KSE Review: Rs 51b pumped into shares w-o-w as KSE steams past 6,200

KARACHI: The Karachi Stock Exchange 100-share index crossed the 6,200 points level, touching all-time highs this week as the oil and gas sector led the rally capitalizing on successful exploration activities, said brokers.

The KSE-100 share index closed at 6,218.40 points last Friday, up 172.6 points from previous weekend’s close of 6,045.80 points. “We had never seen such a rally as the witnessed during the last few weeks,” said Zafar Moti, a stockbroker. “This has been driven by economic growth in general and successes achieved by the oil and gas exploration companies.”

The market witnessed a volatile session on Monday when the index increased only 0.36 points and closed at 6,046.16 points. The market saw a bullish session on Tuesday climbing 31.57 points to close at 6,077.53 points. It further gained 45.84 points on Wednesday, closing at 6,123.67 points. On Thursday the market reversed its trend and the index plunged by 16.74 points to reach 6,106.93 points. The market witnessed an extremely bullish session Friday, as the index climbed by 111.47 to close the week and the year at 6218.40.

Brokers said the index could take a correction in coming days, but after that the energy, banking and cement sectors would again generate a rally. The textile sector is also expected to come into the limelight in 2005. The award of licenses to OGDC for exploration in more areas was the main reason for the buying rally in the last two days of trading, brokers said.

As badla volumes were high throughout the week, weak holders offloaded their positions in every session. However, buying on dips due to the overall positive atmosphere did not allow the index to close in negative except Thursday, analysts said. Market capitalization increased by 3.05 percent to Rs 1.723 trillion from Rs 1.672 trillion of the previous week, the KSE’s market report said. Average daily turnover during the last week was 558 million shares, up 10.49 percent from 505 million shares traded on an average the previous week. Brokers said badla rates are traditionally high in December, because banks reduce or stop their funding owing to year-end settlements.

Brokers said the State Bank was efficiently handling the matter of inflation and interest rates by not allowing the latter to rise speedily.

The shares of oil marketing companies are expected to rise owing to an increase in domestic oil prices by the Oil Companies Advisory Committee. Analysts said the banking sector continued to perform well as there are expectations of healthy results. The fertilizer sector continued to capitalize on its demand, as sowing for different crops is going on at a fast pace. The cement sector remained mixed during the week, as some companies registered gains in share value while others lost. But the analysts said the cement stocks would rise in the future on the back of strong demand because construction activities are expected to rise.

Brokers said the volumes of carryover transactions and rates were high at the moment but the investors were not anxious yet, as the market was moving on strong fundamentals. Retail investors and institutional buyers participated fully in the market hoping for positive advancement in the privatization process.

OGDC moved from Rs 73.25 at the end of previous week to Rs 74.95 at the end of last week, increasing by Rs 1.25. PTCL surged by Rs 1.85 to Rs 44.20 from Rs 42.35. Fauji Fertilizer Bin Qasim was up by Rs 1.55 to Rs 30.60 from Rs 29.05. Dera Ghazi Khan Cement moved to Rs 54.75 from Rs 53.80, increasing by 95 paisas. Pakistan State Oil climbed to Rs 286.75 from Rs 282.00, a surge of Rs 4.75.

Volumes at the futures counter decreased to 156.227 million shares at the close of last week as compared to 160.425 million shares at the close of previous week. —Staff Report

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