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THE KSE 100-share index, in the preceding week, briefly crossed the barrier of 9,600 points but failed in sustaining it on the week-end selling in some leading base shares. It ended with a fresh rise of 83 points thus adding Rs25 billion to the market capital at Rs2,734 billion.
However, the sustained march of the index to its previously hit level of 10,000 points continued for sixth consecutive week but not without technical corrections in between. This reflected the robust health of the broader market.
Fresh heavy buying in bank shares featured the stock market as the general investors and financial institutions continued to build-up long positions followed by the reports of higher earnings and the market talk of handsome payouts.
Boom-like conditions on the bank counter were reminiscent of a sustained bull-run in cement shares aided by the perception of a higher consumption once the rehabilitation in the quake-hit areas begins with full capacity.
Those who had been thinking that the bank shares had already reached the saturation points were a bit surprised on the latest run-up and mostly played safe without taking financial risks, analysts said.
The current boom-like conditions in some leading bank shares appeared more speculative than real as the dividend or bonus shares could not match the current price flare-up and there lurked the danger of a quick retreat on profit-selling, they added.
But after the mid-week pruning on profit-selling, the market resumed its upward drive, although the index failed in making a major headway beyond the level of 9,500 points. It oscillated either–way amid alternate bouts of buying and selling.
Trading resumed on easy note as some leading base shares ran into technical selling but mid-week witnessed the return of leading bulls and a consequent extension of the last weekend rally.
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After having fluctuated either-way by more than 100 points early in the session, the KSE 100-share index managed to finish with a fresh rise of 83.02 points at 9,514.83 as compared to 9,431.81 points at the last weekend. It touched the high and low at 9,609.54 and 9,371.74 points, respectively.
Cement shares led an early market rally on the perception of higher consumption under the lead of low-priced shares. But on the other hand oil shares stayed dormant amid reports of reduction in prices during the current fortnight at higher levels.
The Fauji Cement also came in for active support on reports that its management was planning to sell off in part its holding to prospective buyers, brokers said.
But a highly volatile performance of the index reflected that the major buyers were not inclined to take bigger risks until the issue of non-member chairmen of the stock exchanges was resolved.
There was a loud whispering in the rings that the bourses may comply with the SECP directive after December 15, elections of the directors as its chief had warned the warring contenders of using his legal powers to issue and implement the same, analysts said.
A strong technical correction was overdue but bulls were not inclined to take a bearish view of the developing situation on the prevalent battle of wits between the bourses and the SECP.
But reports that the Islamabad Stock Exchange had selected a non-member chairman, and that the KSE and the LSE may soon follow the suit had eliminated any chances of a big showdown between the contenders.
As the coming sessions appeared crucial for future market trend, leading investors played safe and did not take undue risks by opting for the overvalued shares.
The undervalued shares, notably the PIAC, the Pak PTA, the Fauji Cement and some others led the market rally on strong buying triggered by the perception of higher capital gains.
The Wyeth Pakistan which rose by about Rs300 owing to the shortage of floating stock was leading among the gainers followed by the Shell Pakistan, the Sanofi Avents, the AKD Securities, Al-Ghazi Tractors, the EFU Life, Attock Petroleum, Gillette Pakistan, Mustehkam Cement, Dawood Hercules, Rafhan Maize, Dawood Hercules, Shezan International and many others.
Prominent losers included the International Industries, Bhanero textiles, Lakson Tobacco, Shell Gas, Colgate Pakistan, Clariant Pakistan and some others. But losses were modest.
FORWARD COUNTER: Despite mid-week profit-selling, leading speculative shares managed to close with fresh good gains under the lead of the OGDC, PTCL, National Bank, MCB, D.G. Khan Cement, PSO and several others amid active trading.—Mohammad Aslam
