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| June 25, 2007 | Monday | Jamadi-us-Sani 09, 1428 |
KSE share index sheds 486 points on rumours
THE disqualification reference against the prime minister seems to have taken steam out of the market at the fag end of the last week as a section of investors indulged in panic selling reinforcing the perception of political uncertainty.
Just in the backdrop of on-going judicial crisis a new front of references has been opened by the contenders of power, which, analysts said, could destabilise the current market performance in the coming weeks as no one would like to invest in the share business in the developing political scenario.
The investors’ worries were also reflected in an erratic movement of the KSE 100-share index, which earlier last week hit the peak of over 13,600 points and low of 13,249.00 under the cross-current of positive and negative news.
After initial sustained run-up on active follow-up support, share market later showed a volatile trend as some of the negative news did not allow investors to make fresh commitments.
The weekend panic selling took away much of the initial gains from the market. The KSE 100-share index finished the week with a fall of486 points at 13,392.47. The market failed to sustain gains above the 13,500-level as bears fought back to keep it below this level.
Rumours of delay in the bidding date of PSO for sell-off after June 20 at the pre-bid meeting of bidders, and dissolution of assemblies leading to snap national elections, were some of the negative factors, which halted the market's early week sustained run-up, analysts said.
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Cement, oil and banking shares remained in the limelight on reports of higher earnings and rose appreciably amid active trading.
But the significant feature of mid-week trading was that about a dozen secondary issues came in for strong speculative buying on the perception that they ensure handsome capital gains in future but no major financial risks being undervalued.
The KSE 100-share index earlier resumed its upward march to its next target of 14,000 points as foreign investors and local institutional traders covered positions in oil, cement and banking sectors at the weekend lower levels but late selling allowed it finish modestly lower.
“The index level of 14,000 points now is not an elusive goal”, predicts one analyst and adds, “strong renewed buying in the cement, oil and bank shares could comfortably take the index to that level after the consolidation phases”.
It appears to be a grand technical rebound, of course, after due technical correction, brokers said adding, “oil giants, OGDC and PSO being the main players”.
“The return of foreign buyers though on selected counters apparently on renewed US support for the existing setup and perception of continuation of the existing policies appears to be the chief inspiring factor behind the current run-up”, said a leading analyst and that “could shape the market in coming weeks also”.
The Pakistan State Oil (PSO), which was under pressure for the last couple of sessions on reports of petition filed by the Attock group on its participation in the pre-bidding meeting, was again in limelight but finished with clipped gains.
Forward counters: Speculative issues on the forward counter showed mixed trend amid alternate bouts of buying and selling. While Lucky and D.G. Khan Cement and some others managed to finish with an extended gain, the Bank of Punjab, National Bank and OGDC fell on mid-week selling.—Muhammad Aslam
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