Bulls push Pakistan share index above 8,000-points

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Bulls push Pakistan share index above 8,000-points
KARACHI, Feb 23 (Reuters) - A bull run inspired by strong corporate earnings and optimism over Pakistan’s privatisation programme carried the country’s main share market index above the 8,000-points level for the first time on Wednesday.

The latest buying spree began two months ago, and on Wednesday Karachi Stock Exchange’s key 100-share index rose 121.45 points or 1.53 percent to 8047.37 point at 0710 GMT.

Gainers beat losers 116 to 62 on a turnover of 308 billion shares.

Investors built fresh positions in state- run blue chips Pakistan Telecommunication Co. Ltd (PTCL) and Oil and Gas Development Co. Ltd (OGDCL).

PTCL is due to report its earnings on Thursday.

OGDCL reports on Friday, but the exploration and production firm is also subject to speculation it may soon announce a new find.

“PTCL shares are hot on expectations of its timely privatisation and strong half-year earnings,” Shuja Rizvi, head of institutional sales at Capital One Equities.

“The OGDCL is in demand on talk of some major discoveries made by the company… It will also announce its results this week,” he said.

Among blue chips, OGDC.KA rose by 3.25 rupees to 103.15 rupees, PTCA.KA by 45 paisas to 64.25 rupees and Pakistan State Oil by 7.05 rupees to 401.25 rupees.

once again breaking its own record!! well done KSE!

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Re: Bulls push Pakistan share index above 8,000-points

The KSE-100 index could hit 12000, and still it wouldnt mean anything. The KSE index is one of the most misleading indexes in the world. Normally the elevation of any exchange index is somehow relative to an upward swing in the economy, but in the case of KSE, it is misguiding in the fact that index weightage is distributed very unevenly. Within the past 3-4 months, OGDC alone has been responsible for adding at least 2000 points to the index. OGDC has a 23% weightage in an index that includes 99 other companies. Add PTCL with its 14% weightage, and you have 63% weightage left for 98 companies.
Right now the KSE gives the look of a casino, rather than a stock exchange.

ok, you know what
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Re: Bulls push Pakistan share index above 8,000-points

hmm last i checked it broke the 5000 barrier and everyone was so stunned! What's up with Stock Market in Pakistan anyway?

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Re: Bulls push Pakistan share index above 8,000-points

Akif Bhai, all you said went over my head. Can you elaborate? PLEASE.

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Re: Bulls push Pakistan share index above 8,000-points

AJ bhai...
The index for any exchange, eg DOW for the NYSE, FTSE for UK, SENSEX for Bombay, and KSE-100 for Karachi, is an overall indicator of how things are going. An index is a collection of companies that the market feels define the changes in economy. In other words, they are all strong companies. DOW Jones index works with 30 companies. KSE-100 index works with 100 companies.

Now each company has different weightage with respect to the index, depending on the companys holdings, and impact on economy. eg, if both 'microsoft' and 'abc tech' are on the DOW Jones index, then microsoft would have more weightage, since it is a bigger, better, stronger and more viable company. Meaning, if microsofts stock price goes up by $1, the Dow index might shoot up 10 points as a result. Whereas, if abc tech stock goes up by $1, the index might go up by 1 point only. Meaning, a rise in abc techs price doesnt have that much of an impact on the economy and market as a whole.

In the KSE-100 index, the index weightage is distributed among 100 companies. I dont expect each of the 100 companies to get 1% weightage each, since some are stronger than others, but to have one company with 26% weightage means that if the price of OGDC goes up by Re.1, the index shoots up 40-50 points. PTCL has 14% weightage. The third highest weightage is about 3.75% for a few companies. This give you an idea of the disparity in weightage distribution.

This past thursday, the market ended up by 70 or so points. A look at the leader board showed a total of 4 or 5 companies that closed higher, and OGDC was one of them. Rest were all in the red. Take OGDC out of the equation, and the market would have closed about 200 points lower. That gives you an idea of how misleading this index is. With one company having a volume of 1 billion shares traded, and others lagging behind with volumes in the thousands, its far from a healthy market.

