Market watch: Stock market falls as raise in power tariff delayed

Benchmark KSE-100 index down 37 points.

KARACHI: The stock market fell after holding out against the bears for two days as the Supreme Court’s challenge of the rollback of power subsidy stopped the bull-run in the exploration and production sector, who sought to benefit from this through restricting circular debt.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.17% or 37.32 points to end at 22,152.35 point level.

“Pakistan equities started the day on a mixed note and traded volatile throughout with thin volumes, finally settling 37 points below previous close. Oil names remained active on heightened local interest, with Oil and Gas Development Company (OGDC PA +1.3%), Pakistan Petroleum (PPL PA +0.2%) and Pakistan Oil Fields (POL PA +0.6%) closing on gains, while Hub Power Company (HUBC PA -1.1%) and Pakistan State Oil (PSO PA -1.7%) traded volatile after the Supreme Court granted two days to the Federal Government to review the recently increased power tariff,” said Fareesa Baig of Elixir Securities.



“Fertiliser manufacturers Fauji Fertilizer (FFC PA +2.1%) and Fauji Fertilizer Bin Qasim (FFBL PA +2.8%) gained strength over expectations of increased offtakes due to the upcoming wheat sowing season. Meanwhile cements were upbeat with DG Khan Cement DGKC PA +1.7% and Lucky Cement LUCK PA +0.7% after the recent price hike, which is believed to not have been fully incorporated in the market price”, Baig added.

“The supreme court decision to give the government two days to rethink the recently announced increase in power tariff also threw a spanner into the works as a rollback will not mean well for the circular debt situation plaguing the energy sector. The oil and gas sector gained led by OGDC (+1.33%) as a bounce back in international oil prices and demand for currency hedge plays pushed the stock up,” said Ovais Ahsan of JS Global.



Trade volumes fell to 102 million shares compared with Wednesday’s tally of 133 million shares.

Shares of 344 companies were traded on Thursday. At the end of the day 121 stocks closed higher, 195 declined while 18 remained unchanged. The value of shares traded during the day was Rs4.9 billion.

TRG Pakistan Limited was the volume leader with 11.6 million shares gaining Rs0.33 to finish at Rs10.10. It was followed by Telecard Limited with 7.9 million shares losing Rs0.03 to close at Rs6.07 and DG Khan Cement with six million shares gaining Rs1.24 to close at Rs73.08.

Foreign institutional investors were net buyers of Rs133 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, October 4^th, 2013.

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