Just few months ago when SBP decided to restrict money supply again, there was a lot of concern in the market and market at that time was trading at 10,000 level. Many thought that market will take correction but that just didn't happen, infact, market surged by 20% and today it breached 12,000 level after more than two years. I still remember technical analysts were still bullish at that time and it seems they proved to be right.
Actually, we need to see our region first, all regional countries like China, India, Sri Lanka, Bangladesh are trading at a multiple of 16-24 while we are still around 8-10 region. So the foreign investors who can borrow Euro/Dollar at just 1%-2% rate found our market attractive. Remember our Rupee is very stable and it is expected to remain atleast for one year so the foreginers can invest with confidence.
Finally, also note the key point, our multiple hasn't changed much despite market upsurge. Why? Mathematically, denominator of "P/E" which is earnings also kept increasing and this has kept market multiple downward and still at 8-10 range which is still at a very discounted value.
The conclusion is that "true fundamental investors" were not wrong and they expected this market upsurge and in fact there is still upside remaining as per them. I also consider myself as a fundamental investor and I will very soon come up with market range for the year 2011 very soon as my upper range for 2010 was "11,200" and market has already breached this level.