DAWN.COM

THE KSE 100-share index last week, despite a mid-week technical correction, maintained its onward drive aided by fresh strong support linked with higher payouts by leading banks under the lead of National Bank, speculative buying on other counters and an imminent debut of reformed Capital Gains Tax possibly by April 1.

The notable feature of the week was a record volume of 553 million shares after six years which was celebrated by brokers as it ensured a fair commission income amid hope of further improvement in coming weeks.

The previous single record was established at 1.2 billion shares some 10 years back and volume of 700m and 900m shares were recorded many times in the boom years when the index soared to 15,172 points.

Another notable feature was the major shift in investors’ buying strategy which made massive fresh commitments in the undervalued sectors, mainly in cement shares, which turned out larger volumes each session under the lead of Fauji Cement, Dewan Cement and Lafarge Pakistan, while their senior partners maintained upward drive, D.G. Khan Cement and Lucky Cement being on the top.

On the other hand the blue chips sector remained mostly neglected in the absence of foreign support for oil shares and alternate bouts of buying and selling in these shares.

The benchmark index posted a sharp rise of 189.34 points or 1.45 per cent at 13,276.31 points, pushing the total market capital at one stage to a record high of 3,441.127 billion, surpassing its previous high of 3,345 billion a decade earlier.

The persistent rise in the benchmark to well over 13,300 points may not be totally speculative but now seemed to have touched that limit as it was shared by the strength of the broader market.

The higher single-session volume of well over 358 million shares reflected that the market was treading on a sound footing ahead of new CGT regime from April 1.

Much of the support remained confined to the banking sector where low-priced ones, notably Bank Alfalah, NIB and others came in for sympathetic support with the National Bank and ended higher.

A cash dividend of 75 per cent and bonus shares of 10 per cent by National Bank gave a pleasant surprise to analysts as it was on the higher side of the predictions.

“It appears to be the week of Pakistan’s leading and largest bank as all roads led to it on market talk of higher earnings and payout,” said Ahsan Mehanti.

Ahead of the board meeting of NBP, rumours of exceptionally higher payout flooded the markets and investors hastened to cover positions for quick capital gains, he added.

He said bulk of support, however, remained confined to low-priced banks, cement and fertiliser shares and reflected that investors were still in no mind to test the general health of the market sans the leading base shares.

Analyst Samar Iqbal said National Bank was in strong demand last week also on reports of higher earnings but all eyes remained focused on its shares amid conflicting reports of the size of the payout.

But the reaction of the session’s peak level of Rs55.19 reflected that all rumours were speculative and an increase of only 97 paisa discounted the wild speculation about real investor return on investment.

Future contracts: Although much of the activity on this counter remained confined to half a dozen shares, heavy covering purchases in million shares reflected investor optimism about the future outlook, notably after April 1, when the amended CGT regime was expected to be in place.

The mid-week higher payout by NBP further accelerated the pace of speculative buying on the current actives, which maintained their upward drive despite mid-week modest correction.

Engro Corporation also came in for active short-covering on reports that gas supply to its new plant had been restored. Arif Habib Corporation, Attock Refinery, Nishat Mills and some others were also traded higher.—Muhammad Aslam