KARACHI: Sell-off continued to be the move investors opted to take at the bourse on Thursday and the march downwards was led by the fertiliser sector.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.68 per cent or 95.90 points to end at the 13,936.92 point level. The bourse fell an astounding 377 points last week.
Panic was quite evident due to absence of buyers despite the availability of dividend yielding stocks, said Invisor Securities Senior Vice-President Hasnain Asghar Ali. Most retail investors stayed on the sidelines due to strong volatility in global markets and currency markets.
“Unconfirmed news regarding increase in taxation and reduction in subsidies for fertilisers forced the stocks to lose values,” added Ali.
Rumours suggest that the government is planning to increase gas prices by Rs105 per million British thermal units (mmbtu) to Rs300 per mmbtu which will have a negative impact on sector earnings. The fertiliser sector is unable to pass on the impact of rise in production cost due to availability of subsidised urea imported in the market courtesy of the government.
Trade volumes gained to 177.59 million shares compared with Wednesday’s tally of 176 million shares.
Bank AlFalah was the volume leader with 18.34 million shares gaining Rs0.12 to finish at Rs17.89. It was followed by TRG Pakistan with 15.88 million shares firming Rs0.18 to close at Rs4.4 and DG Khan Cement with 15.14 million shares increasing Rs0.71 to close at Rs42.08.
Foreign institutional investors (FII) were buyers of Rs890 million and sellers of Rs314 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited. FII’s were rumoured buyers in banking stocks while locals were sellers in fertiliser stocks.
News regarding increase in cement prices in the southern region of the country helped increase industry stock values. Lucky Cement rose Rs2.32 to close at Rs128.07 while DG Khan Cement climbed Rs0.71 to end at Rs42.08.
Published in The Express Tribune, May 25th, 2012.
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