Bulls went berserk on the Karachi Stock Market on Thursday, when the bourse set several all-time high records: Highest ever single day turnover ; highest daily traded value of shares and the largest volume of business in any single stock.
Besides, the KSE index of 100 shares shot up 85.9 points to close at 2,637 points, which stood at just a stone's throw from the index's all time high level of 2661.34 points touched eight years ago on March 22, 1994.
The volume of shares traded on Thursday stood at 618 million shares, which was four times the average daily turnover of 153 million shares for all of 2002. Turnover in rupee terms (traded value) amounted to Rs25.7 billion, which was almost five times the year's average of Rs5.6 billion.
Share in the Independent Power Plant – Hub Power Company – recorded volume of 258 million shares, which was the largest ever business in a single day for any stock. A total of 248 stocks were gainers during the day, compared with 96 losers; another 58 shares closed at their previous values.
Many people wondered if there was a method in the bulls' madness? Most market players and analysts thought there was. With three trading sessions to go this year, there already was expectations in the air that the index would cross the previous best by the advent of the new year. But how high could it be expected to go? No one of course was dead sure.
But several analysts, including Iffat Zehra Mankani, head of research at IP Securities said that the bulls could be expected to carry on the charge all through the month of January on the back of fresh crop of corporate results that are due. These include full year results from banks and fertilizer sector as well as the interim figures from Hubco.
Giving the reason for the bullish fervour, stock strategists said that there definitely was surplus liquidity and too few avenues of investment.
Everyone agreed that average yield of 10-12 per cent offered by the blue chip stocks continue to be the most attractive, when compared with bank interest rates of less than 4 per cent; one-year T-Bill rates of 4.25 per cent; 10-year PIB bond rates at 5.7 per cent and the declining rates of return from National Savings Schemes, that now average at almost a single digit.
“Interest rates have not been that low in the last 55 years of country's economic and financial history,” said Mohammed Sohail, head of research at brokerage firm, InvestCap Securities. Market players said that it is seldom that everything is as right as is now: economic indicators are strong; political situation is stable and fundamentals of the stock market are sound.
Iffat Zehra at IP Securities said that according to her calculations, PTCL and Hubco which together constituted 40 per cent of the market, were giving an average yield of 12 per cent: PTCL 11-12 per cent and Hubco 13-14 per cent.
Some traders attributed the huge turnover of 258 million shares in Hubco to massive buying by a particular brokerage house, Global Securities-for clients in UAE and UK. While that could be the sign that Pakistani stocks were back on the radar of foreign investors, analysts agreed that more comforting was the fact that retail investors in droves were returning to the rings.
Abdullah Amin, analyst at Taurus Securities stated that the market had been able to build up a “momentum”, which could go on for another two years, unless absolutely negative unexpected local or outside events put a break.
Prominent gainers during the day were Unilever up by Rs62; Wyeth (Pakistan) higher by Rs30.
Losers were led by Siemens Engineering, which declined by Rs10 and Pakistan Refinery ending lower by Rs3.
Trading volume of 618 million shares was comfortably higher than its previous session's trading in 420 million shares.
After Hub Power, which topped the list of actives with price gain of Rs2.55 to end at Rs37.10, the next most briskly traded stock was PTCL, which gained Rs1.25 to Rs24.55 on 132 million shares.
FORWARD COUNTER: The speculative activity was concentrated in Hub Power which gained Rs2.58 to close at Rs37.08 on volume 18 million shares, followed by PTCL, which gained Rs1.25 to Rs24.50 on 17 million shares.
DEFAULTER COMPANIES: Thirteen stocks came up for trading on the defaulters' counter with major gain of Rs1.50 recorded in Metro Steel, which closed at Rs15.25.
DIVIDEND ANNOUNCEMENTS: Gadoon Textile recommended final cash dividend at 25 per cent for the year ended September 30, 2002; Ayesha Textile proposed cash at 15 per cent; Kohinoor Textile Mills a final cash dividend at 5 per cent; Maqbool Textile Mills final dividend at 7.50 per cent; Crescent Sugar cash at 15 per cent; Husein Industries cash at 45 per cent; Kohinoor Weaving cash at 20 per cent and bonus at 10 per cent.