Despite positive news flow regarding price and volumetric variance in oil and gas, country’s largest listed sector having 40 per cent weight in KSE 100 index, has so far posted a negative return of 5 per cent in 2011. This 5 per cent return also includes the dividend. However, the sector has been able to outperform the benchmark KSE-100 index by one per cent, said the analysts at Brokerage Topline Securities.
“Foreign participants opting for risk aversion strategy on account of global economic uncertainty, stood as the primary reason behind this negative performance,” said Nauman Khan. “The strain Pak-US relationship, ambiguity on the political front, weakness in country’s economy and chronic circular debt, all augmented the negative sentiment.” Amongst 12 listed companies, only two companies, Attock Petroleum (APL) and Pakistan Oilfields (POL), have posted positive return of 40 per cent and 38 per cent, respectively, while all the rest provided a negative return to the investors. The worst performing stocks in the sector are Burshane LPG and Byco Petroleum (BYCO), which posted negative return of 44 per cent and 40 per cent, respectively, said the analyst. He said within the oil and gas sector, listed E&P sector (PPL, OGDC, POL and Mari) provided an overall negative return of 6 per cent in 2011YTD, which was in line with the benchmark return.
POL stood as the single company that posted positive return of 38 per cent in E&P sector amid subdued foreign holding and volumetric growth due to Tal block. On the other hand, Khan said OGDC and PPL that cumulatively contribute around 32 per cent to KSE 100, posted a negative return of 8 per cent and 9 per cent, respectively. “The former negative performance is primarily because of foreign selling, while the later remained under pressure due to expected additional supply after secondary public offering by GoP,” the analyst said. Khan said the oil marketing sector (three listed companies in KSE 100 index) posted a positive return of 11 per cent, thanks to 40 per cent return provided by APL. The other two, PSO and Shell, posted a negative return of 16 per cent and 5 per cent.
