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| February 13, 2006 | Monday | Muharram 14, 1427 |
Index crosses 11,000 crucial barrier
THE stocks during the last week continued their upward drive as punters and brokers were not inclined to miss the rising market and rode the bandwagon on the perception that there wasn’t any possibility of an immediate market retreat. The KSE index cross the barrier of 11,000 points on Feb 10. Higher dividend and bonus shares did not allow both, the bargain hunters and the speculators to sit on the sidelines.
What seemed to have reinforced the investors’ optimism were the reports of the strong presence of foreign buying on the selected counters. The leading shares followed the trend of bank, oil and cement sectors.
The weekend profit-selling on some counters helped in clipping the initial gains on some counters. However, the on-balance closing of the majority of blue chips and the overvalued shares stayed on the higher side.
The KSE 100-share index breached through two consecutive psychological barriers followed by massive buying in bank, oil and cement shares, thus signalling the advent of foreign-fund buying.
The buying euphoria was reminiscent of the boom conditions but unlike the previous run-up, the current price flare-up is aided by higher corporate dividends and capital gains.
Higher daily volumes and price flare-up reflected the presence of strong foreign-fund buying on selected counters and none could precisely predict whether it was genuine and long-term or would fade out after unloading of the long position at the inflated levels.
The KSE 100-share index breached through the barriers of 10,800 and 10,900 points during the holiday-shortened week and demonstrated that the next chart points of 11,000 points may now be not that elusive.
Leading oil shares including the Oil and Gas Development Corporation, the Pakistan Petroleum, the Pakistan Oilfields, the National Bank of Pakistan and the Muslim Commercial Bank and the D.G. Khan Cement were leading gainers behind the index’s meteoric rise over the week.
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However, the SECP further said that the issue might be taken up in the month of May keeping in view the market demand for more funds in the backdrop of price stability sans the speculative activity.
Analysts were of the view that the bulls may show their inclination to take a breather after pushing the index above their near-term target of 11,000 points with the expectations to even go beyond it during the next couple of weeks.
There was a loud whispering about the presence of strong foreign buying on the selected counters, notably in oil and some leading banks they said adding, that the current price flare-up reflected signs of its presence all around.
Fresh heavy buying in the OGDC, the Pakistan Petroleum may be in part due to the higher interims but some local brokers did not rule out the possibility of their presence as they hold the capacity and the funds to corner the high-profile issues.
Some of the leading cement shares including the D.G. Khan Cement and a few of banks, such as the MCB and the Bank of Punjab may have already touched their saturation points with no more potential to rise further. Most of the brokers believed that these have passed through the needed correction.
But on the other hand, oil shares, notably the OGDC, the PTCL, the Pakistan Petroleum still carry the potential to rise further on the strength of fresh oil and gas finds and their accelerated exploratory operations, they added.
Analysts predicted some positive announcements as an outcome of the Board meeting of the Pakistan State Oil (PSO) which was due shortly. The Kot Addu Power, the Packages and the Union Bank board meetings were also due during the week.
Plus signs again dominated the list under the lead of the Clariant Pakistan, the Siemens Pakistan, the Abbott Lab, the National Bank, the MCB, Sanofi-Aventis, the Treet Corporation and many others.
Losers were led by the Unilever Pakistan, the Nestle Pakistan, the Mustehkam Cement, Singer Pakistan, Bata Pakistan, Zulfiquar Industries and several others but losses were modest thanks to the support at the dips.
FORWARD COUNTER: Speculative issues on the forward counter followed the lead of the ready section where prices of the National Bank, the MCB, the OGDC, the Pakistan Petroleum, the Pakistan Oilfields and the D.G.Khan and the Lucky cements and some others finished their career-best levels amid active trading.—Mohammad Aslam
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