The stocks, at the fag end of last week, received massive battering as leading bears indulged in heavy selling at inflated levels, notably in the PTCL and the OGDC. However, bulls were not inclined to entertain bearish ideas and predicted a great fight back next week.
Bears already have gotten the best after a sustained run-up in an overbought market alone on technical grounds. However, upcoming positive corporate announcements from the banking and the fertiliser sectors would drive them out, possibly by next week amid strong short covering.
However, heavy weekend selling clipped the extreme gains on all counters but most shares managed to finish with an extended gain as investors and speculative forces were not inclined to ease their grip on the current price line.
However, a long overdue technical correction in a highly overbought market reversed the trend after clipping well over 150 points from the KSE 100-share index, which at one stage crossed the barrier of 7,000 points to close at 6,998.35. Finally, it finished with a fresh gain of 52 points at around 6,7,999.
The IPO of Attock Petroleum, which opened for two days on January 28, also drained out heavy funds from the market which intensified the sell-off in most of the favourites.
Earlier, massive foreign buying in the PTCL aided in part by the reports of higher earnings broke all previous records made in any individual share and analysts predicted it could rise above the Rs70 mark during the next couple of sessions until the bulk of floating was cornered.
The upward thrust was further intensified after another heavy weight joined the race and rose sharply up followed by the textile sector and leading bank shares. Investors seemed to be in a mood to grab as much as it's floating stock, but not without paying higher price before the last date to submit the Expression of Interest (EOI), leading to its eventual sell-off before June this year.
The KSE 100-share index hovered around its new target of 7,000 points but a stiff resistance from bears turned it into a technical stand off. However, it managed to close sharply high by well over 52 points at 6,798.01 points.
The IPO of Attock Petroleum, which opened for public subscription on January 28 for two days, was well-received according to initial reports. Its 10-rupee share was offered at Rs57.75 (10 million shares) including the premium of Rs47.75. In kerb it was being quoted well over Rs100.
The market, however, did not face any liquidity problem, although a good amount flowed out from the market into it as investors unloaded their long positions in some of the overvalued shares to invest there.
More than twice the index closed after crossing the second barrier of 7,000 points after having breached through the 6,900 barrier in a session and rose to 6,956 points. Other than that late selling at inflated levels pushed it down to finish well below the day's peak level.
"The index level of 7,000 points does not appear that ambitious". The advent of foreign buying in top index shares, the PTCL and the OGDC has altogether changed the future market outlook", analysts said.
"It appeared pretty difficult to rope in the bulls at this stage", some others said "they were targeting the two index heavy weights, the PTCL and the OGDC, having a weightage of 40 per cent".
The attractive bait of sell-off of the PTCL and some other state-owned mega units was there but the current buying euphoria in part was also attributed to the upgrading of Pakistan's sovereign foreign currency rating by the Moody's after the successful launch of Islamic bond of $500 million and its massive over subscription, they said.
An idea of the scramble to corner the floating stock of the PTCL well before its privatization earlier than this June may well be had from the fact that only its share value was appreciating in each session but also the volume. It was close to its Rs70 mark at the close.
An interesting feature was that despite conflicting news from Balochistan, investors generally followed the market dictates rather than having an overview of its possible fallout on stock trading.
On corporate front, an interim dividend of 80 per cent by the Shell Pakistan seemed to have fallen below the market expectation as was reflected by a sharp decline in its share value in the post-dividend trading.
Dividend news from some leading companies, notably interim bonus shares at the rate of 110 per cent by the International Industries; 50 per cent interim bonus by Nishat Chunian; 20 per cent cash by 20 Lakson Tobacco, 366 per cent by Gharibwal Cement; 75 per cent final by Clariant Pakistan, and 85 per cent cash by the Packages were on higher side of the market expectations by aiding the sentiment.
Final dividend at the rate of 30 per cent plus bonus shares of 20 per cent, final 55 per cent cash by the Aventis and 15 per cent by the Tri-Pack Films were well-received in the market despite a massive sell-off at the weekend session.
Plus signs dominated the list with most of the leading shares, notably textiles, banking and some other counters hit their career-best levels. The auto shares remained under pressure on reports of fresh cut of 25 per cent in import of duty of cars.
FORWARD COUNTER: After earlier hitting new highs, the speculative issues failed to sustain the initial gains and fell on heavy weekend selling. The OGDC, the PPL, the Fauji Fertiliser Bin Qasim, the PSO, and many others ended sharply lower. The PTCL, however, was an exception which managed to finish with good gains despite heavy unloading at the fag-end of the week.
