KARACHI, June 18: The KSE 100-share index on Wednesday broke the barrier of 3,300 points followed by strong speculative buying in the leading base shares aided by the optimism that a massive US aid package is awaiting President Musharraf.
The net rise over the day was 34.75 points or 1.06 per cent at 3,306.53. The total market capitalization also set a new all-time peak level at Rs734.580bn.
“The index could shed about 400 to 500 points after hitting its next target of 3,500,” analysts predict basing their assessment on renewed speculative buying during the president’s US visit. “Rumours about the opening of the floodgate of the US financial aid will not allow investors to sit on the sidelines as market is now in the tight grip of speculative forces.”
Those who managed to play the card of president’s US visit judiciously could be the ultimate gainers, although the situation is fraught with high risks for the small savers and the genuine investors.
It finally finished at the peak of the day 3,306.53, up 34.75 points over the previous close, indicating that its career-best level depending on the outcome of the president’s US visit is yet to come. Volume soared to 506m shares including 147m shares in Hub-Power alone.
Both the PTCL and Hub-Power holds about 44 per cent weightage in the index and if a set of operators decides to push the index to their pre-determined level they make massive buying in both and the end-result is always positive.
Hub-Power, which has been dormant for the last couple of weeks seems to have made the vehicle to push the index above the barrier and that was much easy than many have the idea behind it. A massive activity of 147m shares, in it reflects that the speculation about positive outcome of the president’s US visit is now a foregone conclusion.
“It is now a week away when Gen. Musharraf meets president Bush in Camp David but the speculative forces have initiated a virtual run on some of the pivotals to grab their floating stocks,” analysts said.
The sudden reemergence of an avalanche of buying orders without any supporting local factors excepting the prevailing speculation about a big US aid package for the president and its positive impact on the Pakistan economy. All perceptions are based on speculation.
“Bulls coin some positive factors to reinforce their ideas behind the run-up if there is none,” one broker said adding that “appears to be the case with the current speculative run-up.”
No one could deny the fact that the index was destined to rise above the 3,300 level but timing appears to be not that correct, he said. “It would have much better had the president been allowed to reach the American soil.”
Apart from the pivotals, notably PSO, PTCL, Hub-Power, Pakistan Oilfields, auto and most of the second-liners on other counters also attracted active speculative support and ended with good gains.
Leading gainers were led by EFU Life Insurance, Crescent Steel, Atlas Honda, Ferozsons Lab, Pak-Suzuki Motors and BOC Pakistan, which posted gains ranging from Rs4.50 to Rs7.75 but the largest rise of Rs13.35 was recorded in Javed Omer Vohra, one of the leading brokerage houses. There were many others, which rose by Rs2 to Rs2.90.
Prominent losers included Jahangir Siddiqui & Co, Shahtaj Sugar, Dadex Eternit, National Refinery, Packages, Al-Ghazi Tractors, Bhanero Textiles and Pakistan Services, off Rs2.10 to Rs5.50.
Trading volume swelled to 506m shares as gainers maintained a strong lead over the losers at 245 to 129, with 57 shares holding on to the last levels.
Hub-Power was massively traded, up Rs1.85 at Rs37.60 on 147m shares followed by PTCL higher by 40 paisa at Rs27.65 on 67m shares, D.G. Khan Cement easy five paisa at Rs22.70 on 25m shares, Engro Chemical, up 25 paisa also at 25m shares and Bosicor Pakistan, higher one rupee at Rs21.60 on 22m shares.
Other actives were led by Maple Leaf Cement, higher by 65 paisa on 16m shares, WorldCall, higher 75 paisa also on 16m, Lucky Cement, easy 20 paisa on 15m shares, PIAC, up 35 paisa on 14m shares and Southern Electric, higher by 85 paisa on 12m shares.
FORWARD COUNTER: Hub-Power also led the list of actives on the forward counter, up, Rs1.70 paisa at 37.60 on 20m shares, followed by PTCL, higher by 45 paisa at Rs27.80 on 8m shares and FFC-Jordan Fertilizer, easy 15 paisa at Rs13.80 on 2m shares. PSO was marked down by 20 paisa at Rs220.35 on 2m shares, while Engro Chemical rose by 25 paisa at Rs85 also on the same amount.
DEFAULTER COMPANIES: Shares of three dozen companies came in for modest covering purchases and generally ended higher under the lead of Medi Glass, up 20 paisa at Rs3.10 on 64,500 shares followed by S.S. Oil, higher 65 paisa at Rs6.40 on 39,500 shares and Amin Fabrics, up 30 paisa at Rs6 on 19,500 shares.