ISE witnesses extraordinary bullish rally

Islamabad Stock Exchange (ISE) witnessed extraordinary bullish rally last week where small and medium investors of Islamabad and Rawalpindi injected fresh investment in all leading sectors. ISE Network index fluctuated between 14,687.01 and 14,990.71 points last week. The market recorded a significant growth on the back of privatisation progress and expectation of good profits. Energy and gas sector showed extraordinary performance due to ongoing privatisation process.
The record breaking spree continued throughout last week where profit seekers and short-term margin hunters remained active to book profits. Market sentiment signalled a bullish trend. Trading volumes remained high and the ISE index, under the strength of lead shares, gained 303.70 points. The overall turnover ranged from 35,77,500 to 73,23,700 shares showing increase in buying and selling of stocks.
The major event in the history of ISE last week was the address of Prime Minister Shaukat Aziz after performing foundation-stone laying ceremony of the 19-storey 'Islamabad Stock Exchange Towers'. The ceremony was attended by leading businessmen and investors from Karachi, Lahore and Islamabad, which boosted confidence of local investors, particularly smaller ones and cautious traders. Local investors were happy over the interest being taken by the head of the government in promoting business activities in the country for creation of more job opportunities for the unemployed youth.
The Prime Minister said that the project of Islamabad Stock Exchange Towers was a true symbol of progress for all Pakistanis to see professionally well-equipped place for stock exchange in the federal capital. This also encouraged the business community and investors to participate in buying and selling activities at the youngest bourse of the country.
Market analysts said that during the week ISE-Network index followed an upbeat trend. On Monday, the market opened with some uncertainty pertaining to OGDC future outlook, owing to its below market earning expectation for first half years. With no major announcements expected this week, market sentiment was basically depending upon privatisation related news. However, selling pressure was observed due to higher badla rates and continued upbeat market trend. However, the technical correction took place after 17 consecutive sessions.
On Tuesday, market sentiment remained high owing to privatisation related news of PSO, and other oil stocks followed suit and posted gains. The investors of the twin cities also focused on OGDC, which gained Rs 4.95 to close at Rs 122.50.
On Wednesday, the market behaved wildly and recorded an intra-day technical correction of reasonable points. The bearish trend witnessed on Wednesday was mainly on two counts: (1) PC's decision to extend date for PSO expression of interest from March 4 to March 31; and (2) rumour regarding cement cartel break-up.
On Thursday, the market turned the other way round and witnessed sharp gain. Again, oil stocks led the index to show extraordinary increase. ISE Network index registered highest single-session again following active participation from the financial institutions and leading investors.
On Friday, yet again the market witnessed sharp gain, led by oil and banking stocks. On the whole, KSE-100 index gained 508 points during the week.
Commenting on the outlook for the future, analysts believed that the market would follow its recent trend of outstanding gains in the next week. Again oil stocks are expected to remain the focus of investors. However, news related to NIT privatisation would trigger the banking stocks. "Keeping in mind huge intra-day corrections, we are advising our investors to keep their exposure at lower helm to avoid huge intra-day correction."
However, analyst believe that most of fertiliser stocks have already reached their fair value. They also believe that the cement sector will remain quiet in the next week. In sum, the market is likely to maintain its bull-run but would remain volatile.
A number of major developments took place during the week on the economic front, Sui Northern Gas Pipelines Limited (SNGPL) announced its results, posting after-tax profits?
According to the data released by State Bank of Pakistan (SBP), total private sector credit off-take was recorded at Rs 7.48 billion, from January 5 to February 12.
India intends to bypass Pakistan whilst carrying out the proposed gas pipeline from Iran. Oil Companies Advisory Committee (OCAC) announced an upward revision in petroleum production prices.
According to ICI briefing, debottlenecking and expansion of their existing PSF line is to increase ICI's production by 10,000tpa by April, 2006.
The Indian petroleum minister stated that India would be seeking tough terms for the proposed Iran-Pakistan-India gas pipeline?
Minister of Industries and Production stated that two international car manufacturing companies, namely Audi and Rino, are keen to set up their production plants in Pakistan?
As per the statement released by APCMA, cement manufacturers would increase prices in line with the increase in input prices.
Trade deficit was recorded at $2.88 billion in the first seven months of current fiscal year.
According to the proposed mechanism, NIT is to be sliced into five units, out of which two would be given to the banks who have major holding of NIT units, while the remaining three would be privatised.
As per the statement released by Privatisation Commission, 10 parties might be pre-qualified for the privatisation of PTCL.
The investors and traders considered these news during the last week's trading sessions, analysts added.