ISLAMABAD, 13 December 2004 — Can the big boom at the bourse continue escalating in the foreseeable future?
Financial market sources and stock market analysts say “yes,” though it may be punctuated by some corrections. But, the way it really moves from this point of time, is yet to be seen. The Karachi Stock Exchange Index-100 soared to a historic record of 5,738.49 on Thursday, after Prime Minister Shaukat Aziz’s boom-triggering address to KSE on Dec. 3. The previous record high was 5,620.66 seen on April 19, 2004. This time around, KSE-100 shot beyond the hoped for 5,600 and then crossed even 5,700 barrier, the same week. It sent a word of cheer across the financial market. The market capitalization also rose to Rs.1,594.630 billion ($26.577 billion) from Dec. 3 level of Rs.1551.736 billion.
This week’s KSE spiral, besides the prime minister’s address to the bourse, was also attributed to President Pervez Musharraf’s meeting with President George W. Bush in Washington, as well as Prime Minister Tony Blair in London, and President Jacques Chirac in Paris, that gave out the signal of a still greater warmth and closeness in US-Pakistan and EU-Pakistan relations.
There also is the view hat the present hype of business boom emanating from the hoped for warmer US-Pakistan relations is more than genuine and thought up by the punters at the bourse. Countering these views, some of the bourse “bigs” have already started talking of the KSE index moving up to even 6,000 in “the next few weeks.” Domestically, the bourse expects good corporate cash dividend announcements within weeks, higher returns on investment, grant of bonus shares and capital gains, all are adding a push to the Index. Surprise of all, some of the weak textile mills, too, are announcing cash dividends and bonus shares. Sounds too good? But, let’s see how things turn up?
KSE has also asked Aziz to arrange a faster listing of state-owned companies on the KSE to expand the market cap of the bourse.
Off the bourse, things seem to be looking up, too. The Security & Exchange Commission of Pakistan (SECP), for instance, reports that 194 new companies were registered with it during November this year, up from 128 companies in November, last year.
It raised the overall number of companies at work in Pakistan as on Nov. 30 to 44,810. Of these companies, 2,807 are public, 40,397 private, 178 single-member, 504 associations and limited by guarantee, 578 foreign, and five with unlimited liability. The commission reports that 191 new registered companies have a paid up capital of Rs.1.721 billion.