KARACHI, April 12: Trading on the Karachi bourse on Monday resumed on a bullish note as investors made fresh heavy covering purchases under the lead of financial institutions amid brisk trading.
The KSE 100-share index broke the barrier of 5,400 points at 5,443.83, up 72.20 points.
An idea of buying euphoria may well be had from the fact that the KSE has to apply circuit breakers in about three dozen shares to contain the price flare-up after the carryover rates touched a high mark of 17 per cent.
"In view of the market's statistical position, a correction of about 50 points or so may be around in the first session," fears Faisal Abbas, a leading stock analyst at AHRA. "But bulls are expected to back in the market and will again lift the index to pre-reaction levels."
The index ended with an extended gain of 72.20 points at 5,443.83 as compared to 5,371.63 at the last weekend as all the leading base shares rose further higher under the lead of PTCL, which burst into activity followed by reports that its management has launched phone bill cards.
The market capital also soared to Rs1,453.219bn against the previous Rs1,434.697bn, up Rs18.522bn owing to a steep rise in the heavily-capitalized shares.
But the day's highlight was provided by heavy buying, both in National Bank of Pakistan and Muslim Commercial Bank, which appeared to be virtually racing towards their new chart points on a sustained buying. PTCL also remained in strong demand on reports that it has launched phone bill cards.
No one could deny the fact that the market is in a highly overbought position, but the long-overdue correction is not forthcoming. Leading stock analysts failed to pinpoint any specific reason behind this market phenomenon.
"It is not that far to name the buyers in an overbought market," says a leading broker, adding "but the question is whether or not small investors should ride the bandwagon."
"There could be a massive shakeout around, which may take along with it everything that comes in its way," says another broker. However, strong financial buying reflects the market may fall from the current levels but not to that level being predicted by some. "It has sound reasons behind to stay bullish," he adds.
"The American factor, which has made deeper inroads in the investor psychology, will not disappear and will remain a major sustaining factor possibly up to the index level of 6,000," market sources said.
Bulk of the support was, however, again remained confined to some leading individual shares, notably National Bank, which has risen by about Rs12 during the last week amid heavy covering purchases followed by gas shares on reports of massive Gulf-based investment in this sector. MCB followed them on reports of higher interims.
Cement shares did not react bearishly to reports that the government plans to amend the current monopoly control rules to discourage price manipulation by some industrial sector.
Plus signs dominated the list under the lead of HinoPak Motors, Aventis Pharma, EFU General, Javed Omer, Central Insurance, Atlas Battery and Shell Gas LPG, which posted gains ranging from Rs5.05 to Rs18. There were many other good gainers too.
Losses on the other hand were fractional barring Attock Refinery, Clover Pakistan, New Jubilee Insurance, Island Textiles and Siemens Pakistan, off Rs3.70 to Rs5.
Trading volume soared to 782m shares from the previous 700m shares as gainers held a strong lead over the losers at 246 to 150, with 46 shares holding on to the last levels.
PTCL topped the list of most actives, up Rs1.55 at Rs43.35 on 99m shares followed by Sui Southern Gas, higher by Rs1.35 at Rs40.05 on 93m shares, National Bank, sharply higher by Rs3.75 at Rs77.60 on 56m shares, MCB, higher by Rs4.20 at Rs60.80 on 53m shares, and Lucky Cement, firm by Rs2.65 at Rs38 also on 53m shares.
Other actives were led by OGDCL, firm by 40 paisa on 51m shares, Nishat Mills, Rs3.55 on 44m shares, D.G. Khan Cement, up Rs1.10 on 42m shares, Dewan Salman, higher by Rs1.20 on 41m shares and Fauji Cement, steady by 10 paisa on 35m shares.
FORWARD COUNTER: PTCL also actively traded on this counter in sympathy with its counterpart in the ready section and rose by Rs1.50 at Rs43.40 on 15m shares followed by Dewan Salman, up Rs1.10 at Rs27.40 on 6m shares, MCB, higher Rs4.25 at Rs61.05 on 5m shares, FF Bin Qasim, firm 25 paisa at Rs23.75 on 4m shares.
Nishat Mills topped the list of other actives, higher by Rs3.55 at Rs51.15 on 3m shares. ICI Pakistan and Fauji Fertilizers were also actively traded, up Rs1.30 and Rs2.35 at Rs84.35 and Rs124.85, respectively.
DEFAULTER COS: Bank shares attracted strong support and rose sharply under the lead of Islamic Investment Bank and Standard Investment Bank, higher by Rs1.50 and 10 paisa, respectively, at Rs9.75 and Rs9.65 on 1.479m and 1,159m shares.
Biafo Industries followed them, up one rupee at Rs9.85 on 1.104m shares, while some others were also turned out to be large volumes.
DIVIDEND: Fayzan Manufacturing Modaraba, cash five per cent; Islamic Investment Bank, cash five per cent, preference shares of the same amount; Union Insurance Company, nil.
