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THE share market seems to have pulled itself out of the last week’s psychological pressure due to the judicial crisis as tired investors, under the lead of foreign funds, resumed normal covering operations at the prevailing lower levels.
The KSE 100-share index soared well above the 11,500 level after fluctuating either-way earlier in the week on strong buying in the leading base shares. It finally finished the week at 11,655.64 as compared to 11,271.59 a week earlier as leading base shares tended higher, up 384.05 points over the previous closing.
The total market capital swelled by Rs111 billion at Rs3,176 as compared to previous Rs3,065 as leading shares rose on active follow-up support. But the KSE 30-share index posted a larger rise of 549.88 points at 14,564.44 from the previous 14,014.56 as leading base shares rose further higher.
Leading analysts predict it is heading to regain its past glory above the all-time high figure of 12,200 points in the coming weeks on the strength of some of the positive market fundamentals. The lead was, however, provided by foreign investors, who seemed to have found the cue of things in future and were terribly bullish on selected counters. Their chief target was oil and bank shares, most of which witnessed a fresh price flare-up under the lead of Pakistan Petroleum, PSO on its sell-off news, Pakistan Oilfields, National Bank, Muslim Commercial Bank, Bank of Punjab and Bank Alfalah.
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Although it was pretty difficult to pinpoint the size of foreign portfolio buying, increasing figures of Special Convertible Rupee Account (SCRA), show large inflow of foreign money in the local share business. The other aiding factor was withdrawal of notices by the SECP against about seven brokerage houses allegedly involved in short selling which had triggered the market crash in 2005.
Stocks, therefore, posted widespread gains on active short-covering on selected counters at the lower levels aided partly by technical factors and partly to some positive developments on the probe issue of 2005 market crash.
An idea of investor scramble for the floating stocks of leading shares may well be had from the fact that some of them ended around their upper locks under the lead of MCB, National Bank of Pakistan, Petroleum and some others, which have been under pressure since being ex-dividend and ex-bonus.
Stock analyst Hasnain Asghar Ali attributed the return of the bulls to the arena to Security & Exchange Commission of Pakistan’s move to withdraw show-cause notices issued to the alleged chief players behind the market crash of 2005 wiping out $13 billion investment of small investors.
“The snap rally seems to have given a pleasant surprise to mostly leading analysts who predict a sluggish opening owing to resumption of hearing against the suspended chief justice of the Supreme Court in the judicial council”, analysts Ashraf Zakria said. Investors were not deterred by the peaceful protest of lawyers while the hearing in the presidential reference was on in the Supreme Court.
But the market has demonstrated in more than one ways its chief worries relate to SECP regulatory steps rather than external factors, he added.
FORWARD COUNTER: Speculative issues on the cleared list also rose appreciably on active short covering. National Bank, Lucky Cement, MCB, and Bank Alfalah were leading among the gainers. Bank of Punjab, D.G. Khan Cement, Pakistan Petroleum, PTCL and OGDC followed them but rose modestly on higher volumes. — Muhammad Aslam
