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Stock market maintains upward trend

RECORDER REVIEW

KARACHI: The share market during the week maintained its rising tempo under the lead of PTCL and PSO as bulls dominated the proceedings with volume averaging 280 million per shares from last week's mark of 250 million shares.

The market during the week made two memorable landmarks in the history of Karachi Stock Exchange. After more than two-and-a-half year's period, the index crossed the 2000 mark while the market capitalisation soar above Rs 500 billion mark. The buyers were in abundance and present at every dip.

The selling pressure absorbed easily as both institutions and individual investors made a bee-line for the blue chips and under priced textile shares with high potential of growth and bright prospects of larger earnings and pay out gathered momentum.

During the week after a lapse of over two years, the ready board section was quite active with over 300 companies were called with fresh interest spilled over to second and third tier stocks.

The analysts linked the bull-run to the excess of hot money chasing limited floating stocks. There has been no new listing at the stock exchanges for over past couple of years. Hence, the rally simply reflects the demand surpassing supply. But the market pundits said that some of the fundamental changes and in hope of consistent policy and privatisation process restored the confidence of the investors. Still the foreign investors are at bay and not inclined to make fresh positions in the equity market.

The good cotton crop, better corporate performance, cut in the lending rates and renewed privatisation plan had boosted the stock values, a market pundit said.

The KSE-100 index gained 42.25 points to 1980.43 from 1938.17 of the last week. The volume amounted to 1.408 billion shares from 1.279 billion shares of the preceding week. The market capitalisation soared to Rs 504/974 billion from Rs 494.971 billion of a week ago.

The market during the week 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 which surfaced during the last two sessions of the week. But the buoyancy was their which can be gauged from the fact that the scrips from textile, leasing, modarabas, investment bank, sugar and some of the cement sector changed hands.

However, on Friday the index received heavy battering from bargain hunters and speculators, which booked profits. All the equities have reached attractive levels and were eligible or ripe for accumulate capital gains. The traders believe that the market might face correction of another 30 to 40 points before settling around 1900 mark.

The developments in the coming session would decide the future course of the market the most important being President Clinton's visit to Pakistan. Though he will not announce any new loans or ease sanctions for Pakistan, but the traders hope that his visit would be a morale booster and confirmation that the present government has been recognised by them.

The fall in the stock values at present is not worrying the traders and dealers as they opined that the downward correction is healthier for the market and weak hands which are in the rings without any enough liquidity would soon sell their holdings. The inherent sentiment is still strong as the selling pressure has not yet reached alarming proportions. After a slide of another 40 to 50 points a dealer said that the share market would soon recoup the losses.

PTCL on volume of 552.934 million shares recorded a rise of Rs 1.15 to Rs 32.65. ICI denoted an improvement of Rs 1.55 to Rs 14.15 as around 214.751 million shares changed hands, Hubco on a trading of 150.443 million shares moved down to Rs 27.70 from Rs 28.85, PSO on a business of 115.238 million shares closed at Rs 262.50, showing an increase of Rs 8.50 and Dhan Fibers finished at Rs 9.00, lower by 90 paisa on turnover of 64.637 million shares.