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| October 02, 2006 | Monday | Ramazan 8, 1427 |
Stocks pass through a buoyant week
THE share market displayed a terribly buoyant mood last week as investors continued building up long positions on counters where reportedly foreign buying had made a firm debut.
There was a loud whispering in the market that some foreign funds were eyeing the smaller listed banks as an outright buyout or in joint venture arrangements. Having a modest capital base, some smaller banks had assumed the role of active scrips by rising smartly in each session amid acquisition rumours.
Leading stocks therefore remained in a bullish mood throughout the week on active short-covering as a flurry of positive news pouring in quick succession did not allow investors to take even a technical breather.
The KSE 100-share index staged a fresh smart rebound at 10,512.40 points, up by 205.65 points as compared to the previous week’s 10,306.75. The KSE 30-share index also rose to 13,077.17, up by 220.91 points as compared to the previous week’s 12,856.26 points.
During last 10 sessions, the index had gained about 700 points and some analysts feared a shakeout any day despite higher dividend and bonus shares announcements by some second-liners.
How phasing out of the CFS limit of Rs55 billion in four stages by November 30, boosts stock trading would be seen in the next couple of weeks, while how the investors operate will be a crucial question being asked by all the analysts.
The news of strong foreign buying in some smaller banks either to acquire their controlling shares or a direct buyout overshadowed the coup rumours putting the market back on rails.
But the market received a major boost after official announcement of a massive increase of 53 and 21 per cent in oil and gas reserves in Tal block, shared jointly by the OGDC, the Pakistan Petroleum and the Pakistan Oilfields.
On top of them were higher cash dividend and bonus shares by some leading as well as medium-sized companies. The majority stayed well above predictions and generated a good bit of covering purchases at their respective counters.
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Trading at the stock market resumed on a higher note but coup rumours interrupted the early run-up on selling triggered by conflicting rumours linked to last Sunday’s countrywide power breakdown.
But floor brokers attributed an early sluggishness to the advent of Ramazan as investors generally play safe with some reinforcing their religious obligations.
They said that a temporary halt in the weekend rally was caused by coup-rumours which inspired selling and kept investors at their toes all the time, however averting a larger fall.
The negative fallout of last Sunday’s country-wide power breakdown linked to a number of rumours still left its psychological impact on the investor-mind and leading among them thought twice to go beyond certain specified buying limits, stock analyst said.
The KSE 100-share index was expected to fluctuate between 10,600 points on the higher side and 9,800 on lower during the holy month, Faisal Abbas a leading stock analyst predicted.
The volume figures progressively expanded further but the moving range of index reflected that all was well, according to the prediction of analysts sans some massive negative development.
Bank, oil and some other selected shares were still in a buying range as most of them ensured attractive capital gains and could attract strong selective buying by the big ones, including the financial institutions, stock analyst Ahsan Mehanti hoped.
However, he did not rule out the possibility of strong selective dividend-related rallies in between as higher payout were still to come from some leading companies, he added.
The first of Ramazan witnessed a steep fall in trading volume as a big chunk of speculative buying was conspicuous by its absence, while some other psychological factors kept investors in two minds throughout the session.
The Arif Habib Securities, the Wyeth Pakistan, the Rafhan Maize, the Thal Industries, the Pakistan Oilfield, the Pakistan Petroleum, the Union Bank, and the Artistic Denim were leading among gainers, followed by the Shaheen Insurance, the Pak Resource Insurance, the Attock Refinery, the Atlas Honda, the Pak-Suzuki Motors, and Dawood Hercules which posted gains ranging from Rs3 to 6.30.
Losers were led by the AKD Securities and the Millat Tractors. Other prominent losers included the Faisal Spinning, the Gadoon Textiles, the PSO, the Shell Pakistan, the Pakistan Oilfields, the Pakistan Petroleum, the Bolan Casting, the Pakistan Engineering, and the HinoPak.
FORWARD COUNTER: Speculative shares on the cleared list also followed the lead of their counterparts in ready section and rose in unison under the lead of the MCB, National Bank, the OGDC, Pakistan Petroleum, Pakistan Oilfields, the D.G. Khan Cement and some others.—Muhammad Aslam
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