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| October 23, 2006 | Monday | Ramazan 29, 1427 |
Oil and bank shares pushing the index to new highs
THE stocks ended the week on a terribly bullish note as investors were not inclined to miss the rising market ahead of a long weekend on account of Eid holidays, and the market’s highly overbought position.
Investors may have had more than one reason behind their scramble to grab the floating stock of leading oil and banks shares but the successive upper locks in selective could have been deceptive based on speculative thinking as those were fraught with higher financial risks.
The KSE 100-share index, therefore, settled well above the crucial level of 11,000 points and analysts predicted that its next target could be well above the previous all-time high of 12,336 points established last year in March. It finished the week at 11,566.80, up 642.25 points or seven per cent as compared to a week earlier.
All positive news from the corporate sector and the acquisition talk of some smaller banks by foreign investors point towards a sustained bull-run in post-Eid holiday trade. The National Bank, the MCB and the Bank of Punjab were the leading trendsetters.
Oil giants under the lead of the OGDC, Pakistan Petroleum and Pakistan Oilfields were virtually on war path to set new career-best levels because of foreign buying and a green signal to resume the suspended drilling operations in Balochistan. They could take the market to new highs.
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Incidentally, it appeared to be a judicious blend of both foreign portfolio and local buying, confined to half a dozen leading bank and oil shares with a total weightage of about 60 per cent in the index.
The OGDC, the National Bank, the MCB, the Pakistan Oilfields and the Pakistan Petroleum were leading among them which closed around the upper limits of circuit breakers thus rising sharply up. Being heavily-capitalised, they added Rs124 to billion to the market capital at Rs3,184.188 billion.
The stocks, therefore, finished the week on a bullish note aided by heavy foreign and local buying in leading oil and bank shares at lower levels amid renewed talks of acquisition.
But what seemed to have put the market back on rails were the rumours of the OGDC’s GDR being fixed at $3, shortly before being listed on the London Stock Exchange.
The KSE 100-share index which owes its strength to the OGDC, the MCB, the National Bank, the Pakistan Oilfields was up by 4.36 per cent, while the KSE 30-share index was also quoted higher to its new career best level, reflecting the strength of bank and oil shares.
The smart rally presented a pleasant surprise to leading analysts who were predicting a dull market in sessions preceding Eid holidays. They were out to support the rally based on positive market fundamentals.
If index could sustain the level of 11,000 points or beyond prior to the holidays, the post-holiday trading will witness a massive bull-run, Ashraf Zakria a leading stock analyst predicted adding that all basic fundamentals point towards it.
Faisal A. Rajabali holds the same view on perceptions that the presence of strong foreign portfolio buying on selected counters could push the prices further up.
The market could pass through a technical correction but was pretty difficult to pull it down from the current stature which appeared to be more than viable, both on the strength of foreign buying and higher payouts, he said.
The Pakistan Oilfields and the Wyeth Pakistan were leading among the gainers, followed by the Askari Bank, the MCB, the National Bank, the United Bank, the IGI, the Pakistan Refinery, the OGDC, the Attock Petroleum and the Pakistan Petroleum. They were followed by the Clover Pakistan, the Zulfiquar Industries, the Clariant Pakistan and the Millat Tractors.
Prominent losers were led by the Gatron Industries and the Dawood Hercules. Other notable losers included the Jahangir Siddiqui & Co, the Indus Motors, the Callmate Telips, the Murree Brewery, the Husein Sugar, the Pak-Suzuki Motors, the and Gillette Pakistan.
FORWARD COUNTER: Speculative issues also followed the lead of their counterparts in ready section and rose in unison under the lead of the OGDC, Pakistan Petroleum, Pakistan Oilfields, National Bank, the MCB and some others. Price flare-up in them was sustained till the end of the week despite upcoming Eid holidays.—Muhammad Aslam
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