KARACHI, Jan 16: The main Karachi Stock Exchange index on Monday crossed the 10,000-point mark for the second time in the bourse’s 47-years history. The KSE-100 index closed at 10,093 points with a gain of 103 points.

The index was, however, still short of its all-time high level of 10,303 points attained 10 months ago on March 15, 2005.

A rising trend, witnessed in the bourse after the week-long Eid holidays, was sustained by NBP and MCB shares in banking and DGK and Lucky in cement sectors.

In dollar terms, KSE’s market capitalization rose to an all-time high level of $48 billion.

Highlighting Pakistan capital markets’ impressive performance for fifth consecutive year, stock brokers attributed the current bull-run to upcoming corporate results and higher oil prices. Most analysts agreed that investor confidence had been buoyed by appointment of a new chairman of the Securities and Exchange Commission of Pakistan.

The euphoria was, however, tempered by small investors’ dread about the events that had followed the spike. The index had plunged down by almost 25 per cent in about a week.

But brokers insisted that there was a fundamental difference between the current and the March 2005 rally. “The current rise in stock values is less speculative and broad based,” a senior broker said.

He pointed out that previous spike was signified by low volumes and trading in shares all across the board. He said that the price-to-earnings (p/e) ratio was at least five times below that of March 2005. The March 2005 stock bubble was mainly blown up by four stocks: OGDC; PTCL; PSO and PPL, with the weightage of the first two in the Index as high as 50 per cent. The biggest difference, he said lied in the shares bought on borrowed money (leverage position) that had climbed to as high as Rs78 billion in March 2005, but currently stood at almost half of that at Rs40 billion.

Most brokers insisted that share values would continue to edge higher, but some stock strategists cautioned that value of some shares had entered what they termed ‘over-bought’ zone.

They also seemed a bit uneasy over the domestic political situation, which could impact the positive investor sentiment.