The KSE 100-share index failed to sustain the crucial level of 4,900 points despite a couple of abortive efforts in the preceding week. Bears were in no mood to cooperate with the bulls despite positive peace talks with India.
Those eyeing an index level of 5,000 points during the week on the strength of peace talks with India appear a bit disappointed in the absence of strong financial support and a good bit of bargain-hunting.
"Bulls are not inclined to indulge in speculative run-up beyond the 5,000-point index level", the chief worry is its sustainability after due technical consolidation". That is perhaps why the index, after breaching through the barrier more than once, failed to sustain it in the absence of a will to hold fast.
Positive outcome of the Indo-Pakistan peace talks in Islamabad, therefore, did cause bullish flutters here and there but each rise was followed by an identical dip in the absence of a strong follow-up support.
Perceptions that the Indo-Pakistan peace talks would continue which would also settle some bilateral issues, including Kashmir raised the hopes of normalization of relations between the two neighbours. This could further boost stock trading.
After highly erratic movements, the KSE 100-share index finally finished with a modest decline of 5.40 points at 4,868.82 as compared to 4,874.22 points, a week earlier and so did the market capital at Rs1,265 billion. Both touched the week's peak level at 4,915 and Rs1,273 billion, reflecting the change of positions by leading institutional traders.
The highly volatile performance of the market, however, reflects that the leading investors may have some reservations about the final outcome of talks as in their opinion, "peace may still remain an elusive goal".
However, investors certainly played on the tune of higher dividend news, mostly from the banking sector, both in terms of cash and bonus shares, giving pleasant surprise to leading stock analysts.
The Bank Al-Habib's 10 per cent cash plus 25 per cent bonus, the Union Bank's 10 per cent cash and an identical amount of bonus shares, the MCB's 10 per cent bonus plus 27.5 per cent cash and the Prime Bank's 12 per cent cash and 10 per cent bonus shares all give a fair idea of the banks' earning during the last year.
What seems to have changed the market outlook were reports of meeting of the Singtel team with President, which investors think could well prove a prelude to its disinvestment.
Rumours about the fixation of final date of bidding for the PTCL sell-off also aided the mid-week strong rally but both the shares flattered from the peak level on late selling as reports were not confirmed by any official quarters.
For more than one sessions, the PTCL is a keenly sought after share, and in the process has crossed the barrier of Rs40 on large volume on the market talk of its possible sell-off to Singtel, says a leading broker. Reports of an accord on the agenda of further high-level peace talks between Pakistan and India in Islamabad meeting was another aiding factor raising hopes of normalization of relations between the two neighbours.
"Broad agreement with India on all issues including Kashmir may still be an elusive goal, the prevailing optimism reflects there could be a major breakthrough on other counters as well", analysts hope.
The mid-week breach of the level of 4,900 for third time during the current month reflects bulls are out to maintain their upward drive but bears go into action after this level is touched.
"But I don't think bears could halt its upward drive this time", analysts said, adding "the on-going peace talks with India, higher corporate dividend, steady inflow of foreign investment buying may not allow the leading bulls to sit idle".
News of interest shown by a leading MNC to purchase the controlling shares of the PTCL, coupled with higher interim earning was another stimulating factor trigging a lot of speculative activity in it and some other leading issues, which had dropped sharply during the last three sessions.
Auto shares, which have been under persistent selling since the Cabinet decision to allow import of second-hand and reconditioned cars, and a cut in import duty also attracted active buying at lower levels on the strength of higher earnings. Energy shares followed them after having received massive battering during the last couple of sessions. Leading among them recovered appreciably from the current lows.
Meanwhile, the market showed a mixed reaction to the setting up of an experts' committee by the SECP to formulate a comprehensive plan for demutualization and integration of the country's bourses.
A meeting has been called by the high-ups of the exchanges on February 28, in Lahore to debate the issue including its merits and demerits. All the pivotals virtually raced towards their pre-reaction levels amid active trading.
Leading gainers being the PTCL, the Engro Chemical, the Fauji Fertiliser, the ICI Pakistan, Dewan Salman and the Sui Southern Gas on reports that its recent issue including the five per cent green-shoe option was heavily oversubscribed. The refund will be made by March 2, 2004.
The Fateh Textile and Javed Omer led major gainers followed by the HinoPak Motors, the PSO, the Shell Pakistan, the Attock Refinery and the Pakistan Refinery ahead of board meeting. The Gatron Industries posted gains and so did many others, including the Nestle MilkPak, the Parke-Davis,
Losers were led by the Dreamworld, the Siemens Pakistan, Javed Omer, the Millat Tractors, the Al-Ghazi Tractors, the Pak-Suzuki, the Indus Motors, the HinoPak Motors, the Atlas Battery, and the Unilever Pakistan. Other prominent losers, included the Pak Gum Chemicals, the Aventis, the Clover Pakistan, and the IGI Insurance. Some of them managed to finish higher from their earlier lows.
FORWARD COUNTER: Unlike the volatile performance of the ready counters, forward sector showed firm trend as some leading shares posted fresh gains under the lead of the PSO, the Hub-Power, the Fauji Fertiliser, the Engro Chemical and some others. The MCB and the Pakistan Capital Market Fund remained under pressure and fell modestly and so did some others.