KARACHI, May 24: Stocks at the Karachi share market got off to a storming start and the KSE-100 index closed at unprecedented 12,663 points on Thursday on massive foreign and institutional buying.

Stock broker, Arif Habib attributed the bull run that led to an all-time high index level to expectations of an ‘investment friendly’ federal budget 2007-08 about which indications had been given by some people in responsible government positions. He also mentioned diversified investor base, which included individuals, mutual funds, financial institutions and foreign investors. “Selling by one is quickly absorbed by others”, he said.

Almost everyone at the market was staring at the SACRA numbers released by the SBP, which showed portfolio investment by foreign investors. At the moment those stood at $750 million. “Only this month the foreign inflow into the equity market has been of the order of $150 million”, said a market participant.

But Iqbal Ismail, chairman ACE Securities, speaking from Dubai-- where representatives of most big Pakistani stock brokerage houses had gone hunting for clients-- thought that what had already entered the Pakistan capital market was ‘peanuts’. He said that only in Gulf countries, investible surplus this year amounted to a staggering $150 billion. “Home markets to them provide at best 4 per cent return, while Pakistan markets give total return of over 12 per cent”. Investor sentiments in equity investments all across the region had taken a turn for the better and some of those funds were spilling over into the Pakistani capital markets.

Mohammad Sohail, director Equity Broking at JS Global Capital thought that the market had discounted the political situations and put its faith in continuity of economic policies of the government. He said investors were buoyed by corporate earnings growth, which was envisioned to stay at around 15-20 per cent for the next 3-4 years, on the back of country’s economic growth rate forecast at 6-7 per cent.