Market watch: Fertiliser stocks turn to gold as investors scramble to buy shares

KSE’s benchmark 100-share index surges 225 points.

KARACHI: Stock market surged to an eight-week high as investors tried to grab every fertiliser stock available in the market.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index surged 1.92 per cent or 225.03 points to end at 11,933.28 point level.

Fertiliser stocks were highly sought following domestic producer Engro increasing urea prices to overcome production losses due to gas outage to its new urea plant.

This gives the other three fertilizer players Fauji Fertiliser Company, Fauji Fertiliser Bin Qasim Limited and Fatima Fertilizer Limited advantage given their plants remain operational, said Elixir Securities equity dealer Nazim Abdul Muttalib.

All three company stock closed at their upper limit of the day as investors scrambled to pick up shares that may see an upward earnings revision.

Foreign institutional investors were net buyers of Rs160 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited. With the market anticipating a discount rate cut in Saturday’s monetary policy, urea price increase, oil marketing companies’ margin revision and lower than market estimate inflation have resulted in positive sentiment, said Muttalib.

Fauji Fertilizer Bin Qasim was the volume leader with 11.38 million shares gaining Rs2.92 to finish at Rs61.77. It was followed by Fatima Fertilizer Company with 9.2 million shares firming Re1 to close at Rs19.98 and Bank Alfalah with 8.53 million shares increasing Rs0.29 to close at Rs11.64.

Trade volumes almost doubled to 106 million shares compared with Monday’s tally of 56 million shares.

Shares of 376 companies were traded on Tuesday. At the end of the day 158 stocks closed higher, 133 declined while 85 remained unchanged. The value of shares traded during the day was Rs5.09 billion.

Published in The Express Tribune, October 5^th, 2011.