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| December 24, 2007 | Monday | Zilhaj 13, 1428 |
Higher payout prospects push market upward
DESPITE a bit of good midweek profit selling ahead of the Eid holidays, stocks in a shortened week ended with extended gains followed by strong support on selected counters.
The snap pre-Eid holiday rally gave a pleasant surprise to many leading analysts who failed to understand the specific reasons behind. It was, however, not a technical rebound and may have some developments behind, which will be known during post-holiday trading, brokers said.
The market should have ended in the minus column after the sustained rise for the last couple of weeks, but the snap rally at the weekend session aided by strong covering purchases in the oil and banking sectors on reports of higher earnings and payouts again put it in the plus territory.
The KSE 100-share index finished with a fresh gain of 102.3 points at 14,658.83 as compared to 14,556.53 a week earlier, reflecting the strength of leading base shares. The KSE 30-share index also rose by 75.61 points at 17,463.25.
The strong snap weekend rally that too ahead of a long holiday weekend gave a pleasant surprise to many, said a leading broker adding “it is not inspired and appears to be genuine.”
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“I don’t call it the advent of foreign buying at this stage, but the mode of covering purchases reflects it may be around”, he added.
The weekend rally also shows that the bulls were not inclined to miss the run at the current lower levels of some of the leading shares. The investors had already made necessary portfolio adjustments after the announcement of date for lifting of the emergency during the last two weeks and did not make fresh investments owing partly to a long weekend ahead of Eid holidays, said a leading stock analyst Ashraf Zakaria.
“No one is inclined to take financial risks as any thing could happen during the coming holidays”, analysts said adding “however, the market is expected to witness flutters here and there during the last week of the fading year, having more than one records both in terms of index level and price flare-ups”.
Higher corporate earnings, attractive lower levels reached by some of the leading shares and expectations of strong presence of foreign investors could push the market to new highs during the coming weeks, some others said.
Analysts Ahsan Mehanti said leading investors were awaiting the post-emergency debut by foreign investors possibly by the first week of the next year and that would give a fair idea of future market outlook. A good number of weak-holders and jobbers were among the sellers for obvious reasons as they wanted to get out of the market well before Eid holidays.
Forward counter: Speculative issues on the forward counter also recovered from the early week lower levels and finished modestly higher under the lead of OGDC and MCB. Askari Bank, Bank of Punjab, Bank Alfalah and some other leading base shares also came in for active support and closed on a higher note. — Muhammad Aslam
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