Bulls dominate KSE

Bulls took charge at KSE during last week, fuelled by the extraordinary result announcement by the telecom sector giant, PTCL, whereas activity surfaced in OGDC and other oil exploration stocks on back of record high global oil prices. The KSE-100 Index witnessed a rise of 3.25 percent to close at 5245.82 points from 5080.67. Average daily volumes also increased by 64.33 percent to 317.75 million shares. Clariant Pak, Shakarganj Sugar, Security Paper, Colgate Palmolive, and OGDC were the major gainers while Lakson Tobacco, Siemens Engineering, Prime Commercial Bank, Bata (Pakistan), and Sitara Chemical were major losers at the KSE.
The KSE-100 Index started the week with a 44-point gain, driven by aggressive buying in PTCL (PTC-PkR44.20) on rumours of impressive FY04 result announcement. However, Tuesday witnessed range-bound trading and the index could gain only 3 points on the day, closing at 5128 points.
Trading volume remained above 200 million mark--253 million shares for the day. The primary drivers were expectations of a possible upward revision in domestic oil prices and better results expectations of PTCL.
Market enthusiasm peaked on Wednesday where volume inflated to 378 million shares. The bullish momentum started picking up pace where PTCL alone traded more than half of the day's total volume. The market closed at 5196 points, up 68 points.
Thursday was another very active day with turnover standing just 8 million below its previous level at 370 million. The KSE-100 gained another 21 points and closed at 5218 points. Trading activity was high and broad-based. Trading volume remained above 300 million shares for the third consecutive day at 316 million shares. The KSE-100 index closed 28 points above its previous level at 5246 points. The punters jumped into E&P scrips as they are the primary beneficiaries of higher international oil prices.
PTCL results definitely changed the overall sentiment of the market. However, the stock on a stand-alone cannot continue to drive the market for long. Going forward oil stocks may be foreseen to take the mantle, as international oil prices have recommenced their upward drive, breaking the $50 per barrel (WTI) mark. E&P companies should be the primary beneficiaries followed by OMCs. On the flip side, oil consuming sectors like Airlines, PSF and Cement may have negative implications on their bottom line as they will have problems in passing on the additional cost to final consumers.
The KSE-100 Index managed to recover majority of the losses witnessed during the first three weeks of September and continues to remain strong. Market volumes have also improved, though a continued bull-run from here would require further build-up in volumes. The KSE-100 Index has risen by 7.3 percent (356 points) from its low of 4890 recorded on September 22.
The market is likely to take some breather during the coming week. On overall basis, the market is expected to remain in a consolidation phase during the next week. Investors may be advised to stick to the core stocks of the Index, which include OGDC, PTCL, PSO, FFC and SNGPL.