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By SHABBIR H. KAZMI
Updated Aug  28, 2000

With the US dollar accumulation as investment, funds are moving from equities market to money market. The dollar buying spell is in anticipation of further weakness of rupee. There seems to be low probability of disbursement of any assistance from the IMF in third quarter of the year 2000. However, availability of funds from the Islamic Development Bank and Asian Development Bank has provided some support.

An important event which will set the pace of privatization is the successful bidding of LPG business of SSGC, SNGPL and PSO. In a way, the bids were attractive particularly because of the interest of foreign investors, i.e. Caltex and SHV. One may say that both of them already have stake in Pakistan, but enhancing the stake reflects their confidence in Pakistan. This may help in privatization of Pak Saudi Fertilizer. Fauji, Engro and Dawood, the three leading urea manufacturers, are in the race and each one is trying its level best to acquire the Company. All of them have the experience, funds and enjoy support of financial institutions.

FFC-JORDAN FERTILIZER

During the first half of the year 2000, the Company has posted Rs 2.3 billion loss before tax. This has effectively eroded nearly 65 per cent of its equity base. With a bleak medium term outlook for the Company, there is a strong probability that Fauji Fertilizer, the parent company, will have to inject additional equity depending on FFC-Jordan's financial performance during second half of the year. While sales during the six months period were Rs 1.494 billion, cost of goods sold were over rupees two billion. Financial charges amounted to Rs 1.272 billion and after provision for turnover tax, net loss came to Rs 2.309 billion.

DAWOOD HERCULES

The Company has declared 40 per cent interim dividend it had paid the same amount last year. While there has been nearly 100 per cent increase in sales, the hike in cost of production has eroded the advantage. Gross profit was Rs 264 million for the first half of the year 2000 as compared to Rs 221 million for the previous year. There has been increase in selling, administrative and financial charges. Other income of the Company came down from Rs 124.7 million for 1999 to Rs 95.7 million for the period under review.

NESTLE MILKPAK

For the first half of the year 2000 profit before tax of the Company was lower as compared to the corresponding period of the previous year. Consequently the Company declared 25 per cent interim dividend, whereas it had paid 35 per cent dividend on the basis of financial results for the first half of the year 1999. While there was an increase in sales, financial charges and other expenses also went up resulting in lower profit before tax which came down from Rs 244 million to Rs 186 million during the period under review.

CRESBANK

The Bank has declared 35 per cent interim dividend based on the financial results for the first half of the year 2000. This was possible mainly due to gains on sale of investment amounting to over one billion rupee. During the first half of the year 1999 the Bank had posted gains worth Rs 184.8 million only. The exchange gain on forward exchange contracts came to as low as Rs 9 million for the year 2000 as compared to Rs 84 million for the year 1999. CresBank was able to curtail its expenditure significantly from Rs 680 million for the year 1999 to Rs 490 million for the period under review. Taking the advantage of enhanced income the Bank made provisions amounting to Rs 289 million for the year 2000 whereas it has made provisions worth only Rs 73 million for the previous year.

SECURITY LEASING

The Company has declared 11 per cent dividend for the year ending June 30, 2000 as against a 10 per cent dividend for the previous year. While there was an increase in income from leasing operations other income jumped from Rs 4 billion for the previous year to Rs 17.7 billion for the year 2000. Financial expenses for the year 2000 were Rs 57 billion as opposed to Rs 49 billion for the previous year. Taking the advantage of enhanced income the Company made provision of Rs 5.5 billion for potential lease losses as against a provision of Rs 3.5 billion for the previous year. The transfers to statutory resveres were Rs 2 billion and reserve for deferred tax Rs 3.7 billion. The earning per share improved to Rs 1.26 whereas it was Rs 0.53 for the year 1999.

CLARIANT PAKISTAN

The company has posted Rs 81 million profit before tax for the first half of the year 2000 as against a profit of Rs 37 million for the corresponding period of previous year. While the Company was able to maintain the turn over level to more or less the level of previous year, the enhanced profit was there due to reduction in financial charges. and cost of goods sold. However, there was an increase in administrative and selling expenses and decrease in other income. Contribution towards workers' profit participation fund went up to Rs 4.3 million for the year 2000 as compared to Rs 1.8 million for the previous year. However, the Company preferred to skip payment of any interim dividend.

MOVEMENT AT A GLANCE

SCRIP

HIGH

LOW

TURNOVER (SHARE MN)

CLOSING PRICE

PTCL

26.30 25.60

75,805,500

25.65

Hub Power Company

16.80

56,709,000

16.75

.

Fauji Fertilizer Co.

41.25

39.00

7,608,400

39.00

FFC Jordan

7.70

7.00

17,835,500

7.00

Dawood Hercules

85.00

82.50

1,000

82.50

Nestle Milkpak

144.50

115.10

4,400

115.10

Crescent Bank

23.00

20.55

3,202,000

20.55

Security Leasing

5.00

4.80

25,000

5.00