KSE share index rushing towards 10,000-point level
By Muhammad Aslam
THE KSE 100-share index took a brief technical breather at the fag-end of last week. Leading punters and speculative investors adjusted their portfolio to be an active part of bulls that would launch a fresh forward thrust to the coveted level of 10,000 points.
Some foreign investors who were making purchases on selected energy shares and the PTCL were expected to be buoyed by the comment on the performance of the KSE which had topped among most emerging markets.
Market capital of $40 billion and the P/E of about 17 per cent had provided enough bait to take a plunge in the Pakistani share market keeping in view its performance during the last couple of months, said a commentator during a global seminar. There could be a new era not in a distant future in the KSE trading history, he added.
The KSE 100-share index virtually raced towards its next chart point of 10,000 points and despite modest disruption it managed to finish with a hefty gains of 810 points at 9,603.73 and added Rs200 billion to the market capital at Rs2,644 billion, a new record for a single week.
“It was a judicious blend of both local and foreign buying in the energy, cement and other blue chips amid reports of higher corporate earnings and handsome dividend and bonus shares”, said analysts.
The credit of sustaining the continued run-up goes to the PPL, the OGDC and the PSO which had set new records both in terms of single-session gains and volume figures. They took the entire market along with them where they wanted.
Visit by the European and Middle East Chief of the Merrill Lynch was another morale booster for investors as leading punters thought that it could well be a prelude of an entry of the largest asset management fund in local bourse any time.
The bait of the PTCL, the PSO, the United Bank and some other mega state-owned units also played a role, notably in the PTCL which rose from Rs60 to Rs90.
There was a loud whispering in the market that its selling price for the prospective buyer may be fixed around $2 and $2.2 and that perception appeared to be the force behind its current sustained run-up. Some analysts predicted that its fair value could be around Rs120 per share of Rs10 before its partial sell-off.
Analysts said the weekend slowdown was based on some technical factors as leading bulls were not inclined to go for a “big kill”, just in one go but were sure to push it above this level after consolidating their positions.
Reports of heavy foreign buying in the PTCL ahead of its privatization continued to evoke strong sympathetic support in oil shares, notably the OGDC, the PPL, the PSO and some others.
The OGDC, the PTCL and the PSO all had a weightage of 48 per cent in the index and with the addition of the PPL about seven per cent to the total. The weightage of trio will rise to 55 per cent and could guide its direction under their own perceptions, brokers said.
That was perhaps why the broader market was terribly weak for more than a week but heavy buying in the trio continued to push the index to new highs in each session. It had created doubts in the minds of many investors “whether or not the price flare-up was genuine”, they said.
An attractive bait of the sell-off of some mega units was still there, said an analyst while commenting on the market’s meteoric rise from the index level of 6,000 to 9,500 points, and added that till June when major sell-offs would be completed, the future direction of market would be guided by local factors.
Some leading analysts predicted that the market had risen without the support of broader market and needed a technical correction as it appeared difficult to pull it down. The possibility of clipping few hundred points here and there could not be ruled out.
Most corporate announcements with some exceptions, including the banks and energy shares have already played their role. Now, the cement sector had assumed the role of a trendsetter under the lead of the D.G. Khan and the Fauji Cement.
Minus signs again dominated the list under the lead of Artistic Denim, Pakistan Oilfields, the PPL, Aventis, the PNSC, Noon Sugar, Glaxo-SKF, Securities, Central Insurance, Indus Motors, Berger Paints, Shell Pakistan, Grays of Cambrdige, Clariant Pakistan, Packages, Lakson, Siemens Pakistan and the AKD Securities.
Advancing shares were led by the Attock Refinery, the Pakistan Refinery, the Mari Gas, the Blessed Textiles, the D.G.Khan Cement, the Pakistan Engineering, the International Industries and the Noon Pakistan which posted gains and the Attock Refinery and the National Refinery being top gainers.
Despite late selling at higher levels, the PSO, the National Refinery, the Pakistan Refinery, Javed Omer and many others managed to finish with good gains – the PPL and the OGDC being the biggest gainers.
FORWARD COUNTER: The PPL rose to new career-best level at Rs360.60 followed by big daily price flare-up and massive volumes in two-way trade. The OGDC, the PTCL, the Fauji Fertiliser Bin Qasim, the PSO, the Pakistan Oilfields followed them by finishing with smart on-balance gains despite late weekend selling.
The ICI Pakistan and some low-priced issues including the Telecard, the Dewan Salman and some others were also traded higher amid active trading.
