Is she faking it ?
Karachi stock exchange is showing mamoth activity, which is unprecedented. Two months ago it crossed the psychological limit of 6600 point next week crossed 7000 and now bubbling just under 9000 
And according to speculation it is going to cross 10,000 points till the end of this month.
What is happening ?
Ok ! few hundred points are understandable and good, but what is this. Can anyone explain the phenomena ? 
Re: KSE's frequent orgasms !
I have not followed Pakistan's economy all that closely in the last few years, except to read an article here and there or to find some nuggets from what you guys post here, but here are a few thoughts anyway.
Such massive surges can mean different things to different people. An optimist will say that the market was hugely under-capitalized pre-9/11 and since then the massive investments of foreign funds is driving the exchange up and up.
A more cautious approach will suggest that there is some major investment happening in key sectors (e.g telecommunications) and one should keep an eye on those sectors, while the rest of the index-components are just reaping the benefits of availbility of funds.
Although, I fail to see how such massive capitalization can occur in the stock market without a corresponding increase in the performance of base companies. I am sure there is a link, but it seems quite disproportionate. I would stake my bet on what Akif has been saying for a while... some of this increase is genuine, but most of it is speculative and driven by a few influential brokers in KSE, who are getting very rich (and richer) in the process. The high volume of activity suggests that there are now a huge number of fairly unsophisticated investors in the market and they are likely to bear the brunt whenever the rug is pulled. The key is to keep an eye on the performance of the Companies you are investing in, and not just go by their stock price.
Re: KSE's frequent orgasms !
What percentage of the top companies make up the capitalization of the Index?
Re: KSE’s frequent orgasms !
Check it yourself
My bad, It has crossed 9000 points already 
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please analyze the reasons
Re: KSE's frequent orgasms !
Two words....Petrocommunications.
For the normal trader/investor, never make the mistake of judging the KSE market by looking at the KSE-100 index. KSE-100 index has 13% of the companies listed in the KSE...and these 13% companies make up for better than 85% of the market cap. Two of the 100 KSE-100 companies make up for 40% of the market cap.
OGDC (oil & gas dev) is flourishing because of increasing oil prices, and some new reserves having been discovered in Pakistan. With its 26% weightage in the index, it can drive the index up, even when the other 99 companies are down. Second is PTCL, (pak telecom) with its 14% leverage, which has been getting more capitalization, not because of better service, but because of tougher competition. These 2 companies can combine to turn a 200-points-down day into a 300-points-up day, and vice versa. Now add to the equation a few billionaire arbitrages, and thousands of sattay-baaz, and you have the KSE-100 index.
If youre looking for realistic investment, the cement sector, followed by the banking sector and auto sector provide much more promise than the jingoistic OGDC and PTCL.
Re: KSE’s frequent orgasms !
I knew something was fishy 
**KSE asked to be more vigilant: Market surge **
By Our Staff Reporter
KARACHI, Feb 10: Chairman Securities and Exchange Commission of Pakistan Dr Tariq Hassan has appreciated the positive contribution of Karachi Stock Exchange in adopting first generation reforms initiated by the SECP.
A press release issued by the KSE said that the SECP chairman visited the KSE along with Commissioner (Securities Market) Shahid Ghaffar on Thursday.
The SECP chairman addressed the newly-constituted KSE board of directors. The press release said that Mr Tariq Hasan commended the efforts of the Exchange in expeditious resolution of investors’ complaints and implementing SECP’s time-bound action plan to completely phase-out COT (badla) by June 2005.
Chairman KSE Board of Directors Yasin Lakhani highlighted the recent growth of the market and ongoing market promotional activities. He acknowledged the role of SECP in introducing series of reforms at the Exchange, which was one of the factors that contributed in the unprecedented growth of the market, Mr Lakhani said.
He requested the SECP chairman to allow comparatively more time to the KSE, in future, to formulate its views, on draft rules and regulations, pertaining to the share business. He observed that more frequent consultative process between the Commission and the KSE in the formation and strengthening of regulatory framework would supplement efficiency and accuracy.
While recognizing the role of KSE Board of Directors towards promoting governance and transparency in the market, Dr Tariq Hassan advised that the KSE itself, should adopt the Code of Corporate Governance, in its true spirit and become a role model for the entire listed companies, in respect of good and objective governance. He said that the prime task for KSE Board, in the year 2005, was to change the perception about market manipulation, market abuse and undesired speculation.
