Despite an awfully weak opening, the share market later managed to finish fully recovered from early week’s three per cent plunge triggered by panic selling owing to tension in relations with the US and threat of operational steps in Pakistan on the alleged Haqqani Network.
The benchmark build up a strong rally at the debris and attained a further high of 155.11 points at 11,762 for the third consecutive week, adding another Rs131 billion to the market capital at Rs3,104 billion.
What seemed to have aggravated the situation was a tough stand taken by Pakistan on Gen Mullen’s allegations at the all-party conference (APC), denying alleged links with the Haqqani network.
The steps taken by the government, notably the APC, post-US threat, reinforced investor’s perceptions that the political leadership was united and had endorsed its decision.
What seem to have buoyed investors were the reports of US government and army perceptions about some of the issues after Washington refused to endorse Gen Mullen’s allegations, some analysts said.
“The blame game is now back in the US between the Obama administration and the army,” they said. “Investors were pretty sure that the US threat may now have no relevance to ground realities,” they added.
And that perception followed a spate of fresh orders at the attractively lower levels, notably on blue chips counter, pushing the market back on the rails.
The other supporting positive factor was the Saudi entry to defuse the tension hinting investors that that the blame game could end any time.
The KSE 100-share index again rose sharply higher and demonstrated in more than one ways its inherent strength and was last quoted at 11,761.97 up 155.11 points as compared to 11,606.86 points last week.
The bulk selling was confined to oil sector and reflected the temporary exit of foreign investors, of course, after taking profits at the inflated levels owing to last couple of weeks’ sustained rise, he said.
“As the media reports go, an imminent showdown with the US is around,” said a leading stock analyst Ahsan Mehanti. “But some deeper analysis of the developing situation tells that things will settle down in coming weeks,” he added.
“It may well prove in the final analysis a psychological depressant as the message from the Pakistan government is clear on the issue of Haqqani network.
Another leading analyst Samar Iqbal said opinions are, however, divided over the possible US action but investors, mainly foreigners, hastened to liquidate a part of their holdings at the available margins but there were buyers at the dips.
Future contracts: Speculative issues recovered with the same speed as did they fell earlier, active among them being Fauji Fertiliser Bin Qasim, Nationl Bank, Engro Corporation and Lucky Cement, that entered later, was also traded higher on reports of higher first quarter earnings.
D. G. Khan Cement, which has been under pressure for the last couple of sessions, also came in for active support though rose modestly. Fatima Fertiliser also ended on the higher side despite late week profit-selling and so did some others, notably Pakistan Oilfields and Attock Petroleum.
The notable feature of the week’s trading was heavy turnover in Engro Corporation, Fauji Fertiliser Bin Qasim, National bank and D. G. Khan Cement.
—Muhammad Aslam