Market watch: Bourse nosedives on across-the-board selling

Benchmark share index sinks 195 points with Engro leading the way.

KARACHI:

The Karachi bourse witnessed across-the-board selling on Monday, sparked by Engro that fell to its lower limit for the day on uncertainty over gas supply.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index plummeted 1.58 per cent or 195.34 points to end at 12,165.98 points.

Initial sentiments at the market took a hit after Engro Corporation’s stock touched its lower limit in early trade on reports of foreign fund selling, said Topline Securities equity dealer Samar Iqbal.

Engro, the volume leader of the day, fell by its maximum five per cent limit to close at Rs168.9. Engro’s stock has fallen by eight per cent in the last two weeks because of uncertainty over gas supply to its new $1.1 billion plant, the world’s largest single train urea fertiliser manufacturing facility.

Major oil, banking and fertiliser stocks closed in the red on rumours of offshore investor selling in Engro.

Foreign institutional investors were gross sellers of Rs190 million and gross buyers of Rs210 million during the first trading session of the week, according to data compiled by the National Clearing Company of Pakistan Limited.

Moreover, with no hope of any change in capital gains tax collection methodology for individual investors in the amended finance bill, it caused small investors to exit the market, added Iqbal.

Trade volumes rose slightly to 51 million shares from Friday’s tally of 48 million shares but still stood at a paltry level.

Among oil stocks, Pakistan Petroleum edged lower by 1.2 per cent despite an emergency board meeting scheduled for Tuesday (today) in which the company is expected to announce an early cash dividend of around Rs7 to Rs8 per share.

Additionally, investors awaited a meeting between the Securities and Exchange Commission of Pakistan and KSE board where participants expect relaxation in margin trading rules for individual investors.

Shares of 344 companies were traded on the first trading session of the week. At the end of the day, 35 stocks closed higher, 213 declined and 96 remained unchanged. The value of shares traded during the day was Rs2.7 billion.

Engro was the volume leader with 6.84 million shares. It was followed by Lotte Pakistan PTA with 3.13 million shares, losing Rs0.39 to close at Rs14.22 and Jahangir Siddiqui and Company with 2.98 million shares, declining Rs0.63 to close at Rs6.7.







Published in The Express Tribune, June 21^st, 2011.