18 October 2004	Monday	03 Ramazan 1425

The Karachi stock market last week maintained the winning streak as investors continued to build their long positions on selected counters aided by the predictions of higher earnings and interim dividend.

Heavy buying in energy and bank shares at the highly inflated levels reflects that the saturation points still is far away. The money flowing back from the real estate into the share business could take the market to any highs in the weeks after Ramazan.

The market, therefore, maintained its upward drive for the fourth week in a row, breaching three psychological barriers in between and sending signals that the market's onward drive will continue in the days to come.

The weekend selling did clip some points of the index but the overall sentiment remained inclined on the upper side due to strong buying at the falling prices.

The ban by the central bank on property loans has defused the bull-run. The unprecedented speculation in the real estate and the massive amounts invested in it are again finding way into the share business. The boost is tremendous and could be sustained in the weeks to come on the renewed wave of buying spree by market leaders, notably the OGDC, the PPL, the PTCL and some others.

High daily volumes and price flare-up on certain counters reflect that the KSE 100-share index is heading to attain its pre-reaction level of 5,620 points in next couple of weeks. The talk of 6,000 index level during Ramazan appears to be too high, at least for now.

However, the index breached through another barrier of 5,300 and stood firm despite the market was in an overbought position. Both, the market capital and the index level at Rs1,542 billion and 5,433.48 indicate that buyers are in the arena and mean business. Both showed sharp rise of Rs25 billion and 90.54 points, respectively.

However, the market witnessed a major shift in the investor buying strategy in new portfolios. The notable feature was that some untraditional inactive assumed the role of the most active scrip under the lead of Nishat Mills and Fauji Fertilizer Bin Qasim and some others on reports of higher earnings.

Stocks, therefore, rose further up across the board as investors were not inclined to look back as they were encouraged by the strength of energy sector in the backdrop of a record rise in world oil prices.

Other contributory aiding factors were reports of orderly phasing out of the massive carryover volume, and the allaying reversal fears of current run-up under the weight of fresh float, brokers said.

The KSE 100-share index, therefore, maintained its upward drive to next chart point of 5,500 and analysts predicted that it could hit the point this week after minor technical correction as the market was in an overbought position.

The market advance was again led by fresh heavy buying in energy shares under the lead of refineries and marketing companies on the perception of inventory gains owing to steep increase in world prices, brokers said.

Analysts said that there was strong evidence of spill-over demand from the real estate business followed by the recent ban on credit to speculators. Banks had been directed to extend loan only for residential purposes. "The property prices, which had soared to new highs during the last two months owing to cheap credit lines to speculators are now coming down", they said and a "good part of it is being re-ploughed in the share business".

There may be some other contributory positive factors sustaining the current upturn and about 200 points rise in the index. But, largely the share market owes its strength to huge funds trickling back towards it, they said.

Reports from the corporate sector are also encouraging and did not allow investors to indulge in undue selling as an attractive bait of capital appreciation kept them in the arena.

Plus signs again dominated the list, major gainers being the Millat Tractors, Lakson Tobacco, Unilever Pakistan, National Refinery and the AKD Securities, which posted fresh gains. Other notable gainers included the Aventis, National Foods, Shezan International, Colgate Pakistan, Ferozsons Lab, Pakistan Refinery and several others.

Losers were led by the Bata Pakistan, Sapphire Fibre, Pakistan Engineering, Al-Ghazi Tractors, Siemens Pakistan, Packages, the EFU Life, Pakistan Cables, Glaxo-SKF, Siemens Pakistan, Packages, and Bata Pakistan.

FORWARD COUNTER: Speculative issues on the forward counter also showed price flare-up under the lead of the OGDC, the PPL and the D.G. Khan Cement, the PTCL and some others but the ICI Pakistan and some others were exception, which suffered modest fall on late profit-selling.