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THE KSE 100-share index last week virtually raced towards its next target of 11,000-level as despite mid-week interruptions in the run-up on snap profit-selling the overall sentiment remained uppishly inclined. The KSE 100-share index was up by 419 points and added Rs106 billion to the market capital at Rs3,010 billion.
The market witnessed a judicious blend of both genuine and speculative support modestly aided by foreign buying on the oil sector as investors continued to build-up long positions ahead of board meetings of some of the leading oil and bank giants.
The dividend-driven price flare-up was, therefore, well sustained as investors were not inclined to take even a technical breather despite brewing political crisis after the resignation of MQM ministers.
But the crisis was averted after MQM ministers took their resignations back after President Musharraf’s intervention and resumed normal working at their respective ministries.
Higher final dividend of 340 per cent by Pakistan State Oil, 125 per cent cash and 20 per cent bonus by Lakson Tobacco, 30 per cent bonus by Security Papers, second interim dividend of 20 per cent by Fauji Fertiliser, 66.66 per cent bonus by Arif Habib Securities and 100 per cent interim by Al-Ghazi Tractors, reflected that investor optimism about the future share business outlook.
Most of them are now eyeing the bank, cement and other leading shares board of meetings are due during the next couple of sessions, which could push the index to the next punter target of 11,000 points.
The KSE 100-share index finally finished with a sharp fresh rise of 419.06 at 10,772.58 as compared to previous 10,353.52 points as leading base shares tended further higher under the lead of OGDC, National Bank, Pakistan Oilfields, MCB and Pakistan Petroleum.
Leading analysts said no one is inclined to miss the rising market aided by reports of higher dividend by the leading oil, bank and cement shares whose board meetings were due during the current month.
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What seemed to have intensified the bull-run was report of the presence of strong foreign fund buying in the leading oil shares, notably OGDC and Pakistan Petroleum aided partly by GDR perceptions and the sell-off of the latter possibly during the current year.
An idea of buying euphoria may well be had from the fact that the big ones and leading punters apparently ignored the negative fallout of 0.5 per cent rise in discount rate and limit on banking and financial institutions to seek prior permission from the central bank for buying shares above five or 10 per cent.
PTCL also burst into activity followed by reports that its new management, Dubai-based Etisalat plans to list it on the Dubai bourse along with 10 other leading companies before the end of current year. It attracted strong buying after the report.
However, both the central bank moves are negative factors for the share business but their impact would be known in the weeks to come, brokers said.
Pakistan Petroleum, Pakistan Oilfields, OGDC, PSO and Shell Pakistan, whose board meetings are due in the current month, led the market advance followed by cement and bank shares whose boards were also due to meet shortly.
“Price flare-up without matching volume is a rare phenomenon in the share business,” says a leading stock analyst Faisal Abbas “it will prove deceptive for those who follow the market rise without having an overview of the situation”.
Many leading punters are reportedly trapped in some of the shares having purchased them at much higher rates, he said, adding “the post 11,000-level scenario could lead to a massive correction to be nicknamed as a bailing out operation”.
But some other said no one could rule out the possibility of massive correction saying the current run-up was genuine and could persist after the season of corporate announcements was out.
FORWARD COUNTER: Speculative issues on the forward counter followed the lead of their counterparts in the ready section and finished with sharp gains under the lead of National Bank, MCB, Pakistan Petroleum, Pakistan Oilfields, OGDC, D.G.Khan Cement, PSO, Engro Chemical, Fauji Fertiliser and many others.—Muhammad Aslam
