KSE flying high

The Karachi share market witnessed a broad-based rally during the outgoing week ended May 25, 2007 and the benchmark KSE-100 index closed at its highest ever level of 12,732.41 points level on the week-end with a net gain of 392 points on week-on-week basis.
The upward trend at the share market remained continued during the week on the back of strong fundamentals, political stability, fresh buying by foreign investors and the local institutional and retail investors' support.
On the other hand, the parallel free float market capitalisation-based KSE-30 index gained 609.86 points on week-on-week basis to close at 15,897.09 points level, which was its highest ever closing level in its history after its launching on September 1, 2006.
The market witnessed healthy trading activity during the week as the average daily volume of ready market increased to 262 million shares as compared to 227 million shares during the previous week. The average daily turnover of futures market also increased to 67.50 million shares against 48.79 million shares changed hands during the a week earlier. The overall market capitalisation reached Rs 3.712 trillion at the week-end.
The start of the week was negative due to uncertainty on political front and declining portfolio investment at the equity market. The KSE-100 index lost 57.19 points and closed at 12,283.23 points level on Monday. Ready market volume declined to 128.795 million shares and futures market turnover decreased to 30.826 million shares while the overall market capitalisation declined to Rs 3.580 trillion.
On Tuesday, the market witnessed a broad-based rally and the KSE-100 index after breaching through 12,300 and 12,400 levels finally closed at 12,436.19 points level with a net gain of 152.96 points on the back of renewed buying both by foreign investors and the local institutions. The ready market volume increased to 216.855 million shares and futures market turnover surged to 53.139 million shares, while the overall market capitalisation increased to Rs 3.626 trillion.
The broad-based rally remained continue on Wednesday on the back of foreign and institutional support and the KSE-100 index finally closed at 12,496.17 points level with a gain of 59.98 points. The ready market volume increased to 222.683 million shares and the futures market turnover increased to 60.601 million shares, while the overall market capitalisation surged to Rs 3.642 trillion.
On Thursday, the KSE-100 index reached its highest ever level of 12,673.84 intra-day high, however, finally settled at its new record highest ever level of 12,663.41 points with net gain of 167.24 points.
Earlier, the KSE-100 index all-time high record was 12,512.08 points level which it made on May 4, 2007. The ready market volume increased to 332.825 million shares and the futures market turnover increased to 88.748 million shares while the overall market capitalisation surged to Rs 3.694 trillion.
The broad-based rally remained continued till the week-end session and the KSE-100 index for the first time in its history crossed the 12,700 points on Friday and closed at new high level of 12,732.41 points with a gain of 69.00 points on the back of fresh buying by foreign and retail investors, and political stability and increasing oil prices in the international market. The KSE-100 index also hit new high level of 12,784.74 points intra-day high.
The ready market volume increased to 410.311 million shares and the future market turnover increased to 104.201 million shares while the overall market capitalisation surged to Rs 3.712 trillion.
Farhan Aziz Khan, an analyst at JS Global Capital Limited, said that all the key listed sectors performed well during the week. Expected positive budgetary measures remained the prime catalyst of buying spree in banking, insurance and textile stocks. Similarly, discovery news in index heavy weight OGDC created investors' interest in the stock.
The news of rise in cement prices supported cement stocks while mergers and acquisitions activities finally awakened the telecom sector from a long slumber. Clouds of political uncertainty started dissipating after the government's negotiations with opposition parties resulted in strike call off. Moreover, oversubscription of $750 million Eurobond issued by the government showed growing confidence of foreign investors in Pakistan economy, which further strengthened positive market sentiments.
Mohammad Ali at Invest Capital and Securities Limited said the top gainers, on week-on-week basis were woolen, paper & board and cable & electrical goods that showed an increase of 19 percent, 11 percent and 9 percent, respectively while the major losers were vanaspati & allied industries, modarabas and leather & tanneries which posted decline of around 2 percent, 2 percent, and 0.6 percent respectively. The heavy weight market scrips from E&P, banking, fertiliser and cement sectors recorded an increase of 2.4 percent, 4.7 percent, 1.5 percent and 2.5 percent, respectively.
Jawwad Haleem at Atlas Capital Markets said that buying activity was observed in all major blue chip stocks due to flow of positive news regarding budget 2007-08 proposals to the government pertaining to every major sector. Oil and gas sector performed well owing to hike in the oil prices in the international market, reaching nine months high level of $71 per barrel.
Besides this, oil and gas discovery made by OGDC in Thora Deep Well and approval of new petroleum policy in next 15 days also supported the upward movement of the sector. The cement sector was also in the limelight as a result of a planned Rs 549 billion PSDP programme for the budget and Rs 10 per bag increase in prices in cement by local manufacturers.