KARACHI, Sept 10: The post-Sept 11 Karachi bourse had many positive morale boosters including big rise in the market capitalization and the index level to be proud of, but not after absorbing initial shocks came in sympathy with the global markets.

But the bull honeymoon with the coveted index level of 2,000 point proved to be short-lived as bears fought back to get an upper hand, pushing it to close the pre-Sept 11 session at 1,962.00. Inflow of fresh funds was overshadowed by a wave of profit-selling.

The early reaction to the terrorist attack on the World Trade was terrible and led virtually to an imminent collapse of the market as the KSE 100-share index fell well over 125 points or 7 per cent to 1,133.44 points from 1,258.44 a month earlier and the market capitalization to Rs.285 billion from the previous Rs.318 billion. There was confusion among the investors and no one could precisely decide how to react to the post-Sept 11 and the US-led coalition attack on Afghanistan.

However, the steady inflow of foreign aid, including restructuring of debt of about $15 billion by the US and other foreign donors and increase in textile import quotas by the European Commission and some other countries boosted the investors confidence.

The financial gains of president Bush’s demand of “with us or not” on Pakistan prior to attack on Afghanistan started filtering in the economic pipeline of the country as a reward of being a coalition partner of the US.

The stock market could hardly ignore the changing financial world around it and reflected buoyancy as liquid funds started pouring in from all sides including a steady inflow of foreign buying in selected shares.

The other supporting factors were the privatization of some mega companies including the sell-off of controlling shares of the United Bank to a Dubai- based consortium and offloading of ten per cent shares of National Bank and proposed disinvestment of its another five per cent shares in future.

Talk of sell-off of the oil giant PSO and the PTCL during the coming months has reinforced the investor perceptions about a robust future market and lure of capital appreciation is attracting investment from some informal quarters also.

“The KSE 100-share index soared about 50 per cent to the three-year peak level of above 2,000, lifting the market capitalization along with it to Rs.462 billion from last September’s Rs.285 billion, a befitting reaction to the changed world financial scenario,” a leading stock analyst commenting on the post-Sept 11 stock market performance said.

“Its onward journey beyond 2,000 index level now appears to be a bit smooth as bears will take quite some time to muster support to play a negative role in a market heading for a major breakthrough,” stock analysts said.

Although there was a galore of flotation of Term Finance Certificate by a dozen or odd leading companies, there was a relative quiet on the industrial front as shares of no new units were floated by any of the sponsors during the post-September trading year.