KSE greets Shaukat’s rise to the slot of prime minister


Index shoots up by 173.34 points

By our correspondent


KARACHI: Bullish flames leapt over the share market on Monday in the wake of the announcement of former Finance Minister, Shaukat Aziz’s name as prime minister-designate.

It was generally believed that Shaukat’s choice will auger well for the well-being of the national economy and unstinted growth of the private sector. From the investors’ point of view, his selection for the coveted post should ensure continuity of the economic reforms programme of the government and inflow of foreign assistance and investment hastening the process of economic take-off.

No wonder, therefore, that the market took a U-turn soon after learning that their favourite man has been chosen for the coveted post allaying all fears of destabilisation of the system due to the change of government and creation of a state of uncertainty and disarray for the capital market.

The market opened on a highly positive note in sharp contrast to last Friday’s sharp downturn, recording an overnight gain of 50 points in response to the announcement of the name of new incumbent to the chief executive’s slot.

Having digested the newly imposed taxes and backed by active buying support from punters and institutions, the KSE index continued to soar higher. There was across the board short covering in main stocks in the final hours leading to highest ever-single session gain of 173.34 points.

The investors drew strength from positive economic indicators and improving fundamentals accompanied by upcoming corporate announcements. Placed in a very comfortable position, the market took a giant leap forward.

However, analyst Hasnain Asghar Ali warned that the reasons for the steep decline from the ever-high level of 5,660 should be kept in mind in order to avoid a repeat of the major adjustment.

These reasons included the fact that the market was heavily exposed in sideboard items, law and order situation had deteriorated sharply, there was growing polarisation between the government and the opposition, the market’s highly overbought position underscored the urgency of technical correction and on top of it, the CVT issue and constant short selling took the index down to 5,105, last week.

However, the situation has now dramatically changed with the end of political uncertainty, promise of privatisation of state entities at accelerated pace under the stewardship of would-be prime minister and his assurance of consistent economic policies.

This encourages the hope of a dynamic and vibrant equities market. Brokers therefore advised investors to take advantage of low price levels of major and promising stocks.

The emerging political situation should however be cautiously monitored as at least 45 days have still to go before Shaukat Aziz takes over the helm.

A quantum jump of 173.34 points or 3.40 per cent in KSE-100 index at 5,279.03 led to an increase of Rs45.324 billion in the aggregate market capitalisation which crossed the psychological barrier of Rs1,400 billion at Rs1,420.975 billion.

Business volume also jumped up by 65 per cent at 392.37 million against 237.99 million on Friday last. A leading broker said that the bulls had a field day on Monday.

They started their onslaught on the bears from the very word go. The market was jubilant immediately after the break of the news that Jamali had resigned and Shaukat Aziz was set to take over as the next prime minister.

The prices remained on the ascending path throughout the day closing with a hefty gain of 173 points at 5,279. Cement stocks, banks and fuel and power companies featured prominently in the day’s trading.

However, OGDCL continued to be the market and volume leader going up by Rs2.35 at Rs64. Other major gainers were Bank of Punjab, Male Leaf Cement and Pakland Cement, which moved up by Rs3.60, Rs2.70 and Rs2.20, respectively all closing at their upper circuit breakers.

Analyst, Arjumand B Habib summed up the situation by saying that the market closed on a strong note indicating an upward posture in the coming session.

Meanwhile, the Privatisation Commission (PC) has fixed the offer price for the IPO of Pakistan Petroleum Limited (PPL) at Rs55 per share.

The KSE-100 index was up by 173.34 points or 3.40 per cent at 5,279.03 as against 5,105.9, a day ago reflecting the strength of base shares. Of 367 active stocks, 293 posted gains while 51 lost ground and 23 remained unchanged.

Business volume stood at 392,365,280 shares as compared to 237,986,100 a day ago. Aggregate market capitalisation totalled Rs1,420.957 billion as against Rs1,375.633 billion at the last weekend.

Among the volume leaders were OGDCL, dearer by Rs2.35 at Rs64 on 42.675 million; DG Khan Cement, steadier by Rs2.60 at 58.15 on 26.998 million; PTCL, up by 90 paisa at Rs42.50 on 26.279 million; National Bank, higher by Rs3.55 at Rs66.90 on 25.620 million; Fauji Cement, gainer by Rs1.30 at Rs17 on 21.780 million; Hub Power, heftier by Rs1.40 at Rs32.50 on 21.257 million; Lucky Cement, fatter by Rs2.40 at Rs39.30 on 19.609 million; Bank of Punjab, stronger by Rs3.60 at Rs51.90 on 15.673 million; FF bin Qasim, up by 90 paisa at Rs19.25 and MCB, better by Rs3 at Rs51.05 on 14.130 million.

Main gainers were Arif Habib Securities, up by Rs49.15 at Rs704.90 and JOV and Co, higher by Rs40.85 at Rs585.85.

In the minus column, Treet Corporation eased by Rs13 at Rs315 and Siemens Engineering fell by Rs8 at Rs530