The market since morning remained in the positive zone and hectic activity was witnessed in OGDC, Pakistan Oilfields, PTCL, PSO, and Pak Petroleum. All the scrips having heavy weightage climbed sharply on the expectation that the earnings of the gas and oil exploration companies would record handsome profits. The licences issued to the OGDC and PPL would boost the reserves and earnings of both the blue chips.
President Musharraf's announcement to hold both the offices of President and COAS on Thursday gave positive signal to the market men that economic reforms would continue and the market consolidates its position. Moreover, the president assured the investors and business community that the image of the country would improve further with boost in exports and revenue collection.
The market despite the last working day recorded significant gains mainly because of the support from the leading investors who wanted the market to close on bullish note on the last session of 2004.
Ashraf Bava, equity dealer from Elixir Securities said that many stocks were doubled, tripled and quadrupled. It should have been very difficult to lose money this year. From cements to banks to textiles to the oil stocks, one after another we have seen impressive rallies in the market this year.
Hasnain Asghar from Aziz Fidahusein said that the speech by the President confirmed his stay till at least December 2007 and unfolded the strategy of reducing poverty by speedy economic growth and focusing on the ongoing development projects by upgrading small dams and construction of canals with a commitment of announcing mega dams construction shortly.
All these measures and steps to be taken by the president got a "red carpet welcome" and the index recorded unprecedented jump of 111 points.
The news that Oil and Gas Regulatory Authority (Ogra) has issued licence to OGDC for supply of gas from certain gas fields invited aggressive buying in the stock. The high worth individuals actively participated in the rally as the focus was on oil and gas stocks with Pakistan Oilfields joined the rally and the stock gained Rs 13 even after adjusting towards the end.
Technically, the index would continue to face resistance around 6,226-6,251, while the support stays around 6,090-6,096. The temptation of corporate results would continue, therefore, trading could be opted in main stocks with stop loss limits.
An analyst from Live Securities said that this huge increase reflects that financial institutions have entered into the market and they are on the buying side. It seems that the investors have taken a positive stance from President Musharraf's speech. Lofty bustle and heavy gains were witnessed in oil and gas exploration stocks as the KSE-100 index touched an all time high of 6,218 level.
"As there is a loud whispering in the rings that foreign buying had already made its debut on selected scrips, therefore, we believe that the market will see new highs in the coming sessions," the analyst said.
However, we would like to advise our investors to buy at dips. We advise our readers to look at the prices and take decision to only book profit at higher levels. At the current level, we also do not recommend long-term investments.
OGDC gained Rs 2.75 to close at Rs 74.95 on a business of 180 million shares, Pakistan Oilfields moved up to Rs 246.60 from Rs 233.75 on a turnover of 70 million shares, PTCL rose 10 paisa to Rs 44.20 on a trading of 49 million shares, Fauji Fertiliser Bin Qasim denoted an increase of 60 paisa to Rs 30.60 on the transaction of 42.7 million shares and Lucky Cement showed an increase of 20 paisa to Rs 40.65 on a volume of 27.3 million shares.