Market Watch: Stellar earnings fail to excite investors

KSE’s benchmark 100-share index drops 77 points.

KARACHI: The stock market started the week on a negative note as investors opted to sell despite corporate giants posting healthy profits.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.65 per cent or 77.21 points to end at the 11,883.01 point level.

Investors booking profits at higher levels after record profit announcements by Lucky Cement and Fauji Fertilizer and this pulled the benchmark index lower, said Arif Habib Corporation Director Ahsan Mehanti.

Trade volumes fell to paltry level of 67 million shares compared with Friday’s already dismal tally of 76 million shares.

Almost a quarter of the total trading at the bourse was witnessed in Fauji Fertilizer Company as it accounted for 23% of the total KSE-100 volumes.

This urea manufacturer announced a two-fold increase in earnings due to higher urea prices and no gas curtailment. FFC profits rose 104% to Rs22.49 billion in 2011 amid a surprise 50% stock dividend, which will likely keep interest alive.

Meanwhile, Lucky Cement declined 1.2% on profit taking after announcing half-yearly earnings that also showed doubled on higher prices.

The stock market is expected to remain volatile in days ahead while volumes will remain in select stocks that are due to announce results in the coming days.

Fauji Fertilizer Company was the volume leader with 12.95 million shares gaining Rs0.91 to finish at Rs187.08. It was followed by Jahangir Siddiqui and Company with 6.50 million shares declining Rs0.34 to close at Rs5.30 and Fauji Fertilizer Bin Qasim with 4.50 million shares losing Rs1.82 to close at Rs46.36.

Foreign institutional investors were buyers of Rs218 million and sellers of Rs204 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.

Shares of 304 companies were traded on the first trading session of the week. At the end of the day 60 stocks closed higher, 169 declined while 75 remained unchanged. The value of shares traded during the day was Rs4.99 billion.

Published in The Express Tribune, January 31^st, 2012