KSE-100 down amid foreign selling; gas price weighs

Karachi stock market traded weaker on Tuesday as investor appetite was dampened by a likely increase in gas prices for key fertiliser and cement sectors, with further foreign-selling dragging down the benchmark index almost one percent, dealers said.
Traders said some foreign investors may be booking profits after recent rally. The kind of run-up and valuation makes sense for some foreign funds to book profits and move over, they added.
“Downward momentum remained intact as continuous foreign selling induced local investors to book profits to preserve liquidity,” said analyst Ahmed Saeed at JS Global Capital.
The KSE-100 shares index shed 293.98 points or 0.89 percent to close at 32,566.59 points. KSE-30 shares index lost 258.70 points or 1.21 percent to end at 21,128.93 points.
As many as 354 scrips were active, of which 65 advanced, 266 declined and 23 remained unchanged.
The ready market turnover improved a bid to 132.469 million shares as against 99.934 million shares a day earlier.
Ahsan Mehanti at Arif Habib Commodities said bearish activity was witnessed amid consolidation on weak earnings outlook.
“Likely negative impact of expected raise in gas tariff next month on fertilizer, cement and textile sector stocks led the bearish rally at KSE despite strong economic outlook on expected approval of IMF $522 million tranche this month on improving economic performance,” Mehanti said. “Weak global stocks and commodities played a catalyst role in bearish activity post major earnings announcements.”
The cement and the fertilizer stocks led the market’s decline as a 16-64 percent proposed increase in gas tariff will hit profitability of both sectors.
The major laggards were Fauji Fertilizer (FFC) down 3.0 percent and Fauji Fertilizer Bin Qasim (FFBL) was down 4.9 percent in the fertilizer sector while Maple Leaf Cement (MLCF) was down 3.9 percent, Kohat Cement was down 2.8 percent and Attock Cement (ACPL) was down 2.6 percent.
Samar Iqbal at Topline Securities said another bearish session was seen at the Pakistan stock exchange with share price falling continuously.
Compared to last three-month average daily volume of 250 million shares, day’s volume was at 132 million shares.
“There are indications that the regulator has some objections with few local brokers regarding their net capital balance that determines their capacity to trade in the market. As a result, overall participation has reduced in the market,” Iqbal added.
Fertilizer stocks fell as investors sold their position since they believed that higher gas price will affect fertilizer firms profits if prices are not passed on to the farmers.
Highest volumes were witnessed in Pak Elektron (PAEL) with a turnover of 12.6 million shares, the scrip shed Rs2.75 to close at Rs52.43.
It was followed by Fauji Fertilizer Bin Qasim (FFBL) with a turnover of 11.554 million shares. It lost Rs2.75 to end at Rs53.17. Jahangir Siddiqui Company Limited (JSCL) was the third with 9.136 million shares. It lost Rs0.95 to finish at Rs16.87 per share.