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| July 16, 2007 | Monday | Jamadi-us-Sani 30, 1428 |
Bull-run continues in stock market
STOCKS last week managed to recover from the early week’s shock of the Lal Masjid operation but late reports that the seminary was cleared again lured investors to the market amid an actively traded week as volume soared to new year’s high of over half a billion shares, reflecting that both genuine and speculative buying was at its peak.
The KSE 100-share index finished with an extended gain of 216.34 points at 14,202.23 adding Rs100 billion to the market capital at Rs4,204 billion. Although the market indicators were poised to scale new high in the coming week, a section of investors, including some foreigners, played safe amid lurking fear of a backlash of the Islamabad incident.
The Supreme Court’s stay on the sell-off of the Pakistan State Oils jolted its share value, but the market stayed firm on reports that the IPO of Habib Bank will open for public subscription from July 26 to 28 for the local and from 30 to 31, for the non-resident Pakistanis.
The KSE 100-share index settled well above the index level of 14,000 points as investors were back in the market and covered positions at the lower levels under the lead of oil, banks, cement and some of the undervalued shares.
There was, however, a brief interruption in the market’s run-up caused by the Lal Masjid operation, but investors resumed normal activity under the lead of foreign funds followed by a fresh price flare-up on the blue chips counter.
“Investors, including foreigners, seem to have decided to go by the positive fundamentals of the market rather than negative fallout of the Lal Masjid operation and the political polarisation after the formation of a grand alliance of the opposition political parties sans the Pakistan People’s Party for restoration of democracy in the country”, said a floor broker.
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The KSE 100-share index had been hovering around the coveted level of 14,000 points for the last couple of sessions. The modest rise in the index in each session reflected that most of the overvalued shares had reached their saturation points and bulk of the support was now confined to second-liners, mostly in the cement sector, which had massive potential of capital gains owing to over 100 per cent increase in exports.
“The Rubicon has at last been crossed in a scenario not fully conducive to the highly sensitive market”, said a broker, but he was not sure about its future trend.
“What next is now the question being debated among the bulls”, analyst Ashraf Zakaria said adding: “But the consensus appears to be to further build on the still fragile base of 14,000 points”.
“It was a judicious blend of both local and foreign buying linked chiefly to higher corporate earnings and market talk of handsome payout including bonus shares”, said a leading analyst Hasnain Asghar Ali.
While the legendary market leaders have been relegated to the secondary positions, low-priced ones in the cement and other sectors have assumed the role of trend setters.
The final list makes an interesting reading as most of the shares ruling below Rs30 have proved themselves as the market leaders and for good reasons too as the potential of capital appreciation in them is much bigger, analyst Ahsan Mehanti said. “It was for the first time in history of stocks trading that undervalued shares have outwitted their senior partners as each investor is out to minimise losses if any in the prevailing tensions”, he added.
Leading shares witnessed a fresh price flare-up under the lead of oil, banks, cement, and blue chips on all other counter owing to shortage of their floating stocks, while losses on the other hand were mostly fractional.
FORWARD COUNTER: Barring the Bank of Punjab, PSO and Lucky Cement, which finished lower on selling, most of the leading shares managed to finish higher on active follow-up support, leading gainers among them being OGDC, Fauji Fertiliser Bin Qasim, National Bank, Sui Southern Gas and some others.
—Muhammad Aslam
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