STOCKS last week maintained their upward drive as investors continued to build up long positions on selected counters after reports of expected higher corporate payouts by oil, fertiliser and banking sectors.

The market’s buoyant mood was also reflected in the KSE 100-share index which was quoted higher by 366.58 points or three per cent at 12,389.04 for the eighth straight week. It also signaled that its next target could be 15,000 if all goes well on the political front amid market expectations of higher payouts.

But bulk of the support, both foreign and local, remained confined to the oil sector under the lead of Pakistan Oilfields, OGDC, Pakistan Petroleum, National Refinery and some others, which led the market advance in term of gains and price appreciations.

At the fag-end of the week, all roads led to the oil sector followed by rumour of oil discoveries under the lead of Pakistan Oilfields, which finished sharply higher. “The OGDC remained under virtual speculative squeeze by some of the leading foreign investors and local institutions. The reports of shortage of floating stock, as some of the speculators had almost cornered about 80 per cent of its liquid float; its share value led the market advance.

It alone contributed about 100 points in the benchmark on Thursday’s steep rise and analysts said it could maintain its role of a market trend setter, next week also.

The other supporting factor was the market talks of higher corporate earnings and hopes of handsome dividend by leading oil, fertiliser, banks and the auto sector.

The share market on Monday opened its account on a subdued note on hasty selling by all and sundry triggered by political turmoil and fears of exit of the ruling setup after one of its coalition partner parted ways.

Much of the selling was confined to National Bank, Nishat Mills, United Bank, Pakistan Oilfields, OGDC, Pakistan Petroleum and some others, which together account for over 60 per cent of the weightage in the benchmark.

But the midweek rally caused by the oil sector allowed all of them to finish not only fully recovered but also with fresh gains. “The early sharp reaction appears to be psychological rather than real,” said analyst Ashan Mehanti commenting on the prevailing panic. “As far as the basic market fundamentals, mainly talks of early introduction of leverage product for the ready section are concerned, they are not so weak,” he said.

The market managed to absorb the shock of Punjab governor’s assassination and managed to finish steady despite stray selling on some counters.

“I may be wrong, but the market has the potential to rise from the current low even tomorrow as much of the dust raised on the political front may settle down,” he added.

“The investor’s choice is widely opened during major jolts,” he said. “He may not go by his whims but may opt for the best despite the presence of bearish undercurrents on the political front,” he added.

Another analyst thinks the change of the government may not be a major investor’s problem; the important thing for him would be who would put the economy back.

The New Year opening was contrary to the analyst’s predictions as political uncertainty and future of the present setup caused snap selling from all and sundry, he added.

“Some would welcome its exit owing to weak economy, high rate of inflation and many other unresolved issues,” they said but viewed in the broader market perspective there might not be many political rescuers in the real sense in the unfolding political scenario.

Future contracts: A massive speculative activity in some of the leading shares, mainly Fauji Fertiliser, Nishat Mills, Pakistan Oilfields, National Bank and some other featured the trading on this counter.

The on balance closing was on the higher side, major gainers being Pakistan Oilfields, National Bank, Nishat Mills and some others.

—Muhammad Aslam