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By SHABBIR H. KAZMI
Updated Jul 24, 2000

Although, KSE-100 index gained some respect, the market remained directionless during the week. While there was said to be some interest of foreign investors, many analysts were a little skeptical. Some of them strongly believe that speculators are once again trying to get control of the market direction. However, the new exposure limits will help in containing the market volatility. If the stock exchanges are serious in avoiding any crisis in future they must keep an eye on insiders trading also.

Dollar has once again became an attractive investment. Stability of exchange rate will largely depend on the ability and frequency of intervention by the central bank. Therefore, the GoP-IMF talk becomes an important event to watch. The successful negotiation with the IMF and early disbursement of funds will provide support to Pakistan's balance of payment but importantly induce the foreign investors to look towards the country even if they do not make an immediate and substantial investment.

The GoP has once again expressed its intention to privatize state-owned entities and also appointed some financial advisors. Earlier, the government had also announced sale of shares of state enterprises through stock exchanges. Both local and foreign investors await details. Some analysts believe that such transactions may help the GoP in raising funds but investors should not expect any dividend for at least couple of years. The other apprehension is the appetite of the domestic capital market.

HUBCO

There seems to be, once again, speculative buying in HUBCO. The interest was said be in anticipation of a possible patch up with WAPDA. However, some analysts believe that the speculators have re-entered the arena. The probability of a resolution with WAPDA has been further dampened due to increase in prices of gas and furnace oil. T&D losses of both WAPDA and KESC are getting higher. All these factors would not allow WAPDA to make a counter offer which should be acceptable to HUBCO.

PAKISTAN TELECOMMUNICATION

The much awaited announcement of increase in tariff and line rent has finally come. This will certainly improve the cashflow and profit margin of the Company. However, it is surprising that while WAPDA is required to file a petition with National Electric Power Regulatory Authority before announcing any increase in tariff, Pakistan Telecommunication Authority did not follow the ritual. It seems that the GoP/PTCL wants to skim the maximum milk before it looses monopoly status. PTCL may make some short term gains but the sector will become very attractive for the new entrants once PTCL monopoly expires.

ABBOTT LABORATORIES

Half yearly, ending May 31, 2000, results of the Company indicates over 9 per cent increase in total revenue. While domestic sales increased by 8,7 per cent there was a whooping growth of nearly 24 per cent in exports. Given the sluggish economy and no increase in price of pharmaceutical products, the performance of the Company is above satisfactory level. Abbott posted a profit after tax of Rs 56 million in the year 2000 as against a loss of Rs 14 million for the corresponding period of previous year. The Company has successfully completed the Rights Issue of Rs 260 million reflecting the confidence of shareholders in the Company. Lately the GoP has allowed 8 per cent hike on controlled and 10 per cent increase on decontrolled products. This is expected to further improve the profitability of the Company for the full year.

BSJS BALANCED FUND

It is a closed-ended mutual fund managed by ABAMCO Limited. It is the first company listed on Karachi Stock Exchange to announce its results for the year ending June 30, 2000. The net profit posted was nearly Rs 51 million for the year as compared to Rs 15 million for the year 1999. The Net Asset Value (NAV) the Unit of the Company was reported at Rs 11.75 as compared to Rs 10.83 for the previous year. The Company declared 31 per cent dividend for the year 2000 as against a payment of 10 per cent for the previous year. BSJS is the only closed-ended mutual fund in the country which has consistently been paying dividend from the very first year of its operations.

JAHANGIR SIDDIQUI INVESTMENT BANK

For the 18 months period ending June 30, 2000 the Bank has paid 15 per cent interim dividend and proposed 10 per cent final dividend. It has been recommended by the Board of Directors to issue 40 per cent Bonus shares. The income of the Bank for the year 2000 came down to Rs 102 million as compared to Rs 223 million for the year 1998. The operating expenses also declined from about Rs 172 million in 1998 to Rs 83 million for the period under review. The most remarkable item was reduction in tax liability, for the 18 months period, to one million rupees as compared to Rs 16 million for the year 1998. Jahangir Siddiqui Investment Bank was previously known as Citicorp Investment Bank Limited.

MOVEMENT AT A GLANCE

SCRIP

HIGH

LOW

TURNOVER (SHARE MN)

CLOSING PRICE

Abbot Laboratories

44.00

43.00

43.00

Jahangir Inv. Bank

22.50

20.00

128,500

21.75

BSJS Funds

11.50

10.00

1,000

10.00

Dhan Fibre

10.55

8.90

26,982,500

8.90

Dewan Fibre

28.60

27.00

18,081,500

27.00

Hub Power Co.

18.30

15.80

302,111,500

18.30

PTCL

28.95

27.80

166,302,500

28.70