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By SHABBIR H. KAZMI
Updated Jun 12, 2000

Equities' market continued to face selling pressure during this week — as per our forecast. This pressure is expected to continue for another two to three weeks despite the help rendered by the consortium. A positive point was that volume of daily trading has come down. However, the bizarre attitude of small investors was evident from the subscription applications received by Dewan Farooque Motors — the small investors refrained from applying and only large retail investors and institutions filed their applications.

HUBCO

HUBCO has requested arbitration proceeding with the ICC on the issue of non-payment of GST by WAPDA. While the Company has been paying GST on furnace oil purchases, WAPDA is not paying the same to the HUBCO as it has filed an exemption application on GST. This non-payment has further enhanced HUBCO's receivables which are estimated around Rs 14 billion due to the interim order of the court regarding payment by WAPDA to the Company.

DEWAN FAROOQUE MOTORS

The public offer of Rs 185 million by the Company had been oversubscribed by Rs 41 million — 22 per cent higher. The first three categories 500 shares, 2,500 shares and 5,000 shares remained under subscribed but the forth category of 10,000 shares and multiples thereof was oversubscribed. The largest sum of subscription has come through ABN AMRO Bank contributing Rs 151 million or 67 per cent of the total subscription of Rs 225 million. The under subscription of smaller lots indicates that small investors preferred to refrain as the equities market faced the worst crisis — a battle of elephants only.

FFC-JORDAN FERTILIZER

The Company has released its annual accounts for the year ending December 31, 1999. During the year FJFC produced 236,000 tonnes DAP and 212,000 tonnes urea — less than 50 per cent capacity utilization. If one recollects, the plant had commenced commercial production in late 1998. Therefore, 1999 production cannot be termed as trial production. Two problems were said to be responsible for low capacity utilization, Heat Recovery Steam Generator (HRSG) and inadequate gas supply. DAP plant could not be operated at full capacity due to bucket elevator problem. The project delay had resulted in increased project cost. The project, till the announcement of commercial operation, was completed at a cost of US$ 469 million against the estimated total cost of US$ 370 million. Though, most of the problems have been overcome, cashflow and profitability of the Company is expected to remain under pressure during the year 2000.

NAFEES COTTON MILLS

After tax profit of the Company for the half year, ending March 31, 2000, is Rs 34.8 million as compared to Rs 3.1 million for the corresponding period of last year. The increase is more than 11 times. This has resulted in substantial increase in earning per share — from Rs 0.36 to Rs 3.08 for the period under review. The main reason for rise in after tax profit was increase in gross profit — from Rs 54 million to Rs 91 million. Despite increase in operating expenses and other charges profit before tax was Rs 37 million as compared to Rs 5 million for the six-months period of last year.

EFU GENERAL INSURANCE

After tax profit of the Company for the year ending December 31, 1999 was 50 per cent higher as compared to last year. There was no sign of sustainable economic recovery in 1999 and the level of activity in manufacturing, services and trading sectors remained subdued. Despite the difficult conditions, the gross premium increased by 7 per cent and net premium grew by 9 per cent. The growth rate compares favourably with the 4 per cent growth achieved by the private sector as a whole. The improvement in law and order situation in Karachi has helped reduce losses on account of car theft. The investment in real estate has become a stable source of income and also reduced volatility in Company's investment portfolio. EFU General has declared 20 per cent cash dividend and decided to issue one bonus share for every 9 shares held by the shareholders.

PARKE-DAVIS & COMPANY

In 1999 the Company's accounting was aligned with that of its parent company and the year end was changed from November 30 to December 31. As a result the report covers a period of 13 months. The Director's Report termed 1999 a satisfactory year despite the GoP policies towards pharmaceutical industry. On an annualized basis, before tax profit recorded a growth of 10 per cent over 1998. Profit could not keep pace with the growth achieved in sales due to the absence of price increase since November 1996 and overall increase in cost due to inflation, depreciation of rupee and GoP policies towards imports. The Company had declared Rs 3 dividend per share from previous year's earnings and another Rs 17.5 per share from current year earnings.

SCRIP

HIGH

LOW

TURNOVER (SHARE MN)

CLOSING PRICE

Hub Power Co.

16.00

15.10

86,601,500

15.10

Dewan Farooq Motor

10.15

10.10

344,500

10.10

Nafees Cotton

7.00

7.50

66,000

7.50

FFC Jordan

9.95

9.40

14,335,000

9.40

EFU General Insurance

40.00

35.00

4,200

35.00