The share market during last week maintained the winning streak for the seventh week in a row as some analysts believed that corporate results and rising economic activity was attracting fresh buying in investment and trading stocks.
The seesaw week eventually added 46 points to the benchmark KSE-100 index in the week, closing at 8226 points and proving the 8300 level to be a major resistance.
Average volumes during the week were lower than the previous week, but were well above 300 million level, portraying a significant amount of liquidity available in the market.
Leverage statistics through CFS increased slightly, whereas spreads on October futures remained quite attractive with September futures maturing on Friday.
The Index maintained its upward momentum during the week within a measured range. On the last day of trading the market ended at 8226, closing above the 8200 psychological barrier, which was breached on the first day of the week at 8217, but could not sustain until the end of the week.
PTCL remained in the limelight throughout the week as investors anticipated a positive outcome of its privatisation process. Activity was observed in all sectors due to expectations of good announcements, particularly in the banking sector. The two hurricanes hitting the US pushed oil prices up to critical levels and OCAC revised its prices upwards, with Mogas going up by Rs 3.68 per litre at Rs 56.29.
Traders at Atlas Investment Bank expected that the index would gain momentum this week because of activity expected in OMCs and the SECP was forming a committee to recommend alternatives to CFS as more liquidity is required by investors.
Market sentiment swayed with PTCL results and rumours regarding the privatisation deal with Etisalat.
The market opened on a positive note on Monday, based on expectations of a higher dividend payout by PTCL and SECP's decision to disallow broker-to-broker deals.
However, PTCL's decision to skip dividend dampened the positive sentiment and downward pressure in the market was seen.
On Thursday, rumours regarding a possible backout by Etisalat from the PTCL deal dragged the market down. However, the market reacted positively on Friday to the statement by Etisalat that PTCL deal was still intact.
An analyst from KASB Equities said that the market would remain sensitive to any news regarding the Etisalat-PTCL deal. Some quarters have taken the skipping of PTCL dividend as positive for the privatisation deal. "However, any statement from either Etisalat or the Privatisation Commission would drive the market sentiment and a major spillover effect on other stocks is expected. We advise our investors to go long in fundamentally strong scrips. Our top picks remain POL, Callmate Telips, Fauji Bin Qasim, National Bank and Packages."
An analyst from Alfalah Securities said that PTCL so far had not affected the market to a great extent, and positive sentiment in other stocks had been improving the index. Although PTCL did try to pressurise the index, it was compensated by handsome upsides in banking, cement and oil sectors. "Keeping in view the prevailing sentiments, we see an upside. However, direction of the market will also depend on the way PTCL issue is resolved. While the issue is resolved, we do not expect any negative news next week. However one should keep in mind that stock prices are getting closer to their fair values. So, there may be a deck on this progression once there has been an upside of another 2 to 3 percent. Our picks for week are Lucky Cement, NBP, SNGPL, Picic and UNBL."
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