Increase in floods loss estimates drags KSE down

KARACHI: Prices at the Karachi share market dropped on Thursday as investors opted to book profits in leading scrips after World Bank and Asian Development Bank raised flood loss estimates, dealers said.

“Intense profit-taking was witnessed at the local bourse as World Bank and Asian Development Bank raised flood loss estimates to $16 billion,” said Ahsan Mehanti, a director at Arif Habib Investments.

The KSE 100-share index lost 69.17 points, or 0.65 percent, to close at 10,634.99 points. The KSE 30-share index shed 67.76 points, or 0.66 percent, to end at 10,201.18 points.
Shares of 407 companies were traded, out of which 176 advanced, 209 declined, while 22 remained unchanged.


Analysts said that concerns over rising circular debt in energy sector, depressed†earnings announcements in blue-chip fertiliser and insurance scrips†because of losses caused by floods and rising fiscal deficit were the major reasons why KSE went down. There was strong interest in power sector stocks, however, because of tariff revisions.

Samar Iqbal, a dealer at Topline Securities, said that profit-taking in leading oil and banking stocks brought the index down. “Most of the results announced by companies including Engro, Fauji Fertiliser, Adamjee Insurance Company, and United Bank Limited were slightly below expectations due to which investors preferred to trim their position.”

Nishat Power Limited and Nishat Chunian Power Limited remained in the limelight and their share price continued to increase, he said.

Sara Shahid, an analyst at Elixir Securities, said that equities witnessed a mixed day, registering lowest volumes for the week so far with second-tier stocks dominating volumes. “Results failed to inspire any activity with Engro posting third quarter EPS of Rs2.56, down 39 percent on quarterly basis on account of high financial costs with cash payout of Rs2 per share. UBL lost ground despite posting nine-month EPS of Rs6.58, showing 27 percent increase.

FFC also announced its nine-month results, slightly off market consensus with EPS standing at Rs10.35 with interim cash dividend of Rs2 per share.”

With the exception of NBP, blue-chip counters failed to attract buyers as leading investors preferred to stay sidelined.

“With leading local institutions on the sidelines, foreign flows will determine the market’s direction. With results of some major companies due on Friday, stock-specific activity is likely,” Sara said.

The ready market volume declined to 109.934 million shares from 142.11 million in the last trading session. Highest volume was witnessed in NBP with trade of 12.173 million shares. The scrip lost Rs1.35 to close at Rs67.41.

It was followed by LOTPTA with trade of 11.386 million shares. It gained 17 paisas to end at Rs10.34. NPL was the third with trade of 7.942 million shares. It gained Re1 to finish at Rs15.56.