Last person to answer this post wins!!!!
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Re: Bulls push Pakistan share index above 8,000-points

Jealous ppl vi na :rolleyes:
hum masoomoan kau dhang say khush bhi nahi haunay daitay :bummer:

Attention all Karachites and NRPs in Karachi
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Re: Bulls push Pakistan share index above 8,000-points

SimplySeema.....just looking out for the chota investor.:) All the sattay-baazes have ruined the outlook of the market for the real investors. Natural appreciation and depreciation are much more easy to swallow. Unnatural growth is very easy to swallow, but the depreciation that follows is not. It leaves half the market bankrupt.

The real value of this market is barely above 5000, so you can see the possible amount of correction we are looking at. Now when this bubble will pop is anyones guess, but sooner or later it will.

::: Aaj meri aazaadi khatam ho rahi hai :::
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Re: Bulls push Pakistan share index above 8,000-points

JazakAllah Akif Bhai, you made it very clear. Even a gofer like me could understand.

So, who came up with the 100-index? Government or is it a private exchange? And what is the process (or who is responsible) to make this index better?

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Re: Bulls push Pakistan share index above 8,000-points

AJ bhai....
The KSE is not governed by the government. It is overseen by the SEC (securities & exchange commission), which is basically the police force for the KSE. It enforces laws, and makes sure no hanky panky goes on.
The KSE is made for the public, run by the members. It has a board of directors, majority of whom are members of the stock exchange. The positions rotate between the members, with a different set of members being appointed to the board every time, in order to ensure balance and fairness.
There are almost 750+ companies listed on the KSE. There is a set of requirements and rules that need to be filled for a company to be listed on the stock exchange. Once those requirements are fulfilled, the final decision is at the discretion of the board. Mostly, this discretion is not exercised, and a company usually gets listed, so long as it fulfills all requirements, which mainly revolve around money, i-e, the market capitalization it brings. If at any time, the company stops fulfilling any of the requirements for a certain amount of time (usually 2-3 months), it is de-listed.
Next step is getting into the KSE-100 index. Plainly speaking, the KSE-100 index is made up of the top 100 companies out of the 750+ that are listed. Being one of the top means, your market capitalization is in the top 100. To give you an idea, the current 100 companies on the KSE-100 index make up for more than 85% of the total market cap. The remaining 650+ companies account for the remaining 15%.

The KSE board is responsible for making the process better. The board is made up of members of the KSE. A member is basically one who has bought a license to buy and sell on the exchange. There are a total of 200 memberships in the KSE. Many of them are owned by the same person. In all, I think there are about 150 active members, and with many of them owning multiple memberships, it makes for a lopsided representation. Now its upto the directors to reform the index...but then again with members having personal stakes in a lot of issues, its difficult to expect them to reform the index in a more appropriate way.

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Re: Bulls push Pakistan share index above 8,000-points

I wudn’t say dat da market’ll crash, rather it wud correct itself may b by 300 to 400 points which in my opinion is good 4 it, 8000 is n important level, if market breaches dat then it wud b sumwhere around 7875 / 7900. s v hv seen, since da rally began da market witnessed n intra day correction, after which there was n uptrend. Volatility is more obvious than anythin else creepin in be4 da market consolidates n picks itsself.
PTC will keep da index up there when ODGC will start 2 cum down, still Playin safe is da word of da day

Compare The Two
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Re: Bulls push Pakistan share index above 8,000-points

SS....I didnt say the market would crash. The investment is too lopsided for it to 'crash'. The market went up by 550 points last week, and 400 of those were due to OGDC:) And while OGDC can fall to the 100 rupee range, I dont see it falling back to the 60 rupee range.
The correction we are looking at will not come around within a day or a week (though that cant be ruled out entirely), but it will be a gradual process, once 'investors' take over 'traders'. The intraday corrections we are witnessing right now are not exactly that...there are minor profit taking sessions, with the market winding back up. They are not exactly sustaining themselves. PTC is not nearly strong enough to sustain a strong growth rate, as compared to OGDC. PTC can provide stability to the market, but not the kind of accelerated growth we have witnessed in the past couple of weeks.
But then again, I may be proven wrong, since the market is a collection of artists waving their brushes randomly in all possible directions.