September 16, 2002	Monday	Rajab 8, 1423

Stocks ran into technical selling last week as the leading bears moved in to take profits at highly inflated levels in most of the blue chips, including the PSO and the Hub-Power.

But it was largely the energy sector’s weakness, notably the PSO, the Shell Pakistan and the Pakistan Oilfields followed by some MNCs in the chemical group, which worked against the underlying sentiment.

There was, however, no sign of anguish or worry among bulls over fall of index from the coveted level of 2,000 points, indicating that they were in a position to push it to that level, any time they chose.

A decline of 3.5 per cent or 54 points during the weak needed a technical correction and the market’s oversold position is not that alarming.

Investors await President Musharraf’s return from the US and some positive outcome of his visit, including peace moves brokered by the US president about bilateral talks between Musharraf and Vajpayee. This could trigger a renewed bull-run on the market by next week.

The reversal was in line with the global bourses amid fears that the anniversary of Sept 11 incident may be repeated, as speculated by the US and its allies. But the legendary date passed into history without any incident anywhere in the world.

The local market fell in unison with the global markets, although a good part of selling was technically-motivated rather than the prevailing panic on world bourses.

The KSE 100-share index failed to sustain the coveted level of 2,000 points which it had attained after 30 months, but analysts predict its next chart point could be 2,200 points.

It finally finished at 1,955 points as compared to 2,009 a week earlier, wiping out Rs8 billion from the market capitalization at Rs454 billion as the heavily capitalized shares such as the PTCL, the Hub-Power and the PSO failed to maintain their peak level on late selling.

“The Sept 11 passed peacefully amid the mourning ceremonies at the site of the World Trade Centre in New York”, one broker said, “the negative impact of the event did echo on world financial centres”.

However, steep decline in the turnover figure reflects that the bears have targeted leading base shares just to demonstrate their power as the market trendsetters, but failed to evoke sympathetic selling from other quarters.

“I don’t think bulls can be so easily beaten on a level-playing field and in a market having to its credit more positive news than the negative”, says a broker, “all good ones are still on their side”.

The index finally ended at 1,954.68 points as compared to previous 2,008.86 — off 54.18 points or 3.5 per cent — owing to active selling in the PTCL, the Hub-Power and the PSO, which together hold a weightage of 50 per cent.

“The bull honeymoon with the coveted index level of 2,000 points may not be over”, commenting on the snap reversal of index says a leading stock analyst, “bulls now have more options and willpower than few months back to fight out their way to a decisive victory”.

Others maintain that there is nothing wrong with the snap reaction as it is a part of share business and in most cases adds to the inherent strength of the market.

“An attractive bait for the sell-off of oil giant, the PSO and some others, including the disinvestment of five per cent more shares of the National Bank and higher dividend announcements from some leading companies are in the pipeline to boost the investor-confidence in market’s ability to stay above the 2,000 points index level”, they added.

General perception about the future market direction is that it could maintain its current upward thrust, technical corrections, notwithstanding the strength of developing financial scenario.

The presence of foreign fund buying on the selected counters and steady inflow of liquid funds from the dollar trade to share business will continue to inspire fresh buying from the general investors as well as the day traders.

Barring Adamjee Insurance and some other leading shares, most of the pivotals came in for active selling and fell under the lead of the PSO, the Pakistan Oilfields, the Shell Pakistan, the Shell Gas owing to post-dividend selling.

Some of the leading ICP mutual funds came in for active support ahead of their privatization and rose for 13th, 10th and 9th ICPs, Thal Jute followed by the Lawrencepur Woollen, Al-Abid Silk, Artistic Denim, Shafiq Textiles, Unilever Pakistan Spencer Pakistan and many others.

Losers dominated the list under the lead of the energy shares and some leading MNCs including the BOC Pakistan, the Pakistan Oilfields, the Parke-Davis, and the Wyeth Pakistan, biggest declines were recorded in the Wyeth Pakistan, the Parke-Davis and some other leading stocks.

Trading volume fell further to 512 million shares from the previous 850 million in the absence of strong demand from the institutional traders, and the speculative forces.

The Hub-Power, the PTCL, the PSO, Adamjee Insurance, the MCB, the NBP were among the most actives scrips, followed by the ICI Pakistan, the Engro Chemical, the Telecard, Dewan Salman, Sui Northern, the ICP SEMF, the D.G.Khan Cement, Pak PTA and several others.

FORWARD COUNTER: Speculative issues on forward counter also followed the lead of ready section where the PSO remained under pressure on persistent selling and finished lower.

The PTCL followed them but fell fractionally on active short-covering at the dips. Others traded modestly amid either-way movements.—Muhammad Aslam