Stocks turned into a highly volatile performance during the preceding week as investors played on both sides of the fence amid alternate bouts of buying and selling. The on-balance trend remained inclined uppishly.
Indications reverberate the market's mood to resume its upward drive by next week on the strength of strong selective support in banks, energy and fertilizer sectors. Analysts doubt any major change in the textile outlook, billed as a victim of higher lint prices and the allied problems on export front. But some others hope that the new incentive-laden trade policy may give it the needed boost in the second half of this fiscal.
A strong mid-week rally briefly put the market back on rails after leading institutional traders resumed covering operations at pre-determined lower levels on blue chip counters. However, badla-related selling allowed it to finish partially reacted.
After breaking the barrier of 5,400, the KSE 100-share index managed to finish well above despite late week end selling. It finally ended around 5,409.37, up 21.53 points and so did the market capital at Rs1,461 billion as compared to Rs1,454 billion, a week earlier.
The trade policy for 2004-05 is expected to generate a good bit of fresh covering purchases by next week specifically on those counters which are to benefit from the incentives, notably the textile. Exports will get the needed boost.
The euphoria associated with the Pakistan Petroleum IPO is over as investors are said to have made an investment of about Rs20 billion. There still, is no liquidity problem in the market as a lot of money will be found floating around for gainful investment.
Although, leading shares finished the week with clipped gains amid highly volatile price movements, the breach of psychological barrier of 5,400 points after several lean sessions reflects the control of bulls.
Snap increase in the carryover rates and volume to 13 and 28 million shares sent shock waves among jobbers and weakholders at the fag-end of the week. Most liquidated their long positions in a bit haste, halting the market's upturn.
But there is nothing to suggest that the mid-week run-up is overdone as board meetings of some mega issues and rumours of interim dividend and bonus shares could keep the investors in a good mood, said a leading broker.
Reports of a massive public response to the Pakistan Petroleum (PPL) share offer and the disappointment of big operators also signalled return of the prodigal son back to share business.
"The buying euphoria generated by the PPL issue may not have faded and many may continue to hope against hopes to be in its fold after balloting but the odds are heavy as the number of applicants is stated to be well above million," bankers said.
Next week could be very crucial for future direction of the market as board meetings of some leading companies are due amid rumours of good interims. The board of the PSO, Engro Chemical, Al-Ghazi Tractors, Fauji Fertiliser, Bank Al-Falah and some others will meet during next week amid strong rumours of interim cash dividend and bonus shares.
Earlier, record fall in the volume figure to a low 136 million shares reflect that all roads led to investment counters of banks rather to stock market. In addition to a massive outflow of liquid funds from the share market, general investors as well small savers were also out to try their luck to be a part of the mega issue, such the Pakistan Petroleum (PPL).
After opening higher, stocks came in for stray selling later and finished reacted as some leading bears manipulated higher badla volume figure to direct the market trend.
Selling in part was also attributed to the outflow of large amounts of cash to the IPO of the Pakistan Petroleum, which opened to public for four days i.e., to July 22. It appeared that the PPL issue will be massively oversubscribed despite some pre-IPO confusion created by the interested parties but later clarified by the KSE high-ups, brokers said.
According to unconfirmed reports the figure is expected to touch the highest-ever level of Rs20 by another IPO so far. With a yield of eight per cent, the PPL stands out on all key valuation norms above the OGDC. The governments vowed to give preference to small applicants of 500 shares.
Analysts said the market ruled sluggish earlier in the week with the opening of the PPL's IPO as some investors lined up their funds to buy its shares from the open market also, as it is billed a good buy at current rates.
However, there is nothing wrong with the market's inherent strength and bulls will be in the market after the IPO of the PPL was closed and a good part of the investment will be back in share business again, they said.
Minus signs dominated the list, although most losses were fractional reflecting the lack of support rather than large selling from any quarters. The Gul Ahmed Textiles, Javed Omer, Mehmood Textiles, Quetta Textiles, Unilever Pakistan, Pakistan Hotels, Siemens Pakistan and Pakistan Services were exceptions, which suffered fall.
The Nestle Milk Pak, Aventis, the ICI Pakistan were leading among the losers. But on the other hand some leading shares put on sharp gains under the lead of the EFU Life, Bank of Punjab, Packages, Jahangir Siddiqui bank, Picic and Arif Habib Securities, the largest rise of Rs42.95 being in Picic (right share).
Other good gainers were led by the Dewan groups of Industries, Sapphire Textiles, Shell Pakistan, Mari Gas, Pakistan Cables, Rafhan Maize, Al-Ghazi Tractors and Atlas Honda, International Industries, Millat Tractors, Picic, and several others.
FORWARD COUNTER: Barring the Pakistan Petroleum, which failed to sustain the mid-week gains and fell modestly, other leading shares notably the PSO, the PTCL, the F.F.Bin Qasim, Hub-Power, the OGDC and some others finished steady amid active trading.
