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| July 02, 2007 | Monday | Jamadi-us-Sani 16, 1428 |
Stocks approaching 14,000-point level
THE Karachi Stock Exchange 100-share index last week steadily rose to its new career-best level of almost 13,800 points, signaling it could take a technical breather after having hit the new target of 14,000 points.
Over the week it was only 200 points below its target but weekend considerations prompted profit-selling from some of the weaker links of leading investors.
The steady rise to new highs was not achieved just in one go, but it came after consolidation which reflected investors’ perceptions of a robust market.
Stocks, therefore, finished the financial year ending June 30, 2007 on a bullish note amid new all-time records both in terms of index level and the market capital thanks to strong foreign and local year-end institutional support.
After having broken successive barriers, starting from 10,000 to well above 13,700 points during the second half of the fiscal, the KSE 100-share index finally finished at 13,272.46 compared to 13,392.00 points a week earlier, higher by 379.99 points. The KSE 30-share index also rose by 294.04 points at 16,993.51.
Since January this year it has risen by about 26 per cent or 2,800 points, reflecting the strength of leading base shares amid unprecedented price flare-ups.
The market capital also swelled to well over Rs4 trillion, a new carrier-best level as leading oil, bank and cement shares rose to new highs.
Indications are that the new fiscal year market debut on next Monday is expected to be on a bullish note as both genuine and speculative buying are still around in a bigger way aided partly by the presence of foreign fund covering purchases.
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Trading on the market resumed on a higher note as dust raised on the Bank of Punjab issue settled down after belated clarification by the government of Punjab. But meanwhile, bigger damage has been done to its stakeholders besides other investors as conflicting rumours about financial irregularities kept pouring in since last week leading to panic selling of its share.
However, official clarifications triggered active short-covering in its share value, which recovered a good part of the initial losses.
The recovery led by the bank, cement and oil sectors was, however, broad-based which covered most of the current favourites, the notable feature was that low-prices issues having potential of capital gains, notably TRG Pakistan and Maple Leaf Cement and some others came in for active support and ended with fresh good gains. The successful issue of the United Bank’s GDR by the government, which has raised $650.3 million from its sale of GDR after listing it on the London Stock Exchange, was another supporting factor behind the rally. Its local price comes to Rs195 per share based on its GDR. Recently, its share value had soared to Rs225 in anticipation of higher local price.
“The market has again demonstrated that it has chosen to follow its own fundamentals as it responded to the Bank of Punjab issue and not to be influenced by the external negative factors”, analyst Ashraf Zakaria said.
The market has more than one reason to remain in good shape at least for the near-term, he said, apart from higher earning reports the other supporting factor is the strong presence of foreign investors.
The last week of the month was rollover week and needed technical adjustments here and there, but the outstanding amount of well over Rs10 billion was carried over to the July settlements from the expiring June contracts, some others said.
FORWARD COUNTER: Speculative issues on the forward counter maintained their upward drive and generally finished higher under the lead of Bank Alfalah, Lucky Cement, D.G. Khan Cement, Bank of Punjab, MCB, National Bank, Nishat Mills, Askari Bank, Fauji Fertiliser Bin Qasim and several others.
—Muhammad Aslam
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