Despite mid-week tactical interruption, stocks maintained an uppish leaning during the preceding week as investors were not inclined to miss the rising market not literally deterred by conflicting reports from the Iraq war front.
Perceptions of higher corporate announcements by some of the leading companies, including hub-Power and the approaching disinvestment date of the PSO continued to inspire fresh covering purchases across-the-board.
The investor buoyant mood was also well-reflected in further increase of about five per cent in the KSE index and a rise of Rs20 billion in the market capitalization to a record level of Rs622 billion.
Post-Iraq war worries were there and so was the terrible breakdown of the KSE computer network, but snap rally at the fag- end of the week has raised hopes that market’s current upward journey could be maintained uninterrupted during the next weeks also.
The reported fall of Baghdad, the cradle of many civilizations, for the third time during the last 15 centuries and its likely impact on the Muslim world has its toll earlier, although there was no either-way violent reaction to the disturbing reports.
The post-Saddam Iraq may not have relevance to the local stock trading as it had already absorbed its fall-out, one thing appears certain that investors may not follow the lead of the foreign bourses and rely mostly on the positive local fundamentals.
The threat of pre-emptive attack from India on the pattern of Iraq and heating up of the local political scenario on the issue of LFO and rigid positions taken by the contenders of power also worked against the sentiment.
The KSE 100-share index posted a fresh gain of 92.44 points at 2,870.71 as all the leading base shares showed further gains, pushing the total market capitalization to a record high of Rs623 billion, bettering its previous all-time peak level of about Rs611 billion established early this year.
The PSO again remained in the limelight owing to some positive developments on its privatization front amid hopes that the deadline of April 26, may be judiciously maintained.
But what seems to have intensified the prevailing bull-run was above market expectations dividend at 12.5 per cent cash plus 10 per cent bonus by the management of National Bank of Pakistan. Its share posted a sharp gain at Rs28.30 on 16 million shares after the announcement.
The payout by the National Bank was said to be well beyond the analysts predictions as it seeks to convey the message to investors the major change that has taken place in the banking sector.
“In the backdrop of falling interest rate incomes and private sector credit demand, we never expect such an outstanding performance from the Pakistan’s premier bank,” most brokers say while commenting on the financial performance of the National Bank.
An identical performance by the other major banks, including the Habib Bank, the United Bank and the Muslim Commercial Bank could further accelerate the current market run-up.
Having massive surplus liquidity in their coffers in the absence of an adequate corporate sector credit demand, banks and financial institutions have been one of the major players on the country’s stock market for the last about four months and had provided the needed depth to the market.
“The National Bank performance may not necessarily reflect in part the massive capital gains cornered by many others after participating in the share business as it has varied income channels, but analysts speculate and did not rule out the possibility of such windfalls.”
Analysts said the news from the corporate sector were expected to give the needed support to the stock trading as the upcoming corporate announcements may also be above the market expectations.
The PIAC, which has been a losing concern for the last couple of years, has already turned the corner after earning post-tax profit of Rs1.87 billion for the last year, though it passed over the dividend.
The PSO also continued to attract fresh support ahead of its sell-off date on April 26 and rose to Rs218, net rise over the last couple of sessions being Rs20.
Floor brokers said investors were now mostly responding to local positive developments and are not inclined to follow the conflicting reports from the Iraq war and their impact on the local trading.
Plus signs again dominated the list under the lead of the Unilever Pakistan, the PSO, the Dawood Hercules, the Pakistan Reinsurance Company and the Wyeth Pakistan followed by the Noon Sugar, the Shahtaj Sugar, the Pakistan Refinery, the Arif Habib Securities, the Al-Ghazi, the Shell Pakistan, the Gillette Pakistan, the Colgate Pakistan, the Gatron Industries, the Clariant Pakistan and the National Refinery. There were many others, which also rose. Losses on the other hand were mostly fractional barring the Javed Omer, the Mari Gas, the Quetta Textiles, the Bhanero Textiles, the Nestle MilkPak and some others, including the BOC Pakistan, the Javed Omer, the Sapphire and the Gulistan Textiles.
Trading volume was maintained well above the 1 billion share mark at 1.080 billion shares as most current favourites were again actively traded amid alternate bouts of buying and selling.
The Hub-Power, the PTCL, the Sui Northern Gas and the FFC- Jordan Fertiliser together shared 70 per cent of the total volume followed by the National Bank, the Pakistan PTA, the PSO, the PIAC, the ICP-SEMF, the Bosicor Pakistan, the D.G. Khan Cement, the ICI Pakistan, the Pakistan Oilfields, the Adamjee Insurance, the Dewan Motors, the Engro Chemical and several others.
FORWARD COUNTER: The PSO encountered alternate bouts of buying and selling followed by conflicting reports about its sell-off deadline. But on-balance it ended higher at Rs213.50. The Hub- Power also followed it but gain was fractional and so did the PTCL, up 40 paisa.
Other actives, notably the Sui Northern Gas, the FFC-Jordan Fertiliser, the Pak PTA, the Engro Chemical, the MCB and the Nishat Mills also finished with modest rallies.—Muhammad Aslam.