|
|
|
| October 10, 2005 | Monday | Ramzan 5, 1426 |
Stocks creep back above 8,500 level, up 3.5 per cent
SHARE values on the Karachi stock market are steadily inching towards their pre-March level and analysts predict the developing scenario - both on corporate and political fronts - is sustaining each rise, genuine and speculative on selected counters.
The last week saw many previous records broken both in terms of flare-ups and index levels, including the consecutive breach of four barriers and the rally appear to be reminiscent of the early year boom conditions after the KSE 100-share index soared to record 10,300 points.
Some other analysts say the run-up appears speculative as it is not backed by any objective background news and warn investors to play safe and not to be deceived by an attractive bait of overnight capital gains.
However, the KSE 100-share index last week broke successive psychological barriers and virtually raced towards its next target of 9,000 points as leading bulls and some financial investors significantly enlarged their commitments on blue chip counters and in leading base shares.
Analysts say the steep rise in index is not that important as it is not linked to flare-up in broader market. It is confined to half a dozen favourites who carry 60 per cent weightage, says another, adding that push the OGDC, the PSO, the PTCL and the Pakistan Petroleum by a couple of rupees and it will show a rise of 100 points.
Speculative tricks work in netting small investors amid rumours of continued robust rally in the sessions to come and many are trapped in between who seldom get out of the net without paying a price.
Over the week, the index has risen well over by 300 points despite the fact that there is no basic change in the market fundamentals. Moreover, most leading shares have virtually reached the saturation points and could not go beyond until they pass through a technical correction.
Bulls are eyeing the index level of 9,000 points before calling a day which may be followed by an avalanche of sell-stops on all counters by wiping out this month’s advantage in a go.
Click to view the larger image
The stocks, therefore, remain in a bullish frame of mind as leading bulls did not loosen their grip on price line despite many abortive efforts made by the bears to break the squeeze.
The market has again crept into the vicious circle but none could precisely predict about the logical end, as fresh collapse is reminiscent of the last March’s plunge or a continued bull-run, analysts say.
The KSE 100-share index confidently breached the barrier of 8,500 by standing well above at 8,542.38 points up by 316 points or about 3.5 per cent. Leading base shares which hold about 50 per cent weightage remain under the squeeze. The OGDC, the PTCL, the Pakistan Petroleum hold about 40 per cent weightage in it.
It has risen by over 300 points or 3.5 per cent during the last three sessions without any positive background change on the corporate front.
The market capital also soared by Rs84 billion at Rs2,445 billion as heavily-capitalized shares rose sharply higher amid early week price flare-up.
The price flare-up could be deceptive as it revolves around half a dozen highly liquid shares, says a leading broker adding I fear a trap to net in small investor on the pattern of March run-up and the consequent plunge.
The market appears to have been passed into the hands of big one and small investors need to be a bit cautious before riding the bandwagon, they add.
The straight fight between the bulls and the bears generally leave behind a long list of casualties and the current rise in an overbought market points to this developing phenomenon, says a leading analyst.
Oil shares are led by the OGDC news from the exploration front, the Pakistan Petroleum on imminent board meeting, and the PTCL followed by reports that Etisalat team was coming soon to sort out the pending issues before the takeover and final payment.
The general perception that bulls on rampage are now not inclined to look back at least for near-term and may take a breather after having hit their near-term goal of 9,000 points, brokers say.
The Lakson Tobacco and the Wyeth Pakistan which rose by Rs10 to 25 are leading among major gainers followed by the Pakistan Refinery, the Attock Refinery, the Pakistan Oilfields, Dawood Hercules, the PSO, the Shell Pakistan, the National Foods, the Artistic Denim and the Pakistan Petroleum.
Losers are led by Javed Omer and the Unilever Pakistan off Rs4.40 to 9.90. Other notable losers included the Ferozsons Lab, the Glaxo-SKF, the Shezan International, Ghani Glass, Mehmood Textiles, Blessed Textiles, Bhanero Textiles, Nestle Pakistan, and Shezan International, Javed Omer, Rafhan Bestfoods, the Atlas Honda, the AKD Securities, Aventis and some others.
FORWARD COUNTER: Speculative issues led by the D.G. Khan Cement, the MCB, the National Bank set new carrier-best levels and are still rising on the reports of higher dividend or bonus shares. Others including the Pakistan Petroleum, the OGDC, the PTCL, the Bank of Punjab and some others also rose but finished below their week’s best levels on late selling.
—Muhammad Aslam
|
|
|
|
