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Bull run keeps tempo on stock market

RECORDER REVIEW

KARACHI: The speculative forces at the stock market firmed their grip during the week under review and the index recorded a steady growth in anticipation of early release of funds by the international donor agencies.

An International Monetary Fund team is expected to arrive by middle of this month. They would present the summary before their board of directors in Washington by first week of next month.

The economic managers are expecting to get about $500 million from the IMF including the stalled funds of $280 million from the $1.56 billion credit line approved last year.

The KSE-100 index registered an increase of 50.36 to 1799.73 from 1749.37 last week. The volume amounted to 1.324 billion shares from 1.632 billion shares of previous week. The market capitalization denoted a rise of Rs 13.284 billion to Rs 458.361 billion during the week.

According to an analyst, some of the IPPs and companies, which are on the privatisation list, gathered momentum. The bull run kept its tempo because of the performance of high capitalisation individual stocks.

He said concentration of activity in a few stocks with declining volumes in second tier suggested that traders want to glue themselves to safer havens. But buying from speculators and bargain hunters delighted the small and retail groups, which entered the market, after taking cue from them.

PTCL recorded sharp increase during the week as the company announced its financial results for the six months ended Dec. 31, 1999. The company earned a net profit of Rs 8.630 billion while its total revenue improved by 51 percent.

Hubco was depressed as the company claimed that Wapda has failed to pay the general sales tax worth Rs 535 million while Hubco has already paid this tax to Pakistan State Oil company and the government. This has landed Hubco in a heavy financial loss.

However, traders and dealers were hopeful of an early settlement of Hubco and government dispute following the Dubai meeting of the company's board of directors and the high -evel meeting convened by the Chief Executive between Hubco's top brass and Wapda chairman. Some weak holders off-loaded their shares. The main reason for offloading was President Bill Clinton not including Pakistan in his South Asian itinerary.

However, this was totally ignored by the market men and with the infusion of funds from the financial institutions and some of the banks, the market retrieved from that shock and closed on positive mood.

Dealers and traders hoped that the market will maintain the forward thrust and the next target is 2,000.

A leading trader said that if the government and the privatisation commission fulfilled one of their obligations, selling shares of any state-run company on the given schedule, it would restored the confidence of local as well as foreign investors. They foresee that the index is likely to reach a high mark if no untoward incident happens such as change in the government.

The market during the week was up due to unabated buying in choice and heavyweight items. Broader market also followed suit as the gainers outnumbered the losers in nearly every session. The market outlook is positive.

However, the 1,852 level is a strong resistance for the market. Investors are waiting for a decision on President Clinton's visit to Pakistan. A positive decision would help the sentiment.

PTCL moved up to Rs 30.70 from Rs 29.35 on total business of 488.596 million shares, Hub Power showed a fall of 45 paisa to Rs 27.35 as around 370.106 million shares changed hands, ICI on a turnover of 134.391 million shares denoted a paltry price of five paisa to Rs 13.20, Fauji Fertlizer slipped by 35 paisa to Rs 64.45 on total deals of 46.806 million shares and Sui Northern Gas registered an appreciable increase of Rs 2.00 to Rs 21.20.