KSE-100 index: Closing bell

The KSE-100 index shed 12 points on Monday, October 17 to close at 11,976 points. After volumes had soared last week citing an expansionary monetary policy, they plunged down to 79 million, indicating that conditions are still not congenial for investors.

Unfavourable macroeconomic conditions overshadowed the government’s effort to attract investment last week and the trend continued into this week as well. Foreigner remained a net seller in the equity market, deterred primarily by the political unrest, declining law and order situation and power crisis.

The market took a dip on the announcement that gas supply to Engro, Dawood Hercules and Pak-Arab Refinery will be halted until further notice. Even though the raise in urea prices had made investment in the fertiliser sector favourable, this news initiated a selling spree in these companies.

Mr. Ali Nadeem, Manager of Equity Sales at First National Equities explained that this announcement will shift investment to the likes of FFC and Fatima Fertilizer, both of which finished positively on Monday. A raise in urea prices has increased margins for the fertiliser companies and profits are expected to soar in the next quarter. He added that a major reason for pressure on the index was a selling spree in Engro and this trend might continue for the next few days.

Attock Group announced its results today which instigated investment in Attock Petroleum and Attock Refinery. Attock Petroleum’s results were in-line with expectation and thus activity did not surge dramatically in the scrip. However, Ali asserted that Attock Refinery’s results exceeded market expectations and thus forced the scrip to close on the upper lock.

The government, in an announcement last week, banned export of petroleum products to Afghanistan and PPL seems to have suffered largely from this. Expressing his viewpoint on this situation, Ali expressed that PPL among the largest exporters of petroleum products and profits are likely to dip in the aftermath of this announcement.

Quarterly results of POL and PTCL are expected tomorrow in the second half of the trading session and Ali believes that anticipation of these results will be a major force in driving the market.

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Posted by Hammad Malik on Oct 17 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry