The KSE 100-share index last week crossed the third consecutive barrier of 7,500 points to close at 7,734. Investors continued to build long positions on selected counters under the lead of banks and energy shares , wherein the former had announced handsome dividend, including the bonus shares.

The index finally finished with 495 points or six per cent gain, lifting the market capital to a new peak level of over Rs2,100 billion ($40 billion). This made the local bourses more attractive for foreign funds.

All previous records, both in terms of index level and market capital were surpassed and analysts failed in giving any specific reason behind the sustained run-up and the expected dividend and bonus shares declared by some leading banks such as the MCB, the Soneri Bank, the Union Bank, the Picic Bank, the Picic Growth Fund and several others.

Technical correction, long overdue in a highly overbought market, was nowhere in sight as bulls and punters were out to push the index to their next target of 8,000 points and then to take a technical breather or a pause on how to behave beyond this level.

"The market could have shed about 200 to 300 points but it appeared pretty difficult to pull it down from its current level", some brokers predicted adding, "signing of a number of deals with the visiting delegation and talk of a free-trade agreement with Malaysia was billed as another morale booster in addition to higher corporate payouts".

Apart from the new index level, the single-session volume figure also soared to a billion-share-mark for third time during its trading history, close to the highest and second highest figures so far at 1.122 billion and 1.029 billion at 1.128 billion, as both the OGDC and the PTCL were again massively traded on higher side.

The billion figure share mark reflects that the market had pulled out from the state of uncertainty on the strength of an all-round buying, leaving behind the lean period when the single session volume had dropped to an all-time low of 15.141 million shares on September 3, 2001. But a leading stock analyst predicted that it could be the end of current buying euphoria as the market could pass through a technical correction of about 200 points beginning from late Thursday session.

The index finally finished to close at 7,600 as compared to 7,239 points last week reflecting the strength of leading bank shares, notably the PTCL, the OGDC, the PSO and some other energy and cement shares.

It has now left behind the Mumbai industrial index by more than 800 points which some months back was trailing behind it. This reflected the market conditions. It was being quoted around 6,750 as compared to the KSE's 7,500 points.

The gap between the two Subcontinent indices was expected to widen further as the KSE was virtually galloping to its newly set target of 8,000 points due to massive money flows, brokers said.

"There was the talk of an overbought market, and the fears of a big technical shakeout any day", some analysts said "but the market continued to defy all predictions despite being in highly overbought position".

Essentially, the current sustained run-up was not only dividend-driven it was aided by some other positive factors, including massive buying by the financial institutions which have a lot of idle funds to go for share business.

Two leading companies, the Muslim Commercial Bank and the Pakistan Oilfields announced their working results which were in line with the predictions. But the omission of interim dividend by both disappointed the investors. The EPS of the former was around Rs.7.53.

However, on the other hand, the Askari Bank gave a pleasant surprise to its shareholders as it enhanced the bonus shares to 20 per cent from 10 per cent and came out with a maintained cash dividend of 10 per cent.

Energy and cement shares led the market advance followed by leading stocks on other counters, notably the bank and textiles as working results of most of them were due during the next couple of sessions.

Among top gainers were the Treet Corporation, the PPL, the Grays of Cambridge, the Pakistan Oilfields, the Allawasaya Textiles, the Millat Tractors, the PNSC, the MCB, the Bank of Punjab, the Mari Gas, the PSO and many others.

Losers were led by the Valika Art Fabrics, the Pakistan Refinery, the Rafhan Maize, the Best foods, the Wyeth Pakistan, the Aventis, the Lakson Tobacco, the Thal, the AKD Securities, the Gatron Industries, the Shafiq Textiles and many others.

FORWARD COUNTER: All leading speculative issues posted one of the best weekly gains under the lead of the PPL and the Pakistan Oilfields followed by the OGDC, the MCB, Nishat Mills, the Engro Chemical, the PTCL, the Sui Northern Gas and several others. All finished the week at their career-best level on strong speculative support aided by the reports of higher earnings.