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THE KASB REVIEW
STOCK MARKET AT A GLANCE
  1. Stock market at a glance
  2. Finex week
  3. Stock Watch

Updated on 01 May, 2000

The week opened on a firm note at 1991.66, and managed to break through 2000, but ultimately failed to sustain above that level, indicating strong downward selling pressure. As a result, the market fell back to close on a negative note at 1901.07, a drop of 4.6% over last week's closing. However, it is significant to note that an important level of 1950, which had become a major level of support for the past couple of weeks was breached.

Increased selling pressure could very well be attributed to the Kapco issue. Though the pressures had been felt for the last two days, it was heightened today by a rumor that pervaded the market regarding a drop in PSF prices. Even though the rumor could not establish itself, the buyers' lack of interest not only brought down the sector prices, that had lately been performing very well, but dragged the entire market down with it.

Anticipating that the negative sentiment of the market will carry forward, we expect further weakness in the stocks in the early part of next week. Meanwhile, support should emerge in the band of 1800- 1850, while the market will technically remain in an oversold position.

Therefore, we advice that bargains based on values should be looked into while the market is in its depressed state. Blue chips have already taken huge dips. Resistance is seen at levels of 1925, whereas support is somewhere around 1850, with major support being at 1800.

Sector Outlook

PTCL: Entering a new phase

PTCL Renews Focus

Given the realization by PTCL of the need to focus on value added services, instead of sticking primarily in fixed line telephony, the company announced the setting up of two its wholly owned subsidiaries. Pakistan Telecom Mobile Company, the cellular unit and Paknet, an ISP

Cellular users still low regional comparisons.

The cellular industry continues to be in its initial growth phase. The total size of the cellular market is around 0.3 mn users with the market share being divided between the following three players.

Furthermore, there is immense growth potential in this line of business. Though the initial years were marred with suspension in service between 2nd July 1995 and 19th Jan 97 in the port city of Karachi, the commercial hub, growth rate after 1997 has been climbing steadily. From .15 mn users in 1997, reported number of users has jumped to the .30 mn mark translating into a 90% growth. Going forward we believe that the growth potential remains strong.

This growth rate is likely to be further strengthened if the mobile companies are able to convince the Pakistan Telecommunication Authority (PTA) to introduce the Caller Party Pays (CPP) option. Under this arrangement instead of the mobile phone carrier paying for any incoming calls thus inhibiting him to restrict his incoming calls, any user calling from a fixed line telephone pays for calling a mobile number and the revenue is shared between the fixed line telephone carrier and the mobile phone company under an inter-connectivity agreement.

We are upgrading our ARPU based on the new numbers reported by the various companies. With annual billing nearing the 10 mn mark and the estimated users at around .3 mn we have arrived at an average revenue per user of PRs 2367 per month.

Any such arrangement will result in massive volumes growth, both for the fixed line operator and the mobile company. Under this option as the incoming calls become free, the need to restrict incoming calls will minimize and correspondingly a larger proportion of the expected 3.5 mn ALIS users will be able to call through fixed line telephony to mobile phone.

PTML envisages a network and service that is competitive and still a service largely afforded not only by the upper income bracket population but also penetrating the lower rungs of the income bracket as well.

As per the increase in the ARPU, we are also revising our revenue potential from the cellular operations of PTCL.

Given the nature of this business, PTCL had created this wholly owned subsidiary. This would result in lowering the inefficiencies associated with PTCL and starting off afresh. Finally as the question of management comes up, it is heartening to note that the current PTML team is made up of individuals from the existing cellular industry, therefore apart from possessing industry experience, they hold privileged information regarding the existing players.

Cellular revenues thus possess the potential to be the lifesaver for PTCL under a competitive pricing environment after 2002 making it imperative for PTCL to expedite the launch of this service.

 MARKET ROUNDUP

 

Last week

This Week

% Change

Mkt. Cap(US $ bn)

9.74

9.36

-3.90

KSE 100 Index

1991.66

1901.07

-4.548%

Total Turnover (mn shares)

1438.82

1429.28

-0.66%

Value Traded (US$ mn.)

923.82

944.92

2.28%

No. of Trading Sessions

5

5

 

Avg. DlyT/O (mn. shares)

287.76

285.86

-0.66%

Avg. Dly T/O (US$ mn)

184.76

188.98

2.28%

MSCI Pakistan Index:

     

Pak Rs.

147.08

145.24

-1.25%

US $

73.01

72.09

-1.26%

                                                       Source: KSE, MSCI, KASB


ACTIVE ISSUE

Company

CL. Price

% Chg.

Turnover

ICI Pak. Ltd.

16.45

-10.35

292,602,000

Pakistan Telecommunication

29.30

-7.42

241,342,000

Hub Power Co.

24.00

-8.22

201,942,500

DG Khan

16.25

25.48

108,637,000

Pakistan Sate Oil

215.00

-7.33

81,172,700

 


LEADERS

Company

Up

CL. Price

Turnover

%Chg.

Fateh Textile

125.00

675.00

200

22.73

Lever Brothers

37.00

1057.00

40,400

3.63

Knoll Pharma

18.50

260.00

268,700

7.66

Mehmood Textile

16.00

81.00

2,000

24.62

Premier Sugar

14.70

40.95

1,500

56.00

 


LAGGARDS

Company Down Cl Price Turnover %Chg

Pak. Insurance Corp.

45.00

455.00

30

-9.00

Adamjee Insurance

23.00

147.00

11,567,000

-13.53

Parke Davis

20.00

420.00

100

-4.53

Pak. State Oil

17.00

215.00

81,172,700

-7.33

Bank of Punjab

11.00

35.00

23,262,000

-23.91