20000115

KSE index crosses

1,600 mark

RECORDER REPORT

KARACHI: Equities breached the barrier of 1,600 points on Friday as foreign buying pushed the stock market up on nearly all counters where second-tier companies bloomed sharply with volume scoring an increase of 127.487 million shares from Thursday's 147.348 million.

"The confidence of foreign investors has been rehabilitated as the government last week gave permission to repatriate their profits earned through the sale of shares", a leading trader said.

He said that the decision of the government was taken by the stock market as a confidence boosting measure. The investors can now enter and exit the market without any repatriation risk. However, analysts said that the government should go back to the pre-nuclear tests practice of allowing investors to remit their money overseas, and foreign banks should be allowed to remit directly without the approval of the State Bank. It would help attract foreign investment in the stock market, he added.

The KSE-100 index registered an increase of 44.50 points or 2.81 percent, to 1626.10 from 1581.60 of Thursday. The volume moved up to 274.835 million shares from 147.348 million shares of Thursday. Market capitalization finished at Rs 417.164 billion from Rs 406.299 billion of Thursday.

The stock market also showed improvement as a result of government's effort to speed up the privatisation process. The government intends to sell shares of PTCL and expects to fetch $1.0 billion. Sui Northern Gas also continued its upward march as the company is expected to be privatised soon. Furthermore, the company's performance during the past couple of week was commendable and to make the entity more profitable it decided to expand its existing plant by $700 million.

Another factor which helped the sentiment was the report that the PSO's profit might show an increase of 40 percent to Rs 2.6 billion. The company would announce its financial results for the year ended June 30, 1999 by next week.

A seasoned trader said that now the market has entered a highly overbought zone and might encourage downward technical correction. Several scrips have touched attractive levels and might gear up profit taking in the sessions to come. It was advisable for the small investors not to enter the market at this juncture otherwise they might suffer colossal losses.

Leading market players might offload their holdings in order to book profits which would create dents in the stock market. Speculative forces have now entered the rings and would artificially lift the stock values in the coming sessions by 30 to 50 points more to lure small investors.

PTCL on a trading of 64.551 million shares denoted an improvement of 70 paisa to Rs 25.85, Hub Power on a business of 51.238 million shares remained unchanged at Rs 24.00, ICI on a volume of 3.008 million shares recorded a rise of 90 paisa to Rs 12.25, Sui Northern Gas on a turnover of 25.088 million shares closed at Rs 19.95, showing an increase of Rs 1.80, and PSO had an improvement of Rs 1.10 to Rs 224.00 on deals of 12.772 million shares.