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AFTER having crossed the barrier of 14,000 twice during the last week, the KSE 100-share index finally finished slightly below it as leading punters played on both sides of the fence apparently on some pressing technical reasons.
But on the other hand its junior partner, the free float 30-share index seems to have reached its saturation point, and was quoted modestly higher by 32.74 points at 17,035.49 after two downward adjustments.
The Lal Masjid standoff did take its toll after the operation began, but investors later ignored after some positive developments on the issue, including surrender of one of the chief clerics along with 1,200 students.
However, investors mood reflect that the future war of wits between the bulls and bears will be fought above the index level of 14,000 points as strong presence of foreign buying and higher corporate profits would not allow them to sit on the sidelines.
After having touched its career-best level so far at 14,029, the KSE 100-share index finally ended around 13985.89 points as compared to 13,772.46 points a week earlier, fresh gain of 213.43 points.
The market capital also soared to a new peak level of Rs4,103.727bn, up by Rs85bn as compared to last week's 4,094.795bn as heavily-capitalised shares ended higher.
What is important about the current run-up is that unlike previous bull-run, buying support did not outflow to other sectors but remained very much in the market, although it changed its portfolio investment strategy.
Low-priced shares, particularly in the cement and telecom sectors being traded at an attractively lower levels and having potential of capital gains had now assumed the role of actives.
The Lal Masjid operation, however, briefly intercepted the market's upward drive as investors sold in panic fearing law and order situation in other parts of the country as a result of Islamabad casualties.
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But the reaction billed as an overdue technical correction proved short-lived as bulls fought back on the strength of positive corporate background news and higher earnings reports.
A higher dividend at the rate of Rs6.20 per unit by the National Investment Trust (NIT) did provide much needed relief to the shaky investors but the army action on the Lal Masjid again reversed the situation.
Earlier, the KSE 100-share index breached through two consecutive psychological barriers and analysts said there appears to be no near-term end to the existing bull-run after the target of 14,000 points was hit.
At one stage, it was only seven points below its hereto considered an elusive goal of 14,000 at 13,951 but at the last moment bulls gave a breathing space to the massively battered bears postponed it for another session or two.
“The index level of 14,000 points is expected to be crossed in any session next week but what next is the question being debated in the relevant quarters”, analyst Ashraf Zakaria said adding “it may rise further but after having gone through a technical correction being in a highly overbought position”.
Although index heavy weights, notably OGDC, MCB, National Bank, PTCL, Lucky Cement and some other leading shares were behind the current sustained run-up, incredible role played by the second-tiers stocks for keeping the buying interest intact on an attractive bait of capital gains could well be the chief inspiring force behind the sustained rally.
Pak PTA, TRG Pakistan, Fauji Cement, Dewan Cement and Nimir Chemicals, Telecard, World Call Telecom and Bosicor Pakistan, which are considered undervalued but having potential of capital gains absorbed much of the selling overflowed from the overvalued shares.
“What seems to have given the credence to the market's current outstanding performance was, among other things, the strong presence of the foreign support”, analyst Hasnain Asghar Ali said. “But what make them so sure of the market's viability in the polarised political scenario is not clear,” he added.
Interim corporate earning reports for the half year ended June 30, are said to be on the higher side of the market perceptions and market talk of bonus shares by some of the undervalued companies did not allow investors and punters to keep to the sidelines for a single session.
However, it goes to the credit of the market that its performance is not influenced by the external factors as investors seem to have decided to go alone and in line with the market fundamentals rather than the fear of political uncertainty.
FORWARD COUNTER: Oil and cement shares led the list of actives on this counter under the lead of OGDC, Pakistan Petroleum, Lucky Cement, D. G. Khan Cement, Fauji and Maple Leaf Cement followed by leading bank, notably National Bank but Bank Alfalah and MCB fell from the recent highs on selling. But other speculative issues generally rose amid slow activity.
—Muhammad Aslam
