Markets maintain bull trend on sustained gains

KARACHI — The share market managed to finish with an extended gain last week after having braved a number of negative psychological factors and perceptions of political instability thanks to terribly credible performance of the oil sector.

By Our Correspondent (KSE WEEKLY)

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Published: Mon 24 Sep 2007, 9:18 AM

Last updated: Sat 4 Apr 2015, 11:44 PM

The next trading week could be very crucial for the future direction of the capital market as most of the constitutional as well as legal as and political issues will be settled by the supreme court. How the contenders of power will react to them, the market will base its future trading base on them, said a leading analyst Faisal A.Abbas.

The KSE 100-share did breach through the barrier of 13,000 points over the week at 13,127.58 but failed to sustain it on selling prompted by fears of political turmoil after the apex court's verdict on the president's dual office petition.

It finally finished at 13,065.17 points as compared to 12,779.68 a week earlier up 285.49 points as leading base shares reacted with the same speed as did they rise on the news of record increase in world oil prices.

However, leading oil shares and a good number of blue chips managed to finish with smart rallies on the strength of higher dividend and bonus shares.

Overall, it was the extension of the previous week's rally. The expected apex court ruling on the president's two offices, announcement of date for the presidential election on Oct 6, and investor worries about Pakistan's foreign currency ratings could work against the underlying sentiment possibly by the next week, market sources said.

But some others said snap price flare-up in the local oil shares caused by the steep increase in world oil prices did give instant boost to the market but in general terms it was unreliable phenomenon and fades as quickly as it makes its debut.

Trading on the share market on Monday resumed on a cheerless note amid fractional price changs as leading investors kept to the sidelines apparently awaiting the revival of institutional support but there was a relative quiet on this front. The mid-week witness the return of the bull market aided by record increase in world oil prices.

“ Though a bit late, I think the proverbial sluggishness associated with the holy month of Ramazan has made its silent debut”, said a leading analyst adding the “absence of big players reflects there may not be pleasant surprises in the sessions to come also”.

Most of the current favourites and volume leaders were neglected, while bulk of the support remained confined to secondliners where the risks are minimum, he added.

But some others said leading investors are awaiting apex court verdict against the president's dual office petition before resuming normal activity.

“It appears to be a judicious blend of moping operations of both the local institutional and selective foreign buying though it was essentially aiming at quick capital gains rather than holding on to long positions”, analyst Ashraf Zakaria said.

He said investment buying may not inflow in a big way until there is political uncertainty as no one would like put his saving in a market whose future direction is uncertain.

But some others said the market would continue to give an erratic performance despite the fact that basic fundamentals are terribly bullish based on higher dividend and future growth potential of the broader segment of issues.

“ The market entirely is not guided by the strength of a bullish corporate regime it has to work also in the framework of political background news”, analyst Ahsan Mehanti said.

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