Index loses 462.84 points

Bearish trend was witnessed at Karachi share market during the week ended on October 22, 2011 and the KSE-100 index declined by 462.84 points to close at 11,525.25 points. Heavy foreign outflows and investors'' concerns over the prevailing gas shortage for the fertiliser sector and rumours regarding decrease in urea prices invited heavy selling and the index declined by 3.86 percent.
A massive outflow of $67 million from Pakistan''s equity market was witnessed as compared to previous week''s outflow of $2.9 million. Xenel Industries of Saudi Arabia, co-founder of Hub Power, sold its 12 percent shareholding in Hub Power, leading to a one-off foreign outflow of $60 million.
Trading at the ready counter remained very low and the average daily volume declined to 86.11 million shares, or by 31.3 percent, as compared to previous week''s 125.29 million shares.
Market capitalisation declined by Rs 128 billion to Rs 3.018 trillion.
On Monday, the market opened under pressure and the index lost 12.54 points to close at 11,975.55 points with volume of 79.474 million shares.
On Tuesday the index witnessed decline of 63.36 points to close at 11,912.19 points with 81.147 million shares.
On Wednesday, the index registered a heavy loss of 271.73 points and closed at 11,640.46 points with 112.420 million shares.
On Thursday, on the back of investors'' interest on dips the index recovered 44.69 points to close at 11,685.15 points with 75.406 million shares.
On Friday, the investors again opted for selling and the index declined by 159.90 points to close the week at 11,525.25 points with 82.123 million shares.
Yawar Uz Zaman, an analyst at InvestCap, said that despite solid corporate results the market sentiment remained unchanged and the index declined by 3.86 percent on week-on-week basis. Investors remained worried about the prevailing gas shortage for fertiliser sector (which is expected to become worse in the coming winter) and rumours regarding decrease in urea prices.
He said that position on economic front was also not well as the import bill shot up by 44 percent on year-on-year basis, mainly on account of higher oil and food bill, which placed current account into deficit of $1.2 billion, up 49 percent on quarter-on-quarter basis in September 2011, which was primarily fuelled by much lower remittances realised during the month.
Across the board selling was observed on the second day of trading after a huge foreign outflow of $60 million, where Saudi based foreign company sold Hubco shares to one of the private sector. However, fertiliser offtake shot up 38 percent on month-on-month basis in September 2011, while textile exports showed some improvement and crossed $3 billion, up 10 percent on quarter-on-quarter basis as compared to $2.8 billion in the same period last year.
Average traded value during the week stood at $63 million, down 10 percent on week-on-week basis and average traded volumes were at 86 million shares, down 31 percent on week-on-week basis.
Naveed Tehsin at JS Global Capital said that the continuing global crisis and stern messages from US Secretary of State, Hilary Clinton overshadowed the impressive corporate results. The exceptional results of POL and ATRL posting a respective 55 percent and 53 percent rise in profits on year-on-year basis were unable to stir the market sentiment.
The fertiliser sector remained in the limelight throughout the week as initial news reports suggested that gas supply to SNGPL network powered plants will remain suspended throughout the week. However, a ruling by the Sindh High Court came in later during the week which directed SNGPL to supply 100 mmcfd gas to Engro''s new plant - speculating a downward revision in the urea prices. Hence, the sector came down by 5.1 percent during the week, led by Engro and FFC, down 13.7 percent and 5.4 percent, respectively.
The much awaited ground breaking of $12 billion Diamer-Bhasha dam project was performed by the Prime Minister during the week. However, financing matters are still to be resolved. The cement sector is expected to be a major beneficiary from this project, he added.