THE KSE 100-share index managed to finish above the coveted level of 2,000 points after four previous abortive bids, indicating that it could maintain its forward thrust in the coming weeks also, boosted by some positive corporate developments.

Above the market dividend and bonus shares pouring in each day have altogether changed the investor’s future perceptions about the size of capital gains and price appreciation on selected counters and no one is inclined to miss the rising market at this stage.

The interesting feature were the massively battered genuine investors who abhorred to re-enter market but were claimed to have resumed their covering purchases on low-priced blue chips, lured apparently by the bait of high dividends.

An accelerated pace of sell-off of the state-owned units and higher dividend announcements by most of the leading companies continued to inspire strong short-covering from all quarters, signalling the market is heading to establish new records, both in terms of price flare-ups and trading volumes.

The bull mood to stay above the 2,000-point index level is well-manifested in investors’ perception who were not weighed down by the Wednesday’s terrorist killings in the city and behaved orderly.

The KSE 100-share finally finished above the 2,000-point level as compared to previous week’s 1,981.08 points, lifting the total market capitalization to Rs463 billion from Rs458 billion a week earlier. Most of the leading MNCs, notably the Shell Pakistan, the Siemens, the General Tyre and leading base shares closed the week on a higher note amid brisk trading. It finally ended around 2,019 points, up 2.5 per cent or about 40 points.

The index has breached through the 2,000-point barrier for fourth time during the current month creating doubts among the investors about its ability to sustain or not, during the pre-elections sessions.

“All roads now lead to a sustained run-up backed by a lucrative bait of the sell-off of some mega state-owned units, the higher dividend and the steady inflow of foreign funds”, most analysts believe adding, “the pre-election rally could lift share values on blue chip counters to new highs”.

The 90-day deadline set for the sell-off most of the state-owned units seems to have enthused some of the leading foreign fund managers who have become active buyers in some of them, notably the PSO, the Pakistan Oilfields and the PTCL.

“There could be a brief interruption in the current sell-off programme because of the national elections but there is an evidence to believe that it is now on the priority agenda of the government to retire in part the huge foreign debt of $37 billion”, the analysts said.

The opening was, however, on the lower side but some rethinking about the likely bullish impact of the current drive to sell the state stake in most of the mega units on stock trading lured bulls back into the rings and they made extensive buying in most of them.

The minister of the Privatization Commission has announced October 30 as a tentative date for bidding to disinvest the controlling shares of the Pakistan State Oil (PSO) subject to the completion of the diligence process. The news was well-received in the market as was reflected by active short-covering in its share below the Rs200 per share mark.

“What seems to have triggered buystops in it were the names of the bidders, which reinforced the investor confidence about an imminent sell-off, in part of state stake in it”, analysts said.

Bidders are the Kuwait Petroleum, the Caltex, the Fauji Foundation, and the Midrock of Saudi Arabia, all well-known companies in oil trade and having sound financial positions.

“Bidding may be delayed beyond October 30, the important thing is that the sell-off of state-owned mega issues now is not a distant possibility”, says a leading analyst adding, “it could pave the way for the disinvestment of the PTCL, the ICP SEMF and some others units”. News of sell-off of another five per cent shares of the National Bank at a premium also evoked good interest.

An air of optimism prevailed in market as the leading bulls remained busy in planning buying strategy and portfolio adjustment in the backdrop of post-privatization financial scenario.

Plus signs again dominated the list under the led of Grays of Cambridge and Wyeth Pakistan, which rose sharply followed by the Abbott Lab, the Gatron, Adamjee Insurance, the 9th ICP, the Dilon, the Sapphire textiles, the Cherat Cement, Fazal Textiles, the International Industries, Aventis Pharma, Mitchell’s Fruits, Treet Corporation, Rafhan Maize and the Shell Pakistan, the PSO, the General Tyre and many others, which posted fresh sharp gains.

Leading losers were led by some energy shares under the lead of the Attock Refinery and the Pakistan Oilfields, Javed Omer, Noon Sugar, Dawood Hercules Pakistan Refinery, and Al-Ghazi Tractors followed them.

Trading volume showed a modest expansion thanks to active short-covering in most of the pivotals, notably those whose managements have declared good dividend. It rose to about 700 million shares from the previous 500 million shares, bulk of which went to the credit of the PTCL, the PSO, the D.G.Khan Cement and the Hub-Power.

Other actives were led by the Engro Chemical, the ICI Pakistan, the MCB, the National Bank, Dewan Salman, Sui Northern, Adamjee Insurance, Fauji Fertiliser, the ICP SEMF after the dividend, the KESC and some others.

FORWARD COUNTER: Heavy business was recorded in the forward share of the Hub-Power and the PSO, which on-balance managed to close with good gains. The PTCL, followed them and finished modestly higher. The ICI Pakistan, the Engro Chemical and the MCB were also actively traded, although they mostly followed the price trend of their counterparts in the ready section.—Muhammad Aslam