Mainly charged by investors' aggressive buying interest in oil and gas sector, and to somehow in cement sector, the local share market remained bullish during the last week, while the index surged 3.93-percent with 18.68-percent decline in volume of transactions.
With the exception of first trading day, when the market moved both ways and ended with a weak sentiment amid low activity because of lack of interest in key chips, the market painted a pleasant picture in the week under review, which was comprised of only four trading days instead of five days.
The market was closed on Thursday, March 23, 2006, on account of public holiday declared by the Government on Pakistan Day. According to brokers, there was a visible in change in the market behaviour and it was less volatile during the week as compared to the preceding week.
Oil and gas sector dominated the trading with PPL, OGDC and Pakistan Oilfields appearing as trend setters. Cements and fertilisers also fared well but the banking sector stayed depressed, even despite good results announced by National Bank.
According to analysts, knowledgeable brokers had already got the information about the extent of cash divided and bonus share and were able to exploit the news; therefore, its impact was minimal on the day the results were formally announced.
However, due to strength in oil and gas sector, the index kept gaining to surge by 209.52 points or 3.93 percent to finish at 5537.99 from 5328.47. Volume, however, moved down from 82.676 million shares to 67.230 million shares depicting a fall of 15.446 million shares or 18.68-percent.
Analysts were of the view that if investors' interest continued in the index movers, such as OGDC and PPL, the market could have good trading sessions in the upcoming week.
Share values showed an erratic movement on first trading day of the week under review while last-minute heavy profit selling in petroleum sector badly hit the sentiment, forcing the market to close with a bearish note. The LSE-25 index ended at 5314.36 points compared with 5328.47, showing a marginal fall of 14.11 points. Volume surged to 92.130 million shares from 82.676 million, posting a rise of 9.453 million shares.
The market took a very good start and the positive trend led people go for fresh buying activity. According to brokers, impact of the good earnings of National Bank was also visible in market but it failed to bring a change in the sentiment.
There was also a sharp upward movement in OGDC and PPL, in early hours, but in later part of the session heavy profit-selling in oil and gas sector altered the sentiment and the market lost what it had gained in early hours. PPL and PSO were the major losers, while Engro Chemical and National Bank gained despite massive panic selling in the market.
The market sentiment changed on the second day and equities recovered earlier loss under the lead of OGDC and National Bank amid descending transaction volume, on account of lacking interest on the part of traders. The LSE-25 index improved by 42.30 points, closing at 5356.66 against 5314.36. Trading turnover declined to 72.458 million shares as compared to 92.130 million shares. OGDC, Sui Northern, Sui Southern in oil and gas sector, National Bank, Union Bank, Prime Commercial Bank in banking sector helped market improvement.
However, exploration companies shares, including Pak Oilfield, PSO and PPL and banks such as MCB Bank, Askari Commercial Bank, Bank of Punjab, United Bank and Picic underwent pressure.
Equities climbed up again on Wednesday due to buying interest in Engro Chemical, ICI Pakistan and fuel and energy sector, which helped the index close above 5400 mark. The LSE-25 improved by 62.93 points or 1.17 percent, closing at 5419.59 as against 5356.66 points. Volume soared to 73.498 million shares from 72.458 million shares, posting a slight improvement of 1.039 million shares. The market took a healthy start and then maintained the bullish mood later in the session, owing to buying in ICI, Engro Chemical and fuel and energy sector.
According to brokers, the market once again showed strength and unlike past session, there seemed no unease or nervousness on the part of investors. Besides fertilisers and oil and gas stocks, movement was also seen in cement sector while UBL and National Bank remained depressed.
The market was closed on the second last day of the week on account of Pakistan day, but on the next day bulls had full control of the market where people witnessed a sharp movement in oil and gas sector which outperformed. Equities stayed bullish while the index crossed 5500 points level, registering a net gain of 2.18 percent.
The LSE-25 index closed at 5537.99 points compared with 5419.59 of its past closing, posting a rise of 118.40 points or 2.18 percent. Volume, however, was on the lower side and retreated to 67.230 million shares from 73.498 million shares, showing a decline of 6.268 million shares or 8.52 percent. The market took a pleasant start, with oil and gas sector to lead the proceedings. Buying interest in oil and gas sector took the index to upside which closed above 5,500 level.
Pakistan Oil Fields, PPL and OGDC were the prime forces moving the index in upward direction swiftly, while National Bank, Engro Chemical and MCB Bank were the major losers. Analysts said that the PPL and OGDC having massive weight in the index kept the market in positive zone throughout the day and the trend was also followed by cement, especially Lucky Cement.
According to analysts, at first sight there seems no reason for weakness of the market, as it is back on track after undergoing corrections. "I think now the market is no more in overbought range, therefore, there is likelihood for its staying bullish in the coming week." But chances for big rallies in absence of any fresh news are very minimal, they said, adding, after announcement of December closing results by almost all the companies, the market is no more attractive for buying.
However, oil and gas sector, which is till oversold, could attract buyers attention. Cement sector is another sector that could show strength because of increase in construction activity in earthquake areas and construction of Bhasha Dam, hopefully in the near future, they observed.
According an analyst, trading activity is likely to remain slow in first three weeks of April, while it may pick up in last week of the month when results for the next quarter will start pouring in.