DESPITE couple of disruptions caused by external factors, the stocks remained in a cheerful mood and mostly finished with the extended gains, amid active trading.
The KSE 100-share index stood above the barrier of 2,000 points at 2,028.39, after hitting the peak of 2,040.00 points and added about Rs2 billion to the market capitalization at Rs465.314 billion.
The mid-week war threat by India, and the US Congress approval of President Bush’s Iraq policy including a possible attack, however, jolted the investor-confidence in a sustained pre- election run-up but status quo was finally maintained.
The air attacks on Iraqi military targets by the US could shake major world stock markets, and so do the Indian on Pakistan, as had been threatened by the India’s top minister.
The KSE 100-share index, however, managed to finish above the psychological barrier of 2,000 points at 2,028.39 points, despite a repeated bear onslaught to push it below this level.
A virtual galore of encouraging dividend announcements and the rumours of an early sell-off of the oil giant Pakistan State Oil (PSO) reinforced the investor-perceptions about a sustained bull- run, both in pre and post-elections trading sessions. A cash dividend of 50 per cent and bonus shares at the rate of 250 per cent by the General Tyre for the year ended June 30, speaks of rate of payouts and their positive impact on stock trading.
Never, before, the leading corporate sector listed companies have been so liberal to share profits with their shareholders as they did during the current financial year. Some of the dividends were all-time records.
“The market’s journey to undisclosed trading system was smooth and the next week’s trading will show how those who are manning will find it in the final analysis”, one broker says.
By next Monday, the KSE will opt for new trading system known in the western world as the “undisclosed trading system”. Under it the names of counter-parties and participants are not disclosed in a bid to discourage, what the newly appointed MD of the KSE calls the “herd culture” and to make transactions more transparent.
A cash dividend at the rate of 27.5 per cent on the after tax of Rs20 billion, and the annual revenue of about Rs67 billion (previous Rs62 billion) for the year ended June 30, by the communication giant, the Pakistan Telecommunications (PTCL) was well-received in the market as was reflected by the initial buying in most of the blue chips but late selling in it and the Hub-Power slowed down the run-up.
The PTCL’s payout is in line with the investor-expectations and should have boosted the market to new highs in normal conditions but it came in the backdrop of fresh US bombing on some Iraqi airports and the renewed tension on the Indo-Pak borders”, analysts said.
The annual profit projections and sales were also according to analysts’ predictions, although some of them were predicting a higher dividend at the rate of 35 per cent. Leading energy shares also rose sharply on active support ahead of the revision of fortnightly petroleum prices.
There was a galore of dividend announcements, some of them being on higher side, which evoked a good bit of buying interest, notably on those counters to which they belong, but late selling caused by the worries over the developing border situation worked against the sentiment.
War with India in the wake of tension created by the India temple killings may not be around, the renewed war-like activity on borders certainly worries most of the leading investors, they added.
The KSE 100-share index early jumped up to week’s peak level of 2,040 points on strong anticipatory buying in the PTCL earlier, but toward the close retailers moved in, and pushed it down to close around 2,018.75 points reflecting that it is inclined to stay above the barrier at least until the elections.
It seems it has established the figure of 2,000 points, its new support level after consolidating beyond 1,900 points last month, and intends to resume its upward journey from here.
Above-the-market dividend announced over the last couple of weeks has altogether changed the investor-perception about the future market outlook and if all goes well in the post-election political scenario and calm on the borders with India, the index could scale fresh highs, brokers predict.
There could be a brief pre-election interruption in the market’s current upward drive but most analysts rule out the possibility of any big shake-out owing to positive corporate scenario.
Plus signs dominated the list under the lead of the Central Insurance, the Sapphire Fibre, the National Refinery, the Pakistan Oilfields, the Shell Pakistan, the General Tyre, the Glaxo-Wellcome, the Wyeth Pakistan, the Reckitt and Benckiser, the Mitchell’s Fruits, the Noon Pakistan, the Treet Corporation and several others under the lead of cement and energy sectors.
Losers were led by the 9th ICP, the Abbott Lab, the Ferozsons Lab, the Noon Sugar, the Nestle MilkPak, the Dawood Hercules, the Bata Pakistan, the HinoPak Motors, the Siemens Pakistan, the Grays of Cambridge and the Wyeth Pakistan.
Trading volume showed a modest contraction at 601 million shares from the previous 685 million shares owing to the absence of leading sellers who kept to sidelines, anticipating further increase in the prices.
The PSO led the list of most actives amid alternate bouts of buying and selling, followed by the conflicting reports about the bidding for its sell-off. The PTCL, the Hub-Power, the MCB, the Adamjee Insurance, the Engro Chemical, the Fauji Fertiliser, the ICI Pakistan, the ICI SEMF, the National Bank, the Maple Leaf, the D.G.Khan Cement, the Attock Cement, Dewan Salman and the Sui Northern followed them.
FORWARD COUNTER: Bulk of the activity remained confined to the PSO and the Hub-Power, which finally managed to finish higher after the mid-week sell-off. The PTCL, the MCB, the ICI Pakistan, the Fauji Fertiliser and the Engro Chemical and Dewan Salman were also actively traded.—Muhammad Aslam