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KSE index off 2.5pc on selling in oil shares

KARACHI - Pakistani stocks on Thursday failed to extend the snap overnight rally on hasty selling in the leading oil shares followed by reports of cap on oil marketing companies margins and cut in duty to 7.5 per cent from 10 per cent. The KSE 100-share index shed 269.44 points at 10,583.58.

The interesting feature of the new government move was that saving of Rs4.00 per litre on freezed margins will not be passed on to the general consumer but will be used to shore up the budget deficit, analysts said.

The market decline was further accelerated by reports that excise duty and sale tax on the cement sector will be further increased followed by near-panic selling on this counter, they added.

The market has demonstrated more than twice that it could respond favourably to any positive news instantly as it did a earlier discounting negative impact on the share business in discount rate hike of one percent to 13 per cent, said a leading analyst.

He said there was a loud whipering in the market about the cap on margins of the oil marketing companies(OMCs)for the last couple of sessions but its details released yesterday seem to have sent shock waves among the oil giants, notably PSO, Shell Pakistan and Total followed by refiners.

According to analysts' calculation the negative impact on the profitability of the OMCs is expected to be around eight per cent.

The KSE 100-share index suffered a fall of 2.48 per cent or 269.44 points at 10,583.58 as compared to 10,953.02 a day earlier as all the leading base shares fell under the lead of MCB, National Bank, Engro Chemical and Arif Habib Securities.The KSE 30-share index was off by 403.58 points or 3.25 per cent at 12,001.67.

"There could be technical flutters here and there,the basic fact is that any rally will prove short-lived as investors are not inclined to take long positions owing to political uncertainty and negative news from the FATA", most analysts believe.

Low volume, either-way price changes on selective counters reflects that investors are just marking time apparently awaiting the signals from the fund managers to resume normal activity, they said.

International Industries, which came out with a good payout(15 per cent casg, 20 per cent bonus and 25 per cent right), again came in for active support and rose further by Rs5.65 followed by Javedan Cement, up by Rs4.30.PSO and Shell Pakistan led the losers, off Rs19.65 and 19.00 respectively.

Trading volume was maintained around the overnight level of 116 million shares but losers forced a strong lead over the gainers at 230 to53,with 12 shares holding on to the last levels.

Arif Habib Securities came in for active selling and led the list of actives,off Rs7.03 at Rs133.67 on 12 million shares, followed by NIB Bank, lower by 87 paisa at Rs9.88 on 9 million shares, National Bank, off Rs6.30 at Rs119.74 on 8 million shares, Bank of Punjab, up by Rs1.50 at Rs31.63 also on 8 million shares, OGDC, lower by Rs2.20 at Rs115.30 on 6 million shares, United Bank, steady by five paisa at Rs78.80 on 5 million shares, MCB, off Rs7.25 at Rs271.00 on 3 million shares and Engro Chemical,lower by Rs10.99 at Rs208.96.