KARACHI, Oct 24: Near-boom conditions prevailed on the stock market on Thursday as investors were not inclined to take even a technical breather and continued to build-up long positions ahead of PSO board meeting.
The KSE-100 index missed the prestigious level of 2,200 just by six points at 2,194.28 but the market capitalization soared by Rs9.226 billion to hit the coveted level of Rs501 billion, the all-time highest recorded figures for the both being 2,610.00 points and Rs610 billion, hit during the March and July boom in 1994.
Whether or not it is warranted by the developing post-election political standoff and one may like it or not, the boom is there, brokers said who is indulging in speculative operations and why will be known during the next couple of sessions when the market opts to meet its technical demands.
An idea of terribly broad-based buying may well be had from the fact that the KSE-100 share index narrowly missed its next chart point of 2,200 points on renewed short-covering in blue chips fuelled by expectations of interim dividend.
It finally finished at 2,194.28 as compared to 2,168.82 a day earlier, up 25.46 points as the PSO-led buying euphoria both in the ready and the forward counters remained unsatisfied till the closing bell.
Although the index has about doubled during the last one year, a credible performance in the backdrop of some unfavourable events including Afghan war, it is still far away from its all-time peak level of 2,661.00 points established in March 1994.
“I could not precisely decide how I should call the market's current sustained forward thrust”, says a leading stock analyst “corporate announcements are fairly encouraging but certainly do not match the current index level”.
Higher corporate earnings do generate short-term speculative buying but not at the scale being witnessed during the post-election sessions.
“No one could deny the fact that local political events, notably uncertainty triggers panic selling rather than long-term buying”, says a leading broker “some one or a combine appears to be behind the current run-up based on a short-term strategy”.
Some other brokers also hold the same view and say it could be speculative rise fraught with high risks as the post-election standoff among the political parties about the formation of governments at the centre and the provinces owing to spilt mandate could mean any thing to the market.
However, the market both in terms of volume and big gains reflects near-boom conditions reminiscent of mid-90s during the second Bhutto regime when the private sector was allowed free hand and portfolio and industrial investment were at their peak. More than 100 new companies were floated each year at that time.
As the market has already digested the corporate results of Hub-Power, PSO board meeting on Oct 28, and market talk of bonus shares are fuelling the current speculative buying in it.
Plus signs again dominated the list under the lead of Central Insurance, Treet Corporation, Unilever, Fateh Textiles and Pakistan Reinsurance Co, which posted gains ranging from Rs4.50 to Rs93.60. Other good gainers were led by MCB, Artistic Denim, Husein Industries, Crescent Steel, Dawood Hercules and Aventis Pharma, which rose by Rs2.20 to Rs3.40.
Losers were led by National Refinery, Shafiq Textiles, Siemens Pakistan, IGI Insurance and Wyeth Pakistan, off Rs1.25 to Rs30.
Trading volume rose to 297m shares from the previous 275m shares as gainers held a strong lead over the losers at 219 to 99, with 60 shares holding on to the last levels.
PTCL topped the list of most actives, unchanged at Rs20.65 on 39m shares followed by PSO, higher by Rs1.70 at Rs176.20 on 28m shares, FFC-Jordan Fertilizer firm by 40 paisa at Rs7.60 on 25m shares, Hub-Power, steady five paisa at Rs24.80 on 22m shares and MCB, higher by Rs2.20 at Rs32.15 on 22m shares.
Other actives were led by National Bank, higher by 60 paisa at Rs25.20 on 20m shares, Pak PTA, steady five paisa on 16m shares, Engro Chemical, higher by Rs1.65 on 16m shares, Dewan Salman, up by 65 paisa on 13m shares and Sui Northern, higher by 30 paisa on 11m shares.
FORWARD COUNTER: Unlike the previous sessions, speculative buying on the cleared list was not that aggressive, although PSO again led the list. It rose further by Rs1.90 at Rs176.10 on 7m shares followed by Hub-Power, up 12 paisa at Rs24.82 on 3m shares and PTCL, firm by five paisa at Rs20.60 on 2m shares. Engro Chemical and FFC-Jordan followed them but were traded modestly.
DEFAULTER COMPANIES: Active trading was again witnessed on this counter where Allied Motors again came in for active short-covering and finished higher by 60 paisa at Rs12.10 on 26,500 shares followed by Suzuki Motorcycles, steady five paisa at Rs2.40 on 19,500 shares and Quice Foods, up also by the same amount at Rs1.85 on 15,500 shares.