After rising by another four per cent during the last week, the KSE 100-share index is poised to break through its most-coveted level of 2,000 points, possibly before the board meeting of the Hub-Power on September 4.

Massive buying in the leading base shares, the PTCL, the PSO and the Hub-Power, holding weightage of about 50 per cent in the index shows that the big ones are out to make sure it hits three-year highs.

“Unlike the country’s political spectrum, where followers match leaders, there are few big players and many followers in typical Pakistani conditions”, one broker jokingly said adding “the multitude follow them without asking the cause of rise and fall in the prices followed by the snap rallies or the sell-offs”.

All roads on the Karachi stocks last week led to the Pakistan State Oil (PSO) as the speculative forces were not inclined to loosen their squeeze, rather intensified it, pushing the 10-rupee share at one stage to a record high of Rs208.

Its privatization news, apart from the current bull-run owes the strength to a record cash dividend of 130 per cent plus bonus shares of 20 per cent.

The buying euphoria that followed assumed the role of a speculative squeeze and the consequent price flare-up. Its 10-rupee share rose to Rs205 from the previous week’s Rs179.

Other pivotals, notably the PTCL, the Hub-Power, the Engro Chemical and some others joined the PSO, allowing the KSE 100-share index to rise to a new peak level after successively breaching through different barriers to close around 1,974 points adding another Rs12 billion to the market capitalization at Rs456 billion.

The spectacular rise of the market despite good dividend from the mega issues has raised many questions, the most important among them being “whether the run-up is genuine or speculative”. The local market has a history of snap collapses after many a speculative price flare-ups in the past. There is no precise answer to this investor query from even some leading stock analysts.

After having absorbed the pre and the post-dividend impact on its share value, the trading in the PSO is now largely guided by the news from the privatization front, says a leading stock analyst but it appears doubtful, “whether the flare-up is genuine”.

During the post-dividend sessions, it has risen by about Rs40 though reacted in late trading after crossing the barrier of Rs200 at one stage.

But on the other hand another market leader, the Hub-Power came in for tactical selling ahead of its board meeting and conflicting perceptions about the size of the final payout.

“I don’t think, it could match the widely speculative figure of 50 per cent”, says a leading broker, “the best final from its management could be around the figure of 35 per cent”.

The index should have risen sharply higher but large foreign unloading in the Hub-Power contained it, as it has about 12 per cent weightage and is capable of influencing its trend either way.

The mid-week selling in it is linked to the board meeting in London on Sept 4, as the leading investors are inclined to push its share value lower and then to buy at lows, both for the capital gains and the expected higher final dividend.

“The partial offloading of the PSO and the PTCL shares may not be possible by next month but the bargain-hunters and the speculators made this look so at least for near-term, triggering buystops from all and sundry”, says a leading broker commenting on the persistent spectacular rise in the share value of the PSO at the current inflated level.

The sell-off a portion of a state stake in mega and massively capitalized issues such as the PTCL and the PSO needs a lot of groundwork and strategic buyers, he says adding, “both are lacking at this stage”.

Moreover, owing to the proximity of national elections on Oct 10, foreign investors will prefer to await the outcome of polls and the financial perceptions of the winning parties before going for sell-off.

Reports of the unloading of another five per cent shares of the National Bank at a discount of 10 per cent did not work against the ruling price of its share as speculated by the analysts, but rather it rose by 15 paisa at Rs23.75 on over 6 million shares.

Plus signs dominated the list under the lead of the PSO and the Parke-Davis, which posted gains ranging from Rs16 to 30. They were followed by the 4th, 9th and 13th ICP Funds, the Central Insurance, the IGI Insurance, the Sapphire Fibres, the Lakson Tobacco, the Shell Pakistan, the Pakistan Oilfields, the Shafiq Textiles, the Adamjee Insurance, the Noon Sugar, the Gillette Pakistan, the BOC Pakistan, the Pakistan Cables and several others, finishing with smart gains.

Leading losers were led by the Habib Arkady on the post-dividend selling, the National Refinery, the Balochistan Wheels, the HinoPak Motors, the Engro Chemical, the Packages, the Attock Refinery, the Rafhan Maize, the Nestle MilkPak, the Siemens Pakistan, the Shell, the LPG Gas, the Glaxo, the Pakistan Reinsurance Company and the Wyeth Pakistan.

Trading volume was maintained on the higher side, well over a billion shares for the second week in a row, about 80 per cent of which was shared by the Hub-Power, the PTCL and the PSO.

Other actives were led by the D.G.Khan Cement, the Engro Chemical, the ICI Pakistan, the Adamjee Insurance, the National Bank, the Dewan Salman, the Sui Northern, the MCB, the FFC-Jordan Fertiliser, the ICP SEMF and some others.

FORWARD COUNTER: Strong speculative activity in the PSO featured the trading on this counter, which showed persistent sharp gain, rising to Rs202.65 from the previous week’s Rs179. It was billed as the post-dividend buying flurry aided by the reports of early sell-off.