20000219

KSE index breaks

1,900-point barrier

RECORDER REPORT

KARACHI: Stock values bloomed sharply and, as expected, the index broke the 1,900-point barrier after more than three years when buying from financial institutions, brokerage houses and players in fuel, energy and telecommunication companies emerged.

The KSE-100 index registered a rise of 54.45 points, or 2.89 percent, to 1,938.17 from 1,883.72 of Thursday. The volume amounted to 238.173 million shares, against 276.081 million shares of Thursday. Market capitalisation moved up to Rs 494.971 billion from Rs 482.610 billion of Thursday.

Faisal Abbas, of AHR Secretaries' said that the index had crossed the barrier of 1850 during the previous bulls', rallies, but it was the first time in the past many months that the index breached the 1,900-point mark. Market punters were expecting that the index might cross the 2,000-points level soon.

He said that punters were hopeful about Hubco affair as its case seemed moving in a positive direction and some good news might be forth coming. The overall bullish attitude of marketmen for the last whole week, especially activation of textile sector, was also one of the major reasons for ongoing bullish onslaught.

The market recorded unprecedented growth, as all scrips, which have been targeted by the Privatisation Commission scored good gains. According to a leading trader, the market had improved on the back of government's effort to privatise state-run units.

He pointed out that the rally had been totally driven on the consideration of privatisation. Sui Northern Gas, Sui Southern Gas and PSO have been made autonomous bodies as part of plan to privatise these units. These units would be run by professionals to make them viable for disinvestment, it is being expected.

There was report that the Privatisation Commission has asked foreign companies to bid for financial advisory services for PSO. The PSO is the largest oil supplier in the country, with more than Rs 20 billion worth of its assets.

An analyst from Westminster and Eastern Services Ltd said that the index was riding on a roller-coaster as bulls warmly appreciated the government's efforts to bring back the economy on track. The index registered handsome gains.

A couple of developments, including that eight companies in fuel and energy sector had been given full autonomy, and the restructuring of leasing sector kept the investors' spirits high in these two sectors throughout the day. However, some profit-taking was also witnessed in high liquid scrips as the market attempted to exaggerate further rise without taking any breath.

The KSE index witnessed an extraordinary rise of 233 points during the week. On technical grounds, the market has landed in an overbought zone. The analyst of the brokerage house believed that the market might witness technical correction during the next week. He advised their clients to accumulate profit on short-term portfolio on strength.

The market was ripe for downward correction but the developments on economic front, especially the steps taken by the government to complete rescheduling with Paris Club and the likelihood of the dispute to be resolved with Hub Power Co by end this month. These measures boosted the sentiment of marketmen and prices in fuel and energy sector rose sharply.

PTCL on trading of 91.086 million shares gained 85 paisa to Rs 31.50; Hub Power moved up to Rs 28.85 from Rs 28.35 as nearly 68.200 million shares changed hands; PSO on a turnover of 14.913 million shares closed at Rs 254.00, higher by Rs 9.50; ICI on a volume of 9.334 million shares remained unchanged at Rs 12.60; and Sui Northern Gas on a business of 7.270 million shares moved up by Rs 1.25 paisa to Rs 23.45.