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| May 16, 2005 | Monday | Rabi-us-Sani 7, 1426 |
Privatization news gives shares cause to celebrate
THE bidding date announcement for the sale of controlling shares of the PTCL on June 10 has reinforced the investor-perception of a major boost to stock trading during in coming days which was reflected by the strong weekend rebound. Together with the National Budget — as was widely speculated of carrying incentives such as a cut in corporate taxes and more relief — the PTCL bidding date may give a push to both the existing price flare-up and the expanding volume.
Late last week a massive selling in leading oil shares triggered by the reports of three per cent decline in the world oil prices intercepted the sustained run-up which analysts predicted could have pushed the index to the near-term target of 8,000 points. It was satisfying to note that only extreme gains were clipped at the inflated levels and there were buyers at the dips, indicating that the current recovery drive would be maintained in the weeks to come.
After hitting the week’s best level at 7,563.12 points on May 12, the KSE 100-share index finally managed to finish with fresh sharp increase, although the level could not be sustained. It finally ended around 7,411.33 points as compared to the previous week’s 7,183.25 points up by 228.08 or three per cent. So was the market capital at Rs2,073 billion up by Rs52 billion as the heavily-capitalized shares came in for serious buying at the end of the week.
“Why was the market terribly choppy and lacked direction”, many investors asked. “There was no precise answer but some analysts said that until the buying and selling interest remained confined to a dozen actives, notably oil giants there could hardly be a stable trend”.
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Despite the mid-week selling, stocks on balance maintained their upward drive as investors continued to build-up long positions on selected counters under the lead of oil shares aided by positive news about an imminent sell-off of the PTCL to one of the eight short-listed bidders.
The PTCL and the leading index shares in oil sector, which were in the forefront of the market crash a couple of weeks earlier were the inspiring force behind the grand rebound and indications were there that the current run-up could be sustained on both technical grounds and positive news about the fresh forward rules.
The breach of two consecutive barriers in a session in mid-week price flare-up was reminiscent of the February run-ups when five to seven upward barriers were broken in each session to soar to an all-time peak level of 10,303 points. All roads led to the PTCL as none was inclined to miss the bandwagon as the current level was billed as the most “attractive for any future safe and gainful investment”, brokers said.
Identical reports about its sell-off some two months back had also pushed its share value to a record high of Rs90 plus, followed by the market talk that its benchmark price may be fixed $2 per share of Rs23, including a premium of Rs13.
It was traded sharply higher at 70.90, being the week’s peak level and reflected further price appreciation in the sessions to come on a massive activity of 114 million shares.
“News about the privatisation of the PTCL before the end of June seems to have had lured the massively battered general investor back into the arena to realise quick daily gains” analysts said”. The perception behind their re-entry was to recoup in part previous losses”.
The leading energy shares also came in for strong speculative support and rose sharply higher amid active trading, so did most of the blue chips on other counters under the lead of Atlas Honda and Bhanero Textiles.
Other prominent gainers included the Suzuki Motors, the Millat Tractors, the Mari Gas, the Attock Petroleum, the Pakistan Refinery, the PPL and the PSO despite late pruning.
Losers were led by the Colgate Pakistan and the Valika Art Fabrics, followed by the Artistic Denim, the Shell Pakistan, HinoPak Motors, the Clover Pakistan, the BOC Pakistan and many others.
FORWARD COUNTER: Buoyancy was more pronounced on the forward counter where all favourites finished with smart gains, major gainers being the Sui Northern Gas, the OGDC, the PTCL, the PPL, the Pakistan Oilfields and the PSO, up by Rs2 to 14.
Some others were also traded higher under the lead of fertilizer and textile shares, but both the gains and the volume were light.—Muhammad Aslam
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