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KSE index breaks pass 1700 mark

RECORDER REPORT

KARACHI: The share market on Wednesday broke the barrier of 1700 after almost 22 months as foreign buying in blue chips and investment stocks bloomed amid hectic activity in PTCL, ICI, PSO and Fauji.

The main factor behind this surge was the State Bank of Pakistan's decision to allow banks to repatriate dividend amounts to foreign fund house without prior approval from the central bank.

The SBP approval would rebuild foreign fund managers confidence, a leading analyst said. He added the government should completely lift all curbs and allow repatriation of sale proceeds to which would re-rate the Pakistan's stock market in the map of institutional investors.

A leading trader said foreign buying in succession rose in the stock market and UK-based financial institutions-Petrite Company and Roschild Ltd., entered the market in a big way and lifted sizeable shares in the choice scrips. Moreover, there was a selling pressure from the W. I Carr and Jardine Fleming on behalf of Morgan Stanley Fund. Large volumes of PTCL and Hubco were unloaded by these entities and according to the trader, selling volume was around 15 million shares.

However, the selling pressure was absorbed smoothly as buying from the foreign fund houses, financial institutions, leading brokerage houses and retail investors turned into a soft landing.

The KSE-100 index scored an increase of 58.28 points to 1718.37 from 1660.09 of Tuesday. The volume moved down to 369.445 million shares from 420.587 million shares of Tuesday. The market capitalization finished at Rs 437.687 billion, showing an increase of Rs 13.283 billion.

Mohammad Zubair Ellahi of KAB Securities said that the index has gained 25 percent during last seven sessions and the tempo is still running high. The strong focus on privatisation has accounted for this rally and regular inflow of related news might further enhance the momentum.

He added that the prevailing levels might appear on higher side but the changed macro environment has pushed the market base up. The broader term market outlook still appears to be positive but it is advisable to wait for dips.

Faisal Abbas of AHR Securities said the overall market momentum was quite bullish. The report regarding restoration of banks powers to remit forex paved the way for an ultimate bull run. Buying interest in the selected stocks such as PSO, Fauji, Shell and other active issues continued and subsequently the scrips registered fresh gains.

He added that the bears were checked although they moved in to square their short-sold positions, established in Tuesday's session, after observing a smart recovery in the initial stage of the first session.

Although, some selling pressure was witnessed in the middle of the second session, on account of a rumor regarding bomb blast in the city, since no confirmation was available, the market again started to recover sharply and closed on a very positive sign.

PTCL on a business of 151.638 million shares moved to Rs 29.35 from Rs 27.95, Hubco on a trading of 72.913 million shares shed 20 paisa to Rs 25.75, ICI on a volume of 28.134 million shares recorded a rise of 55 paisa to Rs 12.55, PSO on a turnover of 17.027 million shares closed at Rs 230.50, higher by Rs 8.80 and Dhan Fiber gained 65 paisa to Rs 9.85 as 14.964 million shares changed hands.