

“It was a judicious blend of both local and foreign buying for the fifth consecutive week as investors were not inclined to take even a technical breather aided largely by bullish basic economic fundamentals.

President’s US visit and the reports of fresh aid package have reinforced the investor-perceptions about a continued bull-run and the consequent buying euphoria.

An oil market report also proved a positive factor, triggering buystops in the energy shares under the lead of the PSO and the Shell Pakistan.

After moving lower to 1,640 the KSE 100-share index finally bypassed the psychological barrier of 1,700 point and settled well above at 1,785.50, adding Rs22 billion to the market capitalization.

But analysts were still unsure whether or not the technical correction is overdue in a heavily oversold market and how it will balance its statistical position and what will be its impact on the trading pattern in the weeks ahead.

The speculative run-on the PSO and some other pivotals including the Engro Chemical, Hub-Power, the ICI Pakistan and Fauji Fertiliser on the forward counter continued and as a result, all broke the circuit braker of Rs1.50 imposed by the KSE high-ups to check either-way speculative run on the leading shares.

The index opened higher from the weekend close and steadily rose by about 40 points to 1,711 at which level profit-hunters moved in and took profits at the highly inflated levels. Although the final closing was up, the mid-week decline at 1,640 has cut its cumulative rise.

But that in no way reflects that the current run-up is overdone despite the fact that market is in a highly oversold position. Analysts predict that the current buying euphoria could be sustained until the president’s US visit beginning from Feb 12.

The market could pass through a moderate correction but analysts at the W.E.Financials ruled out any possibility of a big shake-out at this stage as all the fundamentals are more than bullish.

“President’s US visit starting from Feb 12 and proceeded by the finance minister could pave the way for more financial and trade benefits in addition to fresh credit lines”, they hope and added to it is “some soft talk from India on the political issues”.

However, no one could dispute the fact that a correction is long overdue but as investors are not inclined to take profits aided by the bullish fundamentals, the upward drive is expected to continue until there is some big negative news, sort of war.

“All the aiding factors lead to a bull-run”, stock analysts at the Moosani Securities predict “the advent of strong foreign buying, outflow of huge funds from dollar to the share business, rising foreign reserves and reopening of Afghan trade route has reinforced the perception that the lean period now is far off”.

The successive breach of five barriers by the index, a 25 per cent increase in the index level and a massive recovery of Rs75 billion in the market capitalization, all point to genuine price flare-up, brokers say.

Both the range of stocks that came in for trading and the turnover figure showed a sizeable expansion, reflecting that the buying is terribly broad-based and reflective of buoyant market.

Prominent gainers were led by the energy sector under the lead of Pakistan Oilfields, National Refinery, Engro Chemical, Adamjee and Central Insurance, Hub-Power, Pakistan Oilfields, the 9th ICP, the ICI Pakistan but the largest rise was noted in the PSO, on active short-covering at lower levels.

The biggest rise of Rs27 was recorded in Fateh Textiles, followed by the General Tyre, the BOC Pakistan, the SK&F, Pakistan Refinery, Lever Brothers Pakistan and most of the textile and cement shares. The Grays of Cambridge ended with clipped gains.

Losers were led by the Wyeth Pakistan, which after rising by about Rs70 over the last week, fell by Rs18 followed by the Grays of Cambridge off Rs25. The Shell Pakistan also fell during the post-interim dividend sessions as the management did not declare bonus shares in addition to the interim dividend of 40 per cent.

Trading volume was well above one billion shares, despite the four-day week owing to Kashmir holiday on Tuesday — thanks to massive activities in the Hub-Power and the PTCL, which together accounted for 2.65 million shares at the fag-end of the week. It fell to 1.146 billion shares from the last week’s all-time peak level of 2.212m shares.

Bulk of it again went to the credit of Hub-Power on the expectations of interim dividend at its board meeting next week, followed by the PTCL. Both accounted for more than 80 per cent of the total turnover.

Other actives were led by the Sui Northern, the PSO, Fauji Fertiliser, the ICI Pakistan, the KESC, Dewan Salman, Engro Chemical, the D.G.Khan Cement, the PTA, Lucky Cement, the MCB, Adamjee Insurance, the FFC-Jordan Fertiliser, Japan Power and several on other counters. —Muhammad Aslam