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| May 07, 2007 | Monday | Rabi-us-Sani 19, 1428 |
Stocks hit all-time record of 12,512 points
THE KSE 100-share index achieved an all-time high record in quick successions last week as positive news kept steadily flowing, never allowing investors to have an overview of the developing corporate scenario.
Apart from strong foreign buying in leading oil shares, the market received a big boost from reports that the CFS ceiling is being raised to Rs65 billion from the present Rs55 billion. The SECP and the KSE high-ups meeting was scheduled to be held on May 5 in this regard.
The last year’s all-time high record of 12,273 was broken on April 30,2007 at 12,369.7, it was surpassed the very next day at 12,433.22, and the weekend session saw it breaching through the barrier of 12,500 at 12,512.08, adding Rs64 billion to the market capital at Rs3,643 billion or $60 billion.
The free-float 30-share index also followed it and closed finally with a sharp rise of 492.16 points at a new high of 15,656.39 points.
The index appeared to be heading to set new records in coming sessions as foreign buying did not allow local investors to take a technical breather and no one was inclined to miss the rising bandwagon at this stage. Some skeptics are still wandering and mulling whether or not the current price flare-up was manipulated.
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“There may be some interruptions in between in the form of technical corrections, but next target set for the index based on the presence of strong foreign fund buying is not that elusive,” he said.
“It was a judicious blend of both local and foreign buying, although it was amazingly confined to selected counters”, analyst Faisal A. Abbas said. “But it has a positive impact on other blue chips also”, he added.
The index has been creeping steadily to stay above the 12,000 points level after foreign agency predictions that it could hit a target of 14,000 levels during the current year.
Cement shares were in the forefront of actives followed by reports that India, which needs 20 million tones of the commodity, has allowed import from Pakistan. Banks followed them on strong foreign buying and so did oil shares. Analysts at a leading research house said: “cumulative foreign portfolio investment during the year amounts to 10 per cent of the free-float market capitalisations of about 460bn and as the SCRA (Special Convertible Rupee Account) figures are rising each month, foreign buying is gaining in stature.
“There could be technical corrections here and there before the target was hit, but higher corporate earnings and payouts, including bonus shares, reflect that the new target may not be that far”, analyst Ahsan Mehnati believes.
But some others said future direction of the market would be finally set by the events on the political front, notably the judicial crisis as its negative fallout on stock trading could be enormous.
Heavy speculative buying in cement shares followed after India allowed import of the commodity from Pakistan. Bank shares followed them partly on reports of higher profits and partly on strong foreign interests in some of the leading banks. Both the sectors pushed the index higher and overshadowed the broader market, floor brokers said.
FORWARD COUNTER: Leading shares on the cleared list also followed the lead of their counterparts in the ready section and rose sharply higher on higher volumes. Leading gainers among them were OGDC, Pakistan Oilfields, Lucky Cement, D. G. Khan Cement, Nishat Mills, Fauji Fertiliser Bin Qasim, National Bank, MCB, Pakistan Petroleum and Bank Alfalah.—Muhammad Aslam
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