The share market for the eighth consecutive week last week closed in the positive zone on the back of fresh buying registered in banking, gas and telecom sectors and the index was near nine-month high level.
The KSE-100 index at the end of Friday session closed above the crucial level of 9500 at a near nine-month high of 9515, up 83 points or 0.9 percent, from 9432 of previous week. The market at one point in time briefly crossed the 9600 level. However, average daily trading volumes fell drastically during the week by 25 percent, to 349 million shares, from 463 million shares recorded in the preceding week.
The average trading value also dropped, to the level of $483 million from $639 million (down 24 percent).
"The aggressive and persistent news regarding construction of dams that dominated the market during the week, together with the news at the end of the week that a team from Etisalat would once again visit Pakistan to pursue its deal over PTCL were main factors affecting the market," an analyst from Atlas Investment Bank said. This multi-billion-dollar transaction has been dragging on inconclusively for over three months, leaving market participants immune to news pertaining to it as was evident from the relatively low interest generated in the scrip on Friday. "We reiterate the fact that the market has entered an overbought zone and, therefore, recommend investors to trade cautiously and book profits whenever accrue," he said.
On Monday, the index rose 27 points to close at 9459 points level after the announcement by Fauji Foundation to sell 52 percent stake in Fauji Cement company, creating positive sentiment. The stock advanced 4.8 percent to Rs 28.25. Lucky Cement advanced 1.1 percent to Rs 80.85. D G Khan Cement also contributed to the upside, increasing 0.7 percent to Rs 110.85. Pakistan Telecommunication rose 1.9 percent on optimism of its successful privatisation. Among other major gainers was Pakistan International Airlines, closing up 9.2 percent at Rs 11.85.
The KSE index lost 0.1 percent, to 9451-point level, on Tuesday when investors preferred to book profits before the crucial level of 9500. D G Khan Cement declined 0.5 percent to Rs 110.25, and National Bank of Pakistan dropped 0.5 percent, but Pakistan Oilfields gained 0.8 percent to Rs 424.5 on optimism of higher international oil prices.
Most of the stocks weakened with the index declining 0.5 percent to close at 9403 point level on Wednesday. This correction was due to overvalued prices of many stocks. With privatisation hype, SSGC and SNGPL recorded gains of 0.7 percent and 4.7 percent, respectively.
Thursday saw the index gaining 0.9 percent to close at 9489 points level, advancing on the back of the banking sector. Cement sector remained under fire due to reduction in cement prices. Oil and gas sector helped to push the index upwards, with OGDC alone contributing 28 percent to the day's upside on optimism of gas price revision by Ogra.
The two sessions on Friday led the index to advance 0.3 percent to close at 9514 points level. Bank and oil and gas stocks recorded fresh gains. PTCL, the nation's biggest telecom operator, gained 0.4 percent to Rs 64.40 on the back of privatisation talks between Etisalat and Privatisation Commission scheduled for December 19. Cement stocks continued to remain under fire after President Musharraf stated to take public opinion on the construction of dams.
An analyst from Alfalah Securities said that though the index had crossed the 9500 level barrier after much battering in cement stocks, the market sentiment suggested an upward rally of about 1 to 2 percent hence. But he added that profit taking was likely to seep in more often, as open interest in futures seemed to be on the rise. Moreover, if the Privatisation Commission succeeded in persuading Etisalat to buy PTCL in its scheduled meeting on December 19, it would boost the investor confidence. "Our top picks are SSGC, SNGPL and FFBL," he added.
"We expect the market to remain range-bound during the coming week, with the investors taking a cautious stance," said an analyst from KASB Equities. "Any developments on the Kalabagh dam issue would determine the market sentiment. Developments on PPL and SNGPL privatisation deal could trigger stock specific activity. We are selectively positive on the market and recommend investors to go long in Pakistan Oilfields, Fauji Fertiliser Bin Qasim, Nishat Mills, and Azgard Nine. From dividend yield perspective, Kapco looks attractive," he said.