February 25, 2008	Monday	Safar 17, 1429

THE Karachi Stock Exchange 100-share index last week crossed the barrier of 15,000 twice but failed to sustain it on weekend profit-selling amid brisk trading judiciously shared by the local institutional traders and the foreign investors.

Analysts said a broad agreement among major political parties including PPP, PML-N and ANP to form coalition governments at the centre and in the provinces was expected to intensify the current run-up when trading resumes next week.

The fear of disagreement among the winners on some issues, earlier worked against the sentiments as investors were not sure about the final outcome and played safe, they said.

Stock market, therefore, roared to new highs on strong speculative and genuine buying at lower levels aided by the perception that transfer of power would be smooth.

Another supporting factor was the higher dividend and bonus shares announced by Bank Al-Habib and Askari Commercial Bank, cash and bonus at 15 and 30 per cent and 15 and 35 per cent respectively, and a final dividend of 25 per cent by the Faysal Bank. Some more good corporate news expected has reinforced the investors’ confidence in the market’s upward drive.

After briefly crossing the barrier of 15,000 points at 15,024 twice, the KSE 100-share index finally closed at 14,980.66 as compared to previous 14,353.34 points, up 626.82 points, adding Rs186 billion to the market capital at Rs5 trillion.

Indication are there that it could set new all-time high records in the coming sessions if all goes well on the political front and transition of power is smooth, said a leading broker.

Despite talks of a possible standoff between the president and the newly elected parliamentarians on some issues, mainly restoration of the Supreme Court judges and president’s resignation, the investors’ reaction reflects that the transfer of power would be smooth, analysts said.

This perception was reinforced by the re-entry of some foreign investors who, after a long absence, covered position on the oil and banking counters, and analysts said they might have found the cue for smooth sailing on the political front.

An idea of the buying euphoria may well be had from the fact that the price flare-up engulfed the blue chips counters with upper locks in most cases, notably banking, insurance, and the market capital soared to an all-time high of $76 billion.

Although there may still be many a slips between the cup and the lip, the stock market’s welcome to the people’s verdict reflects that the future economic outlook will be positive despite the fact the monster of inflation and deficit financing will continue to haunt the new political set-up for quite some time.

Some others said the market’s real direction would be known after the transfer of power to the elected members as rigid positions taken by some leaders on issues such as restoration of the Supreme Court judges could lead to a confrontation among them.

“The winning parties, PPP and PML-N, are considered the chief exponent of dominating role for the private sector”, analysts said adding “their previous performance on the economic front may not be that ideal but investors seem to have given them another chance in a democratic set-up”.

In their previous tenures of power about 400 new companies were listed on the KSE, raising the strength of listed companies to 962, which now has been reduced to 652 for various reasons including delisting and mergers.

Forward counters: Speculative issues on the cleared list also followed the lead of their counterparts in the ready section and generally rose where changed amid active two-way trading. The MCB, National Bank, OGDC, D.G. Khan Cement, Lucky Cement, Bank Alfalah, Askari Bank, Bank of Punjab, PTCL were among the major gainers.

—Muhammad Aslam