The KSE 100-share index broke the barrier of 3,100 points during the last week as leading base shares maintained their upward drive aided by a judicious combination of both the institutional and speculative support.
Although week’s best levels could not be sustained as strong weekend profit-selling by both the institutional traders and the bargain-hunters clipped in part some of the initial gains, the on-balance closing was on the higher side.
Prior to the weekend selling, the market established new records for the fourth consecutive week both in terms of meteoric rise in the KSE 100-share index and the market capitalisation in boom-like conditions fuelled in part by rumours of fresh incentives in the new national budget and the peace moves with India.
What seems to have added new dimensions to the prevailing buying euphoria was claimed to be the Indian prime minister’s pledge to secure peace with Pakistan or quit if his last effort failed to materialize.
Peace with India may still be a far cry but the current successive moves from both sides of the divide have certainly raised hopes of easing the long-standing tension between the two, analysts said.
The market, therefore, ignored, at least for the near-term, the current standoff on the LFO and its likely impact on the market’s future outlook if it was not amicably resolved. Both the government and the opposition has not shown flexibility on the issue of president’s uniform so far, which in turn has provided a convenient scapegoat to the rumour-mongers to float rumours including the winding up of the current political system.
Both the KSE 100-share index as well as the market capitalization stood at their all-time levels of 3,136 points and Rs690 billion respectively.
Analysts predict the current forward thrust of the market will continue boosted by pre-budget speculative buying and bargain-hunting, although it will manifest itself in a big way by early next month.
“It will not call the index’s meteoric rise to a record level as a prelude of its upward march to some new targets but one thing appears certain that the liquidity-driven could work wonders in the coming sessions also,” an analyst who is still in two minds about the future direction of the market says.
Technical corrections notwithstanding, the possibility of a massive retreat at this stage appears remote, he says. “The future key of the index is now in pretty safe hands.”
After rising further higher to 3,136, it finally finished lower at 3,099.04 points as compared to 3,079.95 at the last weekend as leading base shares managed to put on fresh gains despite weekend profit-selling.
Over the last three weeks, it has successfully breached through the barriers of 2,900, 3,000 and 3,100 points, rising over 200 points or about 12 per cent after bettering its all-time records in quick succession.
The total market capitalization is also eying the target of Rs700 billion and it is expected to be hit if all goes well on the political front and the LFO controversy is amicably resolved.
Pakistan Oilfields on reports of higher profits and early selloff and PSO were among the overvalued shares, which led the market advance to a new record level but the notable feature was that most of the second-liners attracted bulk of the support as an attractive bait of capital gains dominated the entire trading.
“The rally above the 3,100 index level was terribly broad-based as investor buying interest spilled over to a wide sectors of the listed shares,” analysts said. “Never before in the history of the KSE such a record number (478) of shares came in for trading in a single session.” It was more than a half of the total listed shares of 704.
Some years back the number of total listed companies was 862, but it has progressively shrank to the present total owing to delisting sought by some of the managements, while some others defaulted for violating the listing rules.
For the last couple of years, the number of active shares seldom touch the high mark of 300 both sides including the static ones, but the figure of 478 active scrips reflects that the market is heading to establish new records both in terms of index and the extent of capital gains.
“The number has certainly given the depth to stock trading as bulk of the support outflowed to the second-liners from the blue chip counters”, says a leading broker adding “this ensures it may not be possible for the speculators or the bargain-hunters to outwit the small savers that easily.”
He says a number of investors are also unloading their positions in the high profile-shares to buy the low-priced ones in apparent bid to realize quick gains rather than making long-term investment.
Plus signs dominated the trading list under the lead of Javed Omer, PSO and Pakistan Oilfields followed by Sitara Chemicals, Wyeth Pakistan, Rafhan Maize, Dreamworld, Shahtaj Sugar, Pakistan Refinery, Shafiq Textiles and Bhanero Textiles, Siemens Pakistan, IGI Insurance, Pakistan Refinery, Colgate Pakistan, Central Insurance and many others.
Atlas Honda and Treet Corporations were leading among the losers, followed by Noon Sugar, Parke-Davis, Bata Pakistan, Metropolitan Bank, Reckitt and Benckiser, Otsuak Pakistan, Artistic Denim and some others.
Trading volume was maintained well above the billion share mark at 1.342bn shares thanks to heavy active bouts of buying and selling in the cement and energy shares.
Hub-Power and PTCL were among the top volume leaders, followed by D.G. Khan cement, Lucky Cement, Sui Northern Gas, Nishat Mills, KESC, Pakistan Oilfields, PSO, Bosicor Pakistan, ICI Pakistan and FFC-Jordan Fertilizer.
FORWARD SECTION: After early run-up on strong mid-week speculative buying speculative shares came in for active selling and fell under the lead of PTCL, Hub-Power, PSO, and some others, although losses were fractional and reflected portfolio adjustment rather than panic selling. Sui Northern Gas and some others managed to finish steady. —Muhammad Aslam