Stocks fall as ECC defers gas price hike, circular debt decisions

Stocks fell on Wednesday as fresh selling ensued in blue-chip oil and energy shares over burgeoning circular debt and the Economic Coordination Committee (ECC) decision to defer hike in gas prices, dealers said.

Salman Ahmed, head of equity sales from Abba Ali Habib Securities said, “The market was expecting an increase in gas price, while PSO demanded releasing Rs65 billion, (decisions that were deferred by the ECC).”

The market was also under pressure owing to roll over week, which trimmed the share prices, Salman added.

The new government held its first ECC meeting on Wednesday, chaired by PTI’s fresh Finance Minister Asad Umar.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index fell 0.69 percent or 295.03 points to close at 42,249.44 points. KSE-30 shares index lost 0.97 percent or 203.97 points to end at 20,861.21 points.

As many as 390 scrips were active, of which 96 moved up, 266 retreated, and 28 remained unchanged. Ready market volumes stood at 134.791 billion shares as compared with the turnover of 183.665 billion shares in the previous session.

Shumaila Badar, head of research from Ismail Iqbal Securities said the market remained under pressure throughout the session mostly because of ECC’s meeting, wherein a proposed hike in gas tariffs was to be discussed. News released in the second half of the day that ECC has deferred its decision on gas price and there was no significant relief. She said that earnings season also failed to create excitement. Cherat Cement hit its lower lock as it announced earnings of Rs12.07/share for FY18. Similarly, Saif Power declined after posting earnings of Rs1.96/share for the quarter ended June 2018. “We expect the market to continue under pressure,” she added.

Sui Northern slipped Rs2.80/share, while Sui Southern Gas fell 40 paisa/share on gas price deferent. OGRA proposed price hike between 30 percent and 186 percent for all sectors consuming 100 mmbtu to 300 mmbtu.

Oil sector also witnessed fresh selling pressure on account of circular debt, with Pakistan Petroleum down Rs2.67/share, Hascol down Rs4.26/share, and Pakistan Oilfields down Rs7.09/share.

The highest gainers were Nestle Pakistan, up Rs485.00 to close at Rs10,560.00/share, and Pakistan Tobacco, up Rs106.75 to finish at Rs2,241.80/share.

Companies that booked highest losses were Bata Pakistan, down Rs53.00 to close at Rs1,812.00/share, and Island Textile, down Rs48.00 to close at Rs1,265.00/share. Unity Foods Limited recorded the highest volumes with a turnover of 9.242 million shares. The scrip gained Rs0.73 to close at Rs43.62/share.

The lowest volumes were witnessed in Fauji Cement, recording a turnover of 3.666 million shares, the scrip lost Rs0.41 to end at Rs25.24/share.