By SHABBIR H. KAZMI
Updated Jul 31, 2000

The GoP has announced sale of specified percentage of shares of public sector enterprises through stock exchanges. However, the proposal seems to be moving very slow pace. It may be true that certain arrangements have to be made for the listing of Habib Bank and United Bank on stock exchanges but the delay in respect of companies already listed, i.e. SSGC, SNGPL, MCB, is beyond comprehension. No one will be keen in participating in privatization process in Pakistan unless the GoP takes some concrete steps. Why to waste time?

While a lot of discussion is going around regarding capitalization of opportunities in information technology, the stock exchanges in Pakistan have not come out with a separate set of listing rules for such companies. The paid-up capital of such companies is expected to be much lower than a manufacturing company or a financial institution. The other problem is that the sponsors of such companies will not have a track record.

The market remained directionless but highly volatile during the week. Profit taking was common and speculation in even newer scrips was also evident. With the tighter control on exposure limits and no news, which could initiate buying euphoria in the traditional scrips, market movement was directionless. Some of the Companies have announced attractive results but their shares are strongly held and paid-up capital is also low — little market float.

Pakistan Telecommunication

Pakistan Telecommunication Authority (PTA) has allowed the Company to increase local call charges and line rent as well as reduction in NWD and international call tariff. This is likely to improve earnings of the Company. PTCL has also asked for expression of interest for the establishment internet-based telephony system. PTCL also has major share in the company which is establishing cellular telephone system. All these measures are aimed at making the PTCL more combative before it losses monopoly.

HUBCO

Reportedly the Company has rejected the counter offer of WAPDA to resolve outstanding tariff dispute. HUBCO may not be keen in continuing the dialogue as WAPDA seems to be demanding reduction in tariff only. Even HUBCO lenders may not approve this because of huge T&D losses and inefficiency prevailing at WAPDA — the major reasons for its poor financial condition. It is feared that unless the GoP takes solid measures for privatization of WAPDA and KESC, the multilateral lenders will not be ready to make any concessions to WAPDA.

DEWAN SALMAN FIBRE

The merger of Dhan Fibres with Dewan will benefit the shareholders of both the companies. It will give Dewan a monopolistic status as the amalgamated company will control nearly 40 per cent of the total installed capacity of PSF manufacturing in the country. Dewan will enjoy a higher control on price of PSF. It may be bad or good but very shortly Dewan Group may start sending the top executives or even middle management of Dhan to their homes — as they have become redundant. The reduction in salaries etc. will be beneficial for the Company but their senior executives may face temporary unemployment — at least for the time being. Some analysts believe that there will be a definite reduction in cost of production, improvement in plant efficiency and quality of finished product.

ICI PAKISTAN

Speculators are once again on bargain hunt and ICI Pakistan is their pick. The recent buying interest is based on the assumption the half yearly results may exhibit considerable improvement — because of expectation of lower losses by the PTA plant. This assumption may not be wrong altogether. There are evidences of improved capacity utilization, profit margin and higher turn over. The higher PTA sales in domestic market may become a reality only if Ibrahim Fibres also starts buying from ICI Pakistan and PTA export become a norm.

LEVER BROTHERS PAKISTAN

The Company is expected to announce its half yearly results during first week of August. While some analysts believe that the profit margin will show an improvement, many others have a contradictory opinion. They say that profitability of the Company has remained under pressure due to lower turnover of certain products. With the diminishing purchasing power of people sales of its products has been affected. However, the impact was partially neutralized by lower international prices of some of the important raw materials.

JAHANGIR SIDDIQUI & COMPANY

The Company has announced 28 per cent dividend and 25 per cent Bonus issue for the year ending June 30, 2000. The Bonus shares will be issued against share premium collected in the past. The Company had paid 50 per cent dividend for the previous year. It is interesting to note that the Company had made provision of over Rs 7 million for the year ending June 30, 2000 whereas it has written-back almost the same amount for the previous year. This provision was made against diminution in value of investments.

MOVEMENT AT A GLANCE
SCRIP	HIGH	LOW	TURNOVER (SHARE MN)	CLOSING PRICE
Hub Power Co.	18.15	17.25	161,754,500	17.25
ICI Pakistan	16.50	14.90	77,291,000	14.90
Lever Brothers	1000.00	950.00	4,800	980.00
PTCL	28.80	27.15	122,031,500	27.15
Dewan Salman Fibre	26.75	25.85	6,082,000	25.85
Dhan Fibre	8.95	8.55	6,152,500	8.55