17 January 2005	Monday	06 Zilhaj 1425

Despite a massive mid-week sell-off, the stocks last week managed to finish with extended gains on strong buying at the dips in leading shares.

However, the week's best level could not be sustained amid fears of fresh unloading before Eid holidays.

Snap recovery just at the heels of heavy selling a day earlier, reflected that the future outlook appeared bullish, apparently on predictions of higher dividend from the textile and sugar sectors.

The strong weekend rally, however, gave a pleasant surprise to analysts as the KSE 100-share index recovered 135 points and was last quoted at 6,560, the net gain over the week of 241 points or five per cent. This indicated that the bulls were not inclined to give even a breathing space to bears, at least for near-term.

The long overdue technical correction in a highly overbought market and tight money supply, however, managed to clip only extreme gains. As far as the underlying sentiments were concerned it remained inclined upward.

On January 13, the KSE 100-share index suffered one of the largest single-session declines of 233 points but stood well above its previous week's level of 6,319 after having hit all-time high of 6,710 points at one stage.

The attack on the Sui gas facilities and disruption in supplies to some major industrial units, reports of high badla rates at around 18 per cent, the market's terribly overbought position during the last couple of weeks, and the sustained run-up were some negative factors which halted the market's upward march to the index level of 7,000 points, analysts said.

The market could shed some more points and may suffer fresh erosions in capital as investors would keep to sidelines owing to next week's holidays on account of Eid-ul-Azha.

"I don't think bulls were completely routed by a single-session pruning. They could not be easily outwitted as they had a big stake to defend", said a leading analyst adding" there could be many pleasant surprises in the sessions prior to Eid holidays".

Earlier, the mid-sessions saw the KSE 100-share index breaking through three consecutive barriers as upcountry punters were not inclined to loosen their grip on price line and continued to build long positions in leading base shares.

Never before in the history of the KSE, the index had been the target of speculative rise in a single-session, the previous all-time high record was 194.78 points established on December 1, 2003 on reports of peace initiatives with India and its positive response.

It breached through the barriers of 6,500, 6,600 and 6,700 points in a single session to finish at 6,710.03, up 225.89 points as the leading base shares, notably the PTCL, the OGDC and the PSO, having about 45 per cent weight age in the index soared to new career-best levels.

Volume figure also established a new single-session record at 1.099 billion shares after four years. The previous all-time figure was at one billion shares, out of which the PTCL and the OGDC alone accounted around 442 million shares.

The market had entered into a terribly high-risk area and was currently standing on an avalanche, which could make or mar its future outlook jolting the recently built-up investor-confidence in share business, if it was not contained by some official corrective steps, brokers feared.

In similar conditions as the prevailing one, authorities should take step to safeguard the interest of small savers and investors who could be major losers in the current fight of bulls and bears, they said.

"The current price flare-up was terribly speculative and could leave behind a long list of casualties after punters opt for profit-taking and small investors could be the worst-hit", analysts said.

"It was a straight fight between a couple of upcountry based speculators assisted by some of the locals to grab the floating stock of leading shares where chances of a major fall were almost negligible", some others said.

It appeared to be a great speculative game signalling that the market was heading towards new record, both in terms of individual turnover and index levels. "It was not that difficult to push the index to any level by picking up leading base shares", analysts said "but the important factor was that other sectors were also participating".

While the day traders had withdrawn to sidelines, institutional traders were also playing on short-term basis and were not inclined to hold long positions and feared there could be a worst scenario after the bubble bursts.

The bulk of the support remained confined to energy, textile, fertilizer, bank and low-priced shares on other counters where leading among them finished with good gains. The Wyeth Pakistan, the Lakson Tobacco, the Atlas Honda, the Treet Corporation and some others were among prominent losers.

FORWARD COUNTER: Speculative issues on forward counter also followed the lead of their counterpart in ready section to rise in unison, major gainers among them were the PPL, the OGDC, the PTCL, the PSO, the National Bank, the MCB, the Fauji Fertiliser and the Pakistan Oilfields, which recouped the mid-week losses on buying at the fag-end of the week.