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| October 16, 2006 | Monday | Ramazan 22, 1427 |
KSE passes through a volatile week
LAST week proved highly volatile for the Karachi share market with investors playing on both sides of the fence under the cross-current of negative and positive news. The close, however, was in line with a bull market.
Although the traded volumes fell to terribly low daily figures but at no stage did the blue chip sector show signs of an overdone current run-up. Each fall followed a massive rebound, signalling that nothing was wrong with the underlying sentiment.
After having breaking the psychological barrier of 11,000 points twice during the last week, the KSE 100-share index failed to sustain it in the absence of a follow-up support. But it confidently stayed well above the base of 10,000 points despite occasional bear onslaughts.
It turned shy after crossing the Rubicon despite the fact there was more than one positive news, Ashraf Zakria a leading stock analyst said, adding that some big ones were behind the game for reasons known only to them.
The KSE 100-share index finally finished with a fractional fall of 1.36 points at 10,924.55 after several weekly rise and fall and so did the KSE 30-share index at 13,441.32 owing to selling in the favourites.
A buying euphoria generated by the MCB’s GDR of $150m - whose GDR-related price is fixed at Rs264 per share - and reports of bank acquisitions seem to have lost relevance for market punters at least for near-term and some opted unloading in bank shares. But they covered positions in oil sector on reports of privatisation of the PSO, and higher oil and gas reserves.
Both, bank and oil shares being current market leaders were marked down on profit-selling at highly inflated levels - former on the MCB’s GDR-related selling and latter on the reports of a cut in petroleum prices. The PSO, the Shell Pakistan, the Pakistan Petroleum were leading losers among them.
The index, more than once, briefly crossed the barrier and was quoted well above the 11,000 points level but the mid-week selling in bank and oil shares pushed it down to close below this level.
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The Asian stock and currency markets reacted bearishly to North Korea’s nuclear test on fears of sanctions or military action under the UN resolution but the local stocks ignored it, he added.
The opening was on the higher side, what dealers call, an extension of the weekend run-up but mid-session witnessed a good bit of profit-taking in banks and other high-profile shares, limiting the market’s sustained run-up.
The fall in banking spreads, which could lead to a considerable shrinkage in profits based on deposit-advance ratio was one of the factors behind the selling in bank shares, Faisal Abbas a leading stock analyst said. A fall in the MCB and the National Bank evoked a lot of sympathetic selling on other blue chip counters.
But some others said that it was a technical correction long-overdue as the market was in an overbought position owing to sustained rise during the last couple of weeks.
There was perceptible change in investor-portfolio building as most of them were taking massive stakes in oil after having made partial unloading in bank shares, another leading stock analyst Zia Javaid said.
He said that the buying euphoria in banking sector was progressively fading out in the absence of fresh news about the foreign interest in any one of its weaker links and the consequent quiet triggered selling by day traders and jobbers.
However, the question that whether or not the current run-up had met its course was being debated among the analysts. Opinions were divided on the perception that the developing situation on external front should be taken into consideration to reach a logical conclusion about the market’s future direction.
As far as the corporate background news were concerned, they were encouraging and could keep the market in a positive shape in the weeks to come, some others said.
The Artistic Denim and Arif Habib Securities led the list of leading gainers, followed by the Sui Northern Gas, the KSB Pumps, the Mari Gas, the Pakistan Oilfields, the Pak-Suzuki Motors, the Clover Pakistan, the National Refinery, the Jahangir Siddiqui & Co, the Pakistan Petroleum and the Millat Tractors.
Promiment losers were led by the Grays of Cambridge and the Unilever Pakistan. Other notable losers included the National Bank, the MCB, the Central Insurance, the IGI Insurance, the Nishat Mills, the Pakistan Refinery, the Pakistan Cables, the Glaxo-SKF, and the Engro Chemical.
FORWARD COUNTER: Mixed trend was seen on this counter amid active bouts of buying and selling. While leading bank shares, notably the National Bank and the MCB fell, the Bank Alfalah and the Faysal Bank rose. The Pakistan Petroleum, the Pakistan Oilfields and the OGDC also maintained firm outlook and so did some other blue chips on other counters.—Muhammad Aslam
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