A LATE burst of profit-selling at inflated levels by most of the weakholders at the fag-end of last week did not allow the market to attain the coveted index level of 1,400 as earlier speculated by most leading analysts.

Trading in the forward counter was highlighted by the switching operations from November settlements to December contracts after liquidation of the former bulk of which was confined to the Hub-Power and the PTCL. The PSO was leading among the losers in sympathy with its ready counterpart and so did some other pivotals including the Engro Chemicals and the MCB.

All indicators pointed to a progressive bull-run as most of the major market irritants have been removed one by one and everybody was anticipating the return of sanity to stocks trading but bears think otherwise in the name of consolidation before any sustained run-up.

However, there is nothing to worry for prospective investors as much now has changed in the post-Afghan war financial scenario and those who know it are building long positions, where warranted.

Earlier in the week, stocks limped back to normal trading activity followed by the resumption of covering operations at the lower levels in the pivotal, but fears about the Afghan war’s negative impact on the economy still worry both the general investor and the institutional traders.

The selling at the fag-end of the week by weakholders who failed to benefit from the modest “badla” rate margins clipped most of the earlier gains even on the blue chip counters under the lead of the PSO, which finished with clipped gains and so did the Hub-Power, the PTCL, the ICI Pakistan and the Engro Chemical.

The KSE 100-share index was, therefore, quoted lower from the week’s peak level of 1,379 around the previous closing of 1,355.06 points.

However, a number of positive developments on national front including a preferential trade agreement with the European Commission, fresh aid inflow and the market talk that Pak-Kuwait Investment company has offered to sell five million shares of Pakistan State Oil (PSO), held in its portfolio, to a Dubai-based oil marketing giant lured investors back in the ring until mid-week.

The PSO has been a driving force behind the mid-week rally as heavy support in it fuelled by the rumours also evoked sympathetic buying in the shares of other blue chips, notably the PTCL, Hub-Power, the ICI Pakistan, Engro Chemical, the MCB and several others.

Most of the leading textile shares came in for strong covering purchases at the lower levels on the perception that increase in textile export quota and tariff cuts under the recently signed agreement with the European Commission could give the needed push to both exports and textile production.

Selective support was, however, evident on a number of counters by way of replacement buying. Rupali Polyester, for instance, came in for active support after the announcement of 50 per cent cash dividend and so did the PSO after being quoted ex-dividend.

Stock analysts at the W.E. Financial Services say the market should have given a favourable reaction to the signing of the preferential trade package with the European Commission envisaging cut in tariffs and an increase in the textile quota, investors stayed away apparently yearning for immediate stimulants.

However, no one could deny the long-term positive impact of the EU deal both on the industrial and export sectors, which in turn could boost stock trading, they add.

But some others claim a substantial amounts of cash are tied to the recently floated five per cent shares of the National Bank of Pakistan and until they are freed, stock market may remain poorer as far as the hard cash is concerned.

The National Bank issue was claimed to be massively oversubscribed as it received including from the Gulf a total amount of Rs745 million against the offer of Rs186 million. After balloting, possibly by the end of next week or early next week, huge amounts will be freed and are expected to be reploughed in the share business.

Currently, its 10-rupee share is fluctuating between Rs12.50 and Rs13.50, the lowest and the highest for the week with large volumes.

Stock analysts at the Moosani Securities predict lean days for share business may be on their way out on the reopening of the foreign credit lines after the removal of economic sanctions, near-end of the Afghan war are all positive factors, which give the needed push to the volatile market.

“In the changed political scenario, the post-Afghan war Pakistan could well be the envy of foreign investors and the share market could be the chief beneficiary being the vehicle of quick gains”, a leading stock analyst at the AHRL Securities predicts.

The current sluggishness is temporary partly because of the holy month, he says adding the current lower levels of some of the pivotals including the PTCL, the Hub-Power and the ex-dividend the PSO could well prove an attractive bait for any prospective investor.

But investors were worried over the lower dividend of 130 per cent from the Siemens Pakistan Engineering, which had paid a higher dividend of 150 per cent last year. Brokers said keeping in view the relevant factors the rate is not that bad as was reflected by a late recovery in its share value.

Major shares led the late market decline under the lead of Colgate Pakistan, which had, during the last couple of sessions, shed over Rs25 for no apparent bearish reports, Lever Brothers, followed by the Treet Corporation, Berger Paints, Jahangir Siddiqi & Co and Gatron Industries and some others.

The advancing shares were led by the Rupali Polyester, up Rs4.25 in response to a good dividend of 50 per cent, Knoll Pharma, Abbott Lab, Al-Jadeed Textiles, Karam Ceramics and many others. The Knoll and Abbott rose on reports that the government has allowed three to four per cent increase in the selling price of drugs, meeting the long-standing demand of the pharmaceutical industry.

Trading activity was relatively slow as the total volume fell below the 300 million share mark owing to lack of strong speculative activity. The PTCL and Hub-Power led the list of most actives, accounting for 60 per cent of the total volume followed by the ICI Pakistan, Engro Chemical, the PSO, Fauji Fertiliser, Sui Northern Insurance, the MCB, D.G.Khan Cement, Nishat Mills, Dewan Salman and several more on other counters. —Muhammad Aslam