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| April 24, 2006 | Monday | Rabi-ul-Awwal 25, 1427 |
Index sustains 12,000-point level
Despite a massive bear onslaught at the fag-end of previous week, the KSE 100-share index managed to sustain its newly attained level of 12,000 points as some leading base shares on-balance finished higher.
If it managed to stay at this level during three or four sessions in the next week, it could well prove a benchmark for an onward journey beyond that, predicted a leading analyst.
The market being in an overbought position has already met its technical demand and the trading during next week could bring about many pleasant surprises even to leading punter. Foreign and institutional traders who indulged in profit-selling in oil and bank shares could be the leading buyers at lower levels.
After a fairly promising opening aided by selective foreign fund buying, the stocks turned into a volatile performance as investors played on both sides of the fence, indulging in alternate bouts of buying and selling.
Analysts said that it was the weakness of the leading oil shares, including the Shell Pakistan, the PSO, the OGDC, and the Pakistan Petroleum, which evoked sympathetic selling on other counters. Even higher bonus shares at the rate of 50 per cent by the Pakistan Oilfields, and Rs2.25 per share dividend by the OGDC failed to restore sanity to stock trading.
Bank shares led by the MCB, the National Bank and some important ones on other counters performed well but failed in generating fresh buying on light volumes and falling buying interest.
However, the current sluggishness appeared to be psychological rather than genuine as some important board meetings are due before the month was out and they could lure investors back into the market. The Lakson Tobacco and Rafhan Miaze have already come out with interim payouts of 20 per cent bonus and 200 per cent cash, respectively, while others would follow the suit.
The next week could be dividend-driven where bargain-hunters and financial investors may be the leading players and in turn push the index to a new high.
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Earlier, heavy foreign buying in leading oil and bank shares featured the stock market but analysts feared that the duty-free import of cement could have negative impact on the entire market in the coming sessions.
The KSE 100-share index posted a fall of 131.23 points at 12,007.60 as compared to previous 12,136.83 as leading base shares fell further under the lead of the OGDC, the Pakistan Oilfield, the Pakistan Petroleum, the National Bank and the MCB. Massive buying in the OGDC on new oil finds actively participated by other heavy-weights, notably the Pakistan Petroleum, the Pakistan Oilfields and the National Bank fuelled the run-up as some of them closed well above the ceiling.
Essentially it was the OGDC week, being massively heavy weight, which rose by adding more than half of the points in the total rise of the index analysts said. Others followed them in the same pattern thus continuing the bull-run.
The Pakistan Petroleum followed it on its sell-off news, while the Pakistan Oilfields rose further ahead of its board meeting but reacted on selling after the announcement of 50 per cent stock dividend.
The situation is fraught with heavy financial risks at least for the near-term despite reports of higher interim corporate earnings, some others said adding that the duty-free import of cement, plus 60 per cent subsidy on freight could knock the bullish cement sector out from the list of trendsetters having negative impact on the broader market.
The Lucky Cement, the Fauji Cement, the Pakistan Cement, the Dewan Cement and some others remained under pressure on persistent selling after the news of duty-free import of cement reached the market. The move was to ease the prices which had risen sharply up despite the government warning to producers.
The oil sector could keep the index in a positive mood but it could not take along with it the entire market for a longer period and there were technical implications in similar situations, they added. The Nestle Pakistan, the Unilever Pakistan, the National Food, the Ghandhara Industries, the Lakson Tobacco and some others were leading among the gainers up while losers were led by the Treet Corporation and the Rafhan Maize followed by leading oil shares, notably the Pakistan Petroleum, the Pakistan Oilfields and the OGDC.
FORWARD COUNTER: Barring the National Bank and some others which managed to finish higher on the cleared list, all other suffered fall, major losers among them being the OGDC, the Pakistan Oilfieldsm, the Pakistan Petroleum, the D.G. Khan, the Lucky Cement, the MCB and some others—Muhammad Aslam
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