KARACHI, June 10: The KSE 100-share index on Monday rose by six per cent on strong speculative buying triggered by reports that India has indicated to take positive steps to defuse the tension on the borders between the two nuclear neighbours allaying fears of war. It ended at 1,791.72 points, up 100.43 points.
Although sanity on the borders may not immediately return after the Indian peace overtures, the resolve not to go to war before exhausting all peaceful means through bilateral talks could avert awkward situations or the last option.
“The spontaneous bullish market reaction to positive moves reflects how it is yearning for peace,” says a leading KSE member commenting on the buying euphoria, which followed good news from across the border and the market’s spectacular rise to its pre-reaction level. “The 6 per cent rise in the index means an increase of over Rs.20bn in the market capitalization at Rs.415bn.”
The index had also showed steep rise of 135 points last month on identical news from India allaying fears of war after peace moves launched by some of the leading world power brokers.
However, some of the leading analysts are still in two minds and are not inclined to “go for a big kill” until India specifies steps to ease the war-like hysteria, and mostly played safe.
“The US may be an honest peace broker in the subcontinent,” says a leading stock analyst. “But it is unwise to ride the bandwagon just enthused by press reports.”
However, there is a reason to believe the buying in part was also aided by feelers that the new budget will be investor-friendly. The national budget is due on June 15.
Although the details of peace moves by India leading to easing of the current tension are still awaited, an optimism prevails in the rings of a tangible change in the prevailing market psychology.
“The market could stabilize around the index level of 1,800 for the near-term, but it has the potential to test the 2,000 point level if the Indian peace plan is in line with its future perceptions,” leading stock brokers feel.
Plus signs were spread all over the list, although bulk of the buying remained confined to the two volume leaders Hub-Power and PTCL, which holding 43 per cent weightage in the index together accounted for 131m shares, out of the total volume of 222m shares.
Energy shares, notably PSO, Shell Pakistan, Pakistan Oilfields and blue chips such as Nestle MilkPak and Grays of Cambridge were leading among the gainers, rising by Rs.7.95 to 10.
Most of the gains were handsome, notably of those whose floating stock is terribly short and mostly reflected portfolio readjustments rather than fresh speculative buying.
The shares, which rose by over Rs.2 were led by Adamjee Insurance, Ghani Glass, Attock Refinery, National Refinery, Lever Brothers, BOC Pakistan, ICI Pakistan, Al-Ghazi Tractors, Millat Tractors, Dawood Hercules, Fauji Fertilizer and Engro Chemicals, rising by Rs.2 to 14.
Barring SK&F and Pak Reinsurance, which fell by Rs.2.25 and 11, losses were fractional and reflected lack of support rather than large selling.
Turnover rose to 222m shares from the previous 79m shares as gainers forced strong lead over the losers at 233 to 45, with 37 shares holding on to the last levels.
Hub-Power topped the list of most actives, up Rs.1.60 at Rs.24.60 on 78m shares, followed by PTCL, higher by Rs.1.50 at Rs.17.55 on 53m shares National Bank, up Rs.1.35 at Rs.19.90 on 11m shares, Sui Northern Gas, firm by 90 paisa at Rs.14.45 on 11m shares, FFC-Jordan Fertilizer, steady by 50 paisa at Rs.7.05 on 9m shares, KESC, higher 50 paisa at Rs.5.55 also on 9m shares and Pak PTA, up 30 paisa at Rs.5.80 on 6m shares.
Other actives were led by D.G. Khan Cement, higher 40 paisa on 5m shares, Engro Chemical, up Rs.2.65 also on 5m shares and ICI Pakistan, higher Rs.2.80 on 4m shares.
FUTURE CONTRACTS: Speculative issues on the forward counter showed a general price flare-up on strong short-covering, leading gainer being PSO, up Rs.9.75 at Rs.139.75 on 3.631m shares. Fauji Fertilizer, ICI Pakistan and Engro Chemical also breached through their circuit breakers, rising by Rs.2.45, Rs.2.75 and Rs.2.80 respectively.
Other actives were led by PTCL, higher by Rs.1.50 at Rs.17.65 on 6.843m shares, Sui Northern Gas, higher 90 paisa at Rs.14.40 on 2.767m shares and FFC-Jordan Fertilizer, firm by 40 paisa at Rs.7.05 on 1.454m shares.
DEFAULTER COMPANIES: Shares of nine companies came in for trading, the most active among them being Mehran Jute, up 15 paisa at Rs.1.15 on 15,000 shares followed by Suzuki Motorcycles, higher 25 paisa at Rs.4.90 on 10,500 shares and Burma Oil, up Rs.1.40 at Rs.7.90 on 6,000 shares.