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| January 22, 2007 | Monday | Muharram 02, 1428 |
Stocks bullish on hopes of better corporate results
STOCKS remained in a bullish frame of mind despite a good bit of profit-selling at higher levels, the New Year forward drive was well sustained for the third week in a row on active follow-up support.
The weakness of oil sector at the fag-end of the week did affect the underlying sentiment after world oil prices fell below $50 mark for a brief period, the broader market performed well and did not allow blue chips to fall below their currently established higher levels.
The KSE 100-share index is rising steadily to hit its near-term target of 11,000 points possibly during the current month and indications are that sailing may remain smooth after that too.
For the third consecutive week it rose well over 200 points each week and last week's tally could be more impressive despite the fact some of the leading base shares, notably OGDC, National Bank and Pakistan Petroleum came in for active selling.
It ended the last week at 10,641.31 as compared to 10,425.46 a week earlier, up 215.85 points adding Rs57.00 billion to the market capital at Rs2,917.403 billion. The KSE 30-share index also rose to close at a new high of 13,392.77.
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But what seems to have taken the entire market along to a safe level was buying euphoria in PSO linked with its privatisation possibly in March, he said.
The notable feature was that buying in PSO appeared to be a judicious blend of both local and foreign buying aided by strong bargain-hunting at the current higher level, brokers said.
Despite mid-week profit-selling in some of leading base shares, stocks last week extended the previous gains on active institutional support amid market talk of encouraging corporate announcements during the next couple of sessions.
“The tempo of mini bull-run is progressively building up ahead of the advent of corporate results season," analysts said “leading banks could set the ball rolling during the next couple of weeks."
Below market expectations, the final dividend of 45 per cent by Dawood Hercules, which makes the total to 80 per cent as the company had already paid an interim dividend of 35 per cent triggered fresh selling in its shares, off Rs7.80. Last year it came out with a cash of 85 per cent plus bonus shares at the rate of 15 per cent.
Sharp increase in the volume figure to well over 200m shares indicates that big players are very much in the trading arena and are inclined to restore lost glory to the share business in the sessions ahead, analysts said.
Although the KSE 100-share index finished well below its week's peak level it ended with a fresh sharp rise as compared to a week earlier. The KSE 30-share index also posted a fresh gain.
The fresh rise despite selling in OGDC, PTCL and National Bank shows that the market is in a perfect bullish mood and out to explore new highs.
“It should have ended around the peak levels but increase in CFS lending beyond the ceiling triggered selling on some of the overvalued counters owing to risks involved, brokers said.
All leading base shares, notably MCB, and some oil giants including Pakistan Petroleum, PSO on reports of its sell-off during the next couple of weeks and OGDC followed by market talk of oversubscription of its new issue at the rate of Rs110 per share were leading among the trend-setters.
"The market witnessed aggressive alternate bouts of buying and selling allowing it to consolidate well above the lower levels," brokers said. They further said, "the proceedings reflected a genuine activity based on long-term New Year strategy."
Leading gainers were led by Rafhan Maize and Rafhan Bestfoods, up followed by PSO, EFU Life, Jahangir Siddiqui Capital, Clariant Pakistan, Gillette Pakistan, Nestle Pakistan, Siemens Pakistan and Lakson Tobacco.
Prominent losers included Dawood Hercules and Unilever Pakistan. Others to follow were National Bank, United Sugar, Javedan Cement, Clover Pakistan, Zulfiqar Industries and Jahangir Siddiqui & Co.
FORWARD COUNTER: Owing to selling in National Bank and OGDC at the fag-end of the last week, speculative issues on this counter turned mixed but the underlying sentiment remained uppish.
But on the other hand, Pakistan Petroleum, MCB and some others finished with an extended gain on active follow-up support linked to higher earnings.—Muhammad Aslam
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