The SECP chief made emphasis on strict and stringent risk management measures, improvement and strengthening of existing market surveillance and control function at the Exchange. He said that risk management and market monitoring and surveillance, were the paramount management functions of the Exchange and being frontline regulator and Self Regulating Organization (SRO), the KSE should become more vigilant and alert in the present market surge.
He informed the KSE Board that the commission is contemplating to carryout a regulatory audit of the Exchange, to examine its performance in conducting its functions as a SRO and frontline regulator. Dr Hassan, while concluding, advised the Exchange to ensure timely completion of the process of demutualization and further assured fullest cooperation and support to the Exchange, in the areas of market development and introduction of new products.
KSE Managing Director Moin M. Fudda expressed his gratitude to the SECP for the continued guidance and support to the bourse. He assured the SECP chief that in 2005 the Exchange would continue to make all possible efforts to accomplish its short-term goals of promoting new listings, increasing the free-float of existing listed companies, promoting the best international practices and improving the operational efficiency and automation level of the Exchange.
Re: KSE's frequent orgasms !
AKIF said it all earlier hi :D
**
OGDC determines KSE index rise or fall
By Dilawar Hussain
**
KARACHI, March 12: The KSE index is flawed. Of the 100 shares in the index, as few as can be counted on finger tips of one hand can turn the tide one way or the other. Among them, share in Oil & Gas Development Company Limited (OGDC) stands out as the unchallenged giant.
Here is a sample: On Tuesday the eighth, KSE-100 index recorded historical highest single day rise of 355.20 points; the index galvanizing from 8863 to 9218.
Everyone cheered by the dizzy heights at which the Pakistani capital market had scaled. But was that so? That day shares in 386 companies came up for trading of which values in 59 remained unchanged. One would presume that all the remaining rose; that, though was not the case. If 165 shares gained value, almost an equal number (162) of scrip ended on the losing side. Looking at it another way: Investors in 165 shares made money out of their stocks that day while those in about an equal number went home, relieved of some of the cash.
Yet, the Index on March 8, posted the highest ever single day gain of 355 points. OGDC was not at its best that day and its value increased by Rs9.90. That meant its contribution of no less than 185 points to the index rise. How that figure has been worked out, would be discussed a little later.
If the index is flawed, one should scarcely be amazed by the deafening silence of the government; the corporate regulators and bigger stake holders; it suits them all. The great anomaly in the composition of index that shows the market soaring, when it is not, makes the government comfortable as the world watches mercury rising in the barometer (stock market) so as to prove the 8 per cent plus growth in the economy; it suits the Securities and Exchange Commission of Pakistan (SECP) the chief regulator for what else can be a clearer proof of the effectiveness of its first and second generation reforms; it suits the Karachi Stock Exchange (KSE) for if the index has already jumped 45 per cent in only two months and a half this calendar year, compared to a rise of 39 per cent in all of 2004, the bourse has a valid reason to proclaim to be the "best performing stock market in the world".
And of course it suits the stock broker fraternity for looking up at the index shoot through the roof, more and more small investors would run up to the market to make a quick buck. Would they lose their hard earned savings? May be, but the broker, nonetheless, would earn his commission either way.
So the KSE-100 index is blatantly unrepresentative of the market. All the parties criticised above (if they do indeed read this piece) are likely to come charging forward defending the Index and its fairness and transparency. But no one doubts the transparency of the index composition; just the methodology.
Generally speaking, KSE-100 is a market capitalization based index designed back in 1991. All the world has changed since. For fairer display of market performance, it is essential to study global trends. In many markets around the world, one or two stocks are not allowed to rule the roost. By contrast, at our KSE, one stock determines the path of the index: the OGDC.
An illuminating report prepared by analysts at Jahangir Siddiqui Capital Markets Limited explains how?
The Report notes that the bull-run at the local bourses started at the beginning of 2002 when the benchmark KSE-100 Index was at 1,273 points. Over the period 2002-2004, the Index has yielded an average annual return of 72 per cent and the year 2005 is the fourth year in a row of this bullish trend. However, this 2005 rally is abnormal in the way that the Index has already gained 3,356 points since December 31, 2004 - a 54pc increase.
