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2000-point level breached after 3 years

RECORDER REPORT

KARACHI: The KSE-100 index on Tuesday breached the coveted 2000-point level, after over three years, as local brokerage houses and financial institutions infused fresh liquidity into the market and placed hefty deals in fuel and energy and some of the textile scrips.

Arif Habib, Chairman, Karachi Stock Exchange (KSE), said that the index had crossed 2000 mark after over three years mainly because of rebuilding of local investors confidence. "The selling pressure of foreign fund houses has been absorbed easily and most of the buying surfaced from the local companies and retail investors," he added.

Arif pointed out that good cotton crop, better corporate performance, cut in the lending rates and renewed privatisation plan had boosted the stock values. "Time has come that the companies would sell their international purchase orders (IPOs) which would help induct foreign investment in the local stocks and would also improve foreign direct investment in the country," he added.

Anthony Mendes, of AMZ Securities, said that the market crossed the 2000 index amid joy, and the bulls had their tails up. The bears kept waiting most of the time for expected technical correction but the mood of the bulls kept them at bay, he said.

"Any lower levels in the pivotal shares provided an opportunity to the bulls to grab huge quantities. The buoyancy in the market can be gauged by the fact that the scrips like Sunflow Citruss, Dhan and other C and D grade shares have started to trade in significant quantity," Mendes said.

The KSE-100 index registered a rise of 28.36 points, or 1.44 percent, to 2004.00 from 1975.64 of Monday. The volume amounted to 352.358 million shares, against 233.141 million shares of Monday. The market capitalisation moved up to Rs 509.989 billion, from Rs 503.735 billion of Monday.

Mohammad Zubair Ellahi, of KAB Securities said that the index had crossed a major psychological barrier and this might bring in fresh local interest. The momentum generator was again privatisation process whereas index contributors were the high weightage stocks.

He said that high volumes in second tiers suggested switching of market focus, and the trend might intensify further. The broader term outlook still looked positive.

Faisal Abbas, of AHR Securities, said that finally the day came when the index surpassed the 2000 barrier, which was being anticipated for the last some sessions and market men were quite optimistic to achieve the target. Indeed, the bulls were playing the dominating role and the index remained in the plus zones throughout the session, he added.

He said that local institutions and DFIs continued their buying spree and were not willing to book the profit and, were rather preferring to bring more liquidity in the market. But unfortunately, the technical status was considered to be over-bought (1.8 percent per month). Hence, a correction of 50 points might he inevitable in the forthcoming session. Moreover, the impact of privatisation and resolution of IPPs issue had also been digested by the market and now the punters might not be willing to invest for long.

ICI during the session suffered a loss and depicted a dip of 40 paisa as the company announced its financial results for 1999. The company suffered a loss of Rs 3.81 billion. However, it recovered in the end because the loss was below the expectations of market punters and, according to them it might be in the range of Rs 4.0 billion to 4.75 billion.

According to one analyst, the company was expected to sell its PTA plant to a foreign company and might disinvest some of its shares. If this happened, there were chances that, in 2000 or 2001, the company might recoup some of its losses.

PTCL on a trading of 165.492 million shares gained 70 paisa to Rs 32.45, ICI on a volume of 58.364 million shares closed at Rs 14.00, higher by 70 paisa, Hub Power moved down to Rs 28.70 from Rs 28.75 as nearly 33.339 million shares changed hands, PSO on a turnover of 24.272 million shares closed at Rs 271.50, higher by 50 paisa; and Dhan Fibre on a business of 13.474 million shares moved up by Rs 11.10 from Rs 10.20.