KARACHI, June 23: The KSE 100-share index on Monday consolidated well above the barrier of 3,300 on strong speculative buying linked to positive outcome of Gen Musharraf’s meeting with President Bush tomorrow and market of an aid package and a debt waiver of $1.8bn.
Both the total market capitalization and the index at Rs743.881bn and 3,344.86 points respectively stood firm at their newly attained peak levels.
Another supporting factor was the market talk of an early fixation of date of PSO sell-off and some other mega issues including PTCL and leading gas companies.
“It is pretty difficult to judge whether the current buying euphoria is genuine or speculative as no one could precisely tell from where the bulk of alternate bouts of buying and selling are originating,” market sources said.
The KSE 100-share index surged by 37.77 points at 3,344.86 as compared to 3,307.09 at the weekend session, signalling that the positive outcome of president’s visit linked to a fresh aid package and debt waiver for $1.8 billion could make its task easy toward its march to 3,500 level not in a very distant future.
Cement, energy shares and a number of secondary issues remained in strong demand and led the market advance to new peak levels amid an actively traded session, while some others finished close to their circuit breakers. Textile, auto, insurance and paper sectors followed them.
“The market literally ignored the official warning about higher badla volume and rates and its likely negative impact on the current mood of investors,” analysts said. “The Monday’s steep rise both in prices and the turnover figure is indicative of this new phenomenon.”
But one should ignore the risks associated with higher carryover volume, which assumes the role of a volcano when bears opt for it to check the speculative run, they said.
But the optimism linked with the president’s US visit and his meeting with the most powerful man at Camp David seems to have changed the investor mood at least for the near-term.
“No one is deterred by the allied fears to the current sustained market advance as both individual investors as well as financial institutions are guided by their own market future perceptions rather than the objective conditions prevailing on the local political front,” says a leading broker.
The more surprising development is that most of the secondliners have assumed the role of trend-setters in place of the leading base share as each session they finish with extended gains, no one knowing from where the support is originating and what is its basis.
Plus signs dominated the list of actives leading gainers among them being Honda Atlas Cars, Indus Motors, Ferozsons Lab, International Industries, Pak Reinsurance, Ahmed Hassan Textiles, Bolan Casting, Crescent Steel, Mehmood Textiles and Javed Omer, which posted gains ranging from Rs3 to Rs6.50.
Losers were led by Colgate Pakistan, Nestle MilkPak and Abbott Lab, off Rs4 to Rs5.95, followed by Shams Textiles, Babri Cotton Modern Textiles and Clariant Pakistan, lower by one rupee to Rs1.10.
Turnover figure rose to 392m shares from the previous 241m shares as the advancing shares maintained a strong lead over the losing ones at 262 to 125, with 46 shares holding on to the last levels.
Hub-Power topped the list of most actives, higher 45 paisa at Rs37.15 on 55m shares followed by D.G. Khan Cement, up Rs1.70 at Rs24.45 on 46m shares, FFC-Jordan Fertilizer, higher 50 paisa on rumours of its merger with the Fuaji Fertilizer on 42m shares, PTCL, firm 35 paisa at Rs28.20 on 39m shares and Dewan Motors, sharply higher by Rs1.95 at Rs27.95 on reports of higher sales on 23m shares.
Other actives were led by Nishat Mills, up Rs1.40 on 16m shares, Maple Leaf Cement, firm by 50 paisa followed by reports of increase in quota, Dewan Salman, up 40 paisa on 12m shares, WorldCall, steady 15 paisa on also 12m shares and Bosicor Pakistan, higher 35 paisa on 9m shares.
FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their counterpart in the ready section and rose sharply under the lead of PSO and Nishat Mills.
The notable feature was that trading also commenced in the forward July contracts side by side the maturing June settlements, which will be rung off the board during the next couple of sessions.
PSO was again actively traded on reports of early fixation of its final bidding date and rose by Rs3.90 at Rs231.90 on 16m shares. Its July settlement posted a rise of Rs5.50 at Rs233.50. Nishat Mills was other major gainer, up Rs1.45 at Rs33.55 on 2m shares.
Hub-Power followed them, higher 40 paisa at Rs37.20 on 7m shares, PTCL, up 25 paisa
at Rs28.30 on 5m shares and FFC-Jordan Fertilizer, higher by 36 paisa at Rs14.06 on 4m shares.
DEFAULTER COMPANIES: Brisk trading was also witnessed on this counter where shares of three dozen companies came in for active support under the lead of Medi Glass, lower 40 paisa at Rs4 on 0.205m shares followed by National Modaraba, firm by five paisa at Rs1.50 on 86,500 shares and S.S. Oils, off 60 paisa at Rs6.75 on 82,500 shares.
