Weekly review: Fertiliser sector pulls the strings at bourse
Engro Corporation’s busy week keeps investors glued to updates.
KARACHI:
News flows relating to the fertiliser sector influenced the see-saw trend at the bourse during the week as the benchmark KSE-100 index rose 3.4% to 11,957 points.
Concerns over domestic political scenario and global economic outlook took a back seat as investors accumulated holdings in Engro at the start of the week on reports that the conglomerate increased prices of urea – a type of fertiliser – owing to gas shortage.
The prime beneficiaries Fauji Fertilizer and Fatima Fertilizer along with Engro Corporation traded at their upper limits on day one.
Midweek news that excise department officials reached Engro Fertilizer’s plant at Deharki and blocked any consignment to leave the plant resulted in investor interest dropping along with the bourse.
However, consignments started leaving the plant and Engro rolled back its price after the government intervened and talked about provisions of gas to the conglomerate’s new plant.
The quantum of the urea price hike was viewed with a pinch of salt and was interpreted by analysts as a pressure-tactic.
If this was not enough, Engro Corporation also announced its quarterly results during the week. All these reports ended up in the company’s favour as the stock price rocketed by 21% during the week, making it one of the highest gaining companies of the week.
Pakistan State Oil’s announcement of higher than expected quarterly profits and hopes of resolution to the circular debt resulted in the stock price surging 12% on a weekly basis.
Overall activity remained dull due to the long weekend ahead as average daily volumes declined by 2.5% to 73 million shares.
The last trading day saw the oil and gas sector jump onto the bull bandwagon as well on the back of reports that the conversion of power sector debt into Pakistan Investment Bonds had successfully materialised.
Furthermore, the market was also excited about the possibility of a large reserve find in Zin Block, which will be a positive for the largest weighted stock of the index Oil and Gas Development Company.
On the macro front, October CPI clocked in at 10.96% on a yearly basis, higher than market estimates. However, higher CPI had a negligible impact on secondary market yields.
Furthermore, S&P also affirmed Pakistan’s long term rating at ‘B-’ and short term rating at ‘C’, with a ‘Stable’ outlook.
As the corporate result season is behind us, the market will likely hunt for new triggers after the long weekend.
The market will open for only two days (Thursday and Friday) as the market will be closed for the first half of the week for Eid and Iqbal Day holidays.
Monday, October 31
The stock market continued its upward rally as investor interest rose on higher fertiliser prices and news of possible resolution of the circular debt. News that Engro raised urea prices by Rs400 per 50kg bag due to higher than expected gas curtailment invited some fresh buying that took the stock to its upper circuit breaker.
Tuesday, November 1
Investors opted to book profits as prices stood at elevated levels as the stock market gained 600 points in the last two trading session.
Fertiliser stocks led the selling amid contrasting performance as Fauji Fertilizer and Fauji Fertilizer Bin Qasim Limited underwent massive pruning to close down 2.2% & 3.2%, respectively. Meanwhile, Engro closed at its upper limit after it raised urea prices by Rs400 per 50kg bag on Monday to mitigate production losses.
Wednesday, November 2
The stock market closed lower after oscillating in the positive and negative territory throughout the session. Selling spree was witnessed today in fertiliser and oil stocks throughout the day.
Thursday, November 3
The stock market rose in a dull session with majority activity confined in the fertiliser sector. Investors switched positions by selling Fauji Fertilizer Company (FFC) – the highest traded share – and buying Engro Corporation – the second highest traded share – after the government restored gas supply to the plant and decided to work on ensuring sustainable provision of gas supply to the company.
Friday, November 4
The Karachi stock exchange seemed to get into the festive mood ahead of Eid holidays as all top 15 traded shares closed in the positive territory and only 24% stocks closed in the red. The bourse will be closed for five days from Saturday till Wednesday due to Eid and Iqbal Day holidays.
Published in The Express Tribune, November 6th, 2011.
News flows relating to the fertiliser sector influenced the see-saw trend at the bourse during the week as the benchmark KSE-100 index rose 3.4% to 11,957 points.
Concerns over domestic political scenario and global economic outlook took a back seat as investors accumulated holdings in Engro at the start of the week on reports that the conglomerate increased prices of urea – a type of fertiliser – owing to gas shortage.
The prime beneficiaries Fauji Fertilizer and Fatima Fertilizer along with Engro Corporation traded at their upper limits on day one.
Midweek news that excise department officials reached Engro Fertilizer’s plant at Deharki and blocked any consignment to leave the plant resulted in investor interest dropping along with the bourse.
However, consignments started leaving the plant and Engro rolled back its price after the government intervened and talked about provisions of gas to the conglomerate’s new plant.
The quantum of the urea price hike was viewed with a pinch of salt and was interpreted by analysts as a pressure-tactic.
If this was not enough, Engro Corporation also announced its quarterly results during the week. All these reports ended up in the company’s favour as the stock price rocketed by 21% during the week, making it one of the highest gaining companies of the week.
Pakistan State Oil’s announcement of higher than expected quarterly profits and hopes of resolution to the circular debt resulted in the stock price surging 12% on a weekly basis.
Overall activity remained dull due to the long weekend ahead as average daily volumes declined by 2.5% to 73 million shares.
The last trading day saw the oil and gas sector jump onto the bull bandwagon as well on the back of reports that the conversion of power sector debt into Pakistan Investment Bonds had successfully materialised.
Furthermore, the market was also excited about the possibility of a large reserve find in Zin Block, which will be a positive for the largest weighted stock of the index Oil and Gas Development Company.
On the macro front, October CPI clocked in at 10.96% on a yearly basis, higher than market estimates. However, higher CPI had a negligible impact on secondary market yields.
Furthermore, S&P also affirmed Pakistan’s long term rating at ‘B-’ and short term rating at ‘C’, with a ‘Stable’ outlook.
As the corporate result season is behind us, the market will likely hunt for new triggers after the long weekend.
The market will open for only two days (Thursday and Friday) as the market will be closed for the first half of the week for Eid and Iqbal Day holidays.
Monday, October 31
The stock market continued its upward rally as investor interest rose on higher fertiliser prices and news of possible resolution of the circular debt. News that Engro raised urea prices by Rs400 per 50kg bag due to higher than expected gas curtailment invited some fresh buying that took the stock to its upper circuit breaker.
Tuesday, November 1
Investors opted to book profits as prices stood at elevated levels as the stock market gained 600 points in the last two trading session.
Fertiliser stocks led the selling amid contrasting performance as Fauji Fertilizer and Fauji Fertilizer Bin Qasim Limited underwent massive pruning to close down 2.2% & 3.2%, respectively. Meanwhile, Engro closed at its upper limit after it raised urea prices by Rs400 per 50kg bag on Monday to mitigate production losses.
Wednesday, November 2
The stock market closed lower after oscillating in the positive and negative territory throughout the session. Selling spree was witnessed today in fertiliser and oil stocks throughout the day.
Thursday, November 3
The stock market rose in a dull session with majority activity confined in the fertiliser sector. Investors switched positions by selling Fauji Fertilizer Company (FFC) – the highest traded share – and buying Engro Corporation – the second highest traded share – after the government restored gas supply to the plant and decided to work on ensuring sustainable provision of gas supply to the company.
Friday, November 4
The Karachi stock exchange seemed to get into the festive mood ahead of Eid holidays as all top 15 traded shares closed in the positive territory and only 24% stocks closed in the red. The bourse will be closed for five days from Saturday till Wednesday due to Eid and Iqbal Day holidays.
Published in The Express Tribune, November 6th, 2011.