The important feature in this rally is that it is not broad-based and the Index remains biased to one high cap stock. "OGDCL contributed two-third to the Index increase", say the JSCM analysts, adding that their calculations showed that OGDCL stood out as the major contributor accounting for increase of approximately 2,300 points (68pc) out of the overall 3,356 points jump since the beginning of the current calendar year. The share price of OGDCL in 2005 to date has surged by 117pc to Rs163. In comparison, KSE index has gained 54 per cent.
The analysts point out that based on current prices, the weightage of OGDCL in Index has gained 1,300bps to 33pc as against 20pc at beginning of the year.
The share of OGDCL in the Index since its induction in April 2004 ranged between 22-23pc up until Dec. 2004. JSML analysts have also calculated impact of movement in OGDCL's price on the KSE index. They explain this as follows: Presently in absolute term, keeping share prices of other 99 scrips as constant, a Re1 (0.6pc) change in OGDCL price causes Index to shuffle by 18-19 points (0.20pc). At the beginning of the year 2005 when OGDCL price was Rs75, a Re1 (1.3pc) change was causing the Index to change by 16 points (0.25pc). PTCL, PSO and NBP contributed approximately 17pc in the Index rise.
JSCML report maintains that the general perception among investors suggests that the recent rally has been evenly led by the top market capitalization companies including OGDCL, PTCL, PSO and NBP. However, a closer look shows that excluding OGDCL, the other three top capitalisation companies (PTCL, PSO and NBP having a cumulative share of 23pc in Index) have contributed only 570 points in the aggregate 3,356 points that the index shows to have gained since the start of the current calendar year.
Re: KSE’s frequent orgasms !
Some one stop it
**Karachi Stocks Cross 10,000 Points **
The Pakistani stock market broke the 10,000 barrier on Monday for the first time, cementing a 60 per cent gain in the KSE-100 index since the start of the year. The index closed at 9,998.05, up 4.1 per cent on the day, taking the increase for the month to 21 per cent. Its intraday peak was 10,000.31. This makes Pakistan the world’s best-performing stock market this year. The performance has been supported by economic recovery, privatisation success and plans for further sales of government assets.
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It looks good but … its too much, something artificial ?
Re: KSE’s frequent orgasms !
Hmmmph…aah..aah..aaah…oooooh… thanks..anyone got a cigarette? 
Re: KSE’s frequent orgasms !
^^
Re: KSE’s frequent orgasms !
Lost a little value today.. ooooh..hmmmmpfh…aah..
Re: KSE's frequent orgasms !
reminds me of this pain balm ad on indian tv....ooh....aah....ouch!
Thursday saw the market plunge deep....400+ points. Long overdue if you ask me. But old habits die hard. Friday saw the market plunge another 250+ points in the first session, only to make a comeback, and go up by 350 points at one stage, only to recede towards the end, ending the market 136 points lower. From -250 to +350, means an upward movement of 600 points took place within the span of 2 hours of trading. Margin traders no doubt led the charge, going on a buying spree to reduce their losses. But its insane. The market has added 4000 points this calendar year, and 2000 of those have been thanks to OGDC. The notion is that an increase in oil prices globally causes profits to rise for PSO, OGDC, PPL and POL. Unfortunately, what traders dont realize is that this argument is only eyewash. Global hike in oil prices means, PSO has to pay more to purchase its oil as well, so even though its profits may be going up by a fraction, they certainly dont warrant a 30 rupee jump in its stock. But oh well, put aside logic, and just settle down with the fact that this market does not follow logic. It is being used as a makeshift KSE-no.
Re: KSE's frequent orgasms !
well pakistan economy is flying high, thanks to musharaf and aziz, they have done an awsome job for it. just wait till KSE reaches 11,000 and it will be up there with the big guns (china, japan etc)
Re: KSE's frequent orgasms !
LSE has also gone passed 5,000 points, it would be good to have the 2 best performing SE's in pakistan :)
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And... ISE is going to Launch Sub Exchange in PESHWAR soon :)
GOOD NEWS for PESHWAR PPL ;)
Re: KSE's frequent orgasms !
The bubble is bursting. KSE is at 9000 again.
Re: KSE’s frequent orgasms !
Currently its…
**KSE 100 Index = **8698.88
Re: KSE's frequent orgasms !
/\ well as per the Reports it was expected.. they said.. that.. Its sort of MARKET TUNNIG UP :)
So.. Lets see... It might go up again... :)
Re: KSE's frequent orgasms !
^^ I'm pretty sure it will go up again. The main question here is: Where will the turning point be?