20000222

KSE capitalisation

crosses Rs 500 bn mark

RECORDER REPORT

KARACHI: Bulls rode the wagon on Monday where all investment and trading stocks soared sharply as market capitalisation, after more than three years, crossed the Rs 500 billion mark.

Local buyers were in the ring and it appeared that the index might see the 2000 points level even before the end of the week. This level would be the high mark of the past over three years.

The rally was led by PTCL, PSO, Sui Northern Gas, Fauji and companies from the textile sector. The improvement in the textile and related scrips was a good omen for the market because out of 764 companies about 30 percent scrips belong to this sector. The increase in cotton production and slight improvement in the international market prices helped the share prices of textile companies to improve in the last couple of weeks.

The KSE-100 index rose by 37.46 points, or 1.93 percent, to 1975.64 points, from 1938.17 of Friday. The volume amounted to 233.141 million shares, against 251.232 million shares of Friday. Market capitalisation moved up to Rs 503.735 billion from Rs 495.025 billion of Friday.

An analyst from Westminster and Eastern Services Ltd said that despite strike call for Tuesday (February 22) by JSQM, which was supported by MQM and the deteriorating diplomatic relationship between India and Pakistan, the sentiment in the ring did not change as the bulls successfully encountered another rally, mainly on the back of PSO, Shell, PTC and Hubco. The market, however, witnessed some profit-taking in the later session, but not good enough to change the bullish sentiment.

He said that the KSE index was in a bullish territory, but in an overbought zone. He advised the clients to accumulate profit on short-term portfolio on strength as overdue technical correction could choke the current rally.

Mohammad Zubair Ellahi, of KAB Securities, said that the surge on privatisation reports was still on and this might push the index to new highs. The activity in second tiers, too, was slowly picking up making room for a broad market movement. The current bullish tempo might gain further momentum, but profit realisation was important.

Faisal Abbas, of AHR Securities, said that buying interest in the ready board items prevailed and fresh investment continued, especially in some blue-chip stocks like PSO, ICI, Fauji and Engro Chemicals.

He said that despite placement at the 'spot trading', Sui Northern, PSO, Nishat and Engro were in demand and all of them registered fresh gains, while PSO's growth was outstanding, where bears' panicky short-covering was, perhaps, also one of the reasons.

Bulls dominated the overall trading scenario and the improvement was quite apparent in most of the issues, including active, blue-chips and other textile items, which were available on quite lucrative price levels. The textile sector was helping the overall market sentiment to register growth on account of bumper cotton crop and expectations of revival of this sector, after a long time.

PTCL on trading of 63.151 million shares gained 25 paisa to Rs 31.75, Hub Power moved down to Rs 28.75 from Rs 28.85 as nearly 33.606 million shares changed hands. ICI on a volume of 31.479 million shares closed at Rs 13.30, higher by 70 paisa, PSO on a turnover of 28.698 million shares closed at Rs 271.00, higher by Rs 17.00 and Fauji on a business of 12.216 million shares moved up by Rs 65.35 from Rs 63.25.