. .


  1. Stock market at a glance
  2. Finex week
  3. Stock Watch

May 01 - 07, 2000

Though only two oil marketing companies are listed at the Karachi Stock Exchange, they have always remained in lime light. The third oil marketing company, Caltex Pakistan, is not listed at any of the stock exchanges. Although Attock Refinery was given the permission to establish an oil marketing company, no progress has been made as yet. The trading in Pakistan State Oil has lately remained a little volatile due to rumours that NIT may sell some large lots of its holding in the Company. Shell Pakistan again witnessed a major buying spell when the parent company bought Shell Pakistan shares at a premium but soon after trading volume reduced significantly.

Pakistan State Oil Company (PSO) is expected to witness an increase in profit, for the year ending June 30, 2000 due to significant gains on inventory as well as increase in sales as some other IPPs have commenced operations. However, the expected increase will be partially off set due to reduction of furnace oil purchase by KESC. The utility has completed conversion of some of the units of Bin Qasim thermal plant from oil to gas. At the same time, financial charges of the company are expected to remain low due to resolution of intercorporate debt in the energy sector.

In terms of operational efficiency two factors, appointment of Shaukat Mirza as new managing director and reorganization of the marketing department, will help in improving corporate governance. PSO has also started revamping its retail outlets to contain loss of its market share to Shell. While the fundamentals for the Company have not changed in any significant manner, PSO share price is expected to remain volatile mainly due to the activities of some large retail groups. These groups are in a position to move the share price in either direction.

Shell Pakistan is blue of the blue chips. However, lack of recent interest is due to a rather small market float. This has resulted in under performance of the scrip. The large activity in the recent past was attributed to purchase of a large block of shares by the parent company from NIT at a premium. Analysts forecast for a profit growth of more than 20 per cent. Given the MNC status Shell is always expected to remain part of core investment portfolio for medium and long term investors. The higher profit of the company, in the recent past, was due to increase in its market share as well higher sales volume of lubricants — deregulated products.

D. G. Khan Cement is yet another company belonging to cement sector which has witnessed an increase in trading volume of shares as well as increase in its share price. While many analysts understand that the sector fundamentals may have improved, the current interest is based on a forecast for higher capacity utilization, which already touches 70 per cent, in the near future. Higher sales are achieved mainly due to location of the plant. Cement consumption is the highest in the adjoining areas. The profit for the whole year is expected to be higher due to reduction in financial charges as well as merger of the captive plant. Though, the Company has declared profit for the half year, it was mainly due to reversal of some of the provisions made in the past. The Company had posted loss of over Rs 560 million for the year 1998-99 which is expected to come down to Rs 50 million for the current year. The forecast is that in the post year 2001 period, keeping other factors constant, the Company will start making modest profit. The buying interest has already pushed the price from Rs 8 to Rs 14 per share.

Muslim Commercial Bank has moved as per expectations. Though, the share price has gone up, the scrip is still selling at a slight discount to its fair price. The Standard Chartered Bank and ANZ Grindlays Bank merger has once again made people believe that Bank of America operations in Pakistan can, most probably, be taken over by a bank like Muslim Commercial Bank.

HUBCO share prices once again started showing undesired surges. While some analysts attribute this to the court decision regarding KAPCO, many analysts fail to understand the delay in resolving the tussle between HUBCO and WAPDA. Apparently, all the HUBCO stakeholders understand the need for reaching an amicable and mutually acceptable resolution. Some of the analysts attribute the delay to involvement of some other 'interest groups' — making large gains due to price volatility. At the same time many analysts fail to understand WAPDA's stand regarding tariff and suggest that corruption cases should not over-shadow tariff negotiations.





Turnover (Share Mn)

Closing Price

D.G. Khan





Pakistan State Oil





Shell Pakistan





Muslim Commercial Bank