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THE KASB REVIEW
STOCK MARKET AT A GLANCE

  1. FINEX WEEK
  2. STOCK WATCH
  3. STOCK MARKET AT A GLANCE

The KSE Overview: Activity remains muted

Updated on Aug 28, 2000

Activity during the trading week remained subdued due to continuing uncertainty, and the KSE Index, which at the start of the week was 1571.97, eased off by 4.53% per cent to close at the level of 1500.79.

Panic was evident amongst the retailers and jobbers who until now had managed to provide fragile support at 1550. However, now they seem to have no other option but to liquidate as the cost of their holdings continues to increase.

Annual results announced by Tripak in the full year showed growth in earnings by 30% but a limited payout of 15% led to a massive sell off and its price collapsed from a level of 31.25 to close for the week at 28.65. Even strong half-year results of Crescent Investment Bank, that announced 35% cash payment, failed to restore investor confidence.

Depleting forex reserves and uncertainty about the consequence of ongoing discussions with IMF regarding financial assistance, accompanied by a technical meltdown of 1550 levels bears a negative picture for the market in the near term. Only a positive event specifically related to a favourable outcome of Hubco -Wapda talks, which have begun in Zurich, might assist in bringing life back to the market.

Low volume and negative momentum amidst lack of buying interest by institutions and foreign buyers paved way for breach of pivot at 1550, the immediate support.

In the forthcoming period, immediate support will emerge psychologically at 1500 levels. Technically, however, the band of 1400-1450 will be a turnaround zone. Major resistance is anticipated at 1550 levels.

Information Technology (IT) Policy Announced.

It's Showtime!!

Information technology policy and action plan finally approved by the Cabinet.

Government commits Pkr 5 bn for the IT and telecommunications sector in the Public Sector Development Programme (PSDP) of 2000-01 .

Draft IT ordinance 2000 has finally been formulated to provide legal recognition to electronic transactions and digital signatures.

Virtual University of Distance Learning to be launched.

Educational and training institutions to be established to ensure ground root development of the IT sector. National testing and accreditation service to be constituted to monitor the quality of the education imparted in this field.

PTCL to provide international bandwidth and Internet connectivity to the ISP's and other corporate customers within four to eight weeks. Bandwidth rates to be further slashed.

GoP outlines role Although the measures included in the list are more in number we have highlighted the ones we feel are likely to have a greater and wider impact on the overall growth prospects of IT in Pakistan. This policy announcement could prove to be the mainstay in providing Pakistan the overall cover to enter the IT age in a big way. With a commitment of Pkr 5 bn by the government much emphasis will now be on the private sector to supplement growth in the IT sector. Furthermore, the emphasis on ground root development will not only have beneficial impacts on the telecom and Internet related sectors, rather, the impact will be manifold in terms of education, employment, cost efficiency in PSU's and documentation of various previously impregnable sections of our economy.

Aboard at last!... and not a minute too soon.

The impact on old economy companies and their business models is far from established in the US even let alone Pakistan. Although the Internet wave has altered the mindset of traditional companies, most of them are rushing in how to incorporate Internet related activities in their strategy and business plans. We are cognizant of this "herd mentality" and expect an initial fallout in the absence of returns from these half-baked investments.

The penetration of the Internet itself is in part dependent on demographic variables, but other concerns come to mind as well. We believe that basic telecommunications or better still the lack of it affects the growth of Internet. We believe this played a huge role in the somewhat delayed response of successive governments in the need to adopt a strategy to implement IT in the country. With Pakistan initially lacking the infrastructure, the need to conform to the regulatory and legal aspect of e-commerce and Internet were never discussed in depth and remained inconclusive arguments at best.

Analogies are being drawn with the advent of electricity and how it transformed life in the 20th century. Similarly, the Internet is likely to transform how we live, work and play in the 21st century.

Impact on Equity Investors: PTCL at crossroads

Although there is no direct impact of this policy in the near term, but the positives of today's endeavor to encourage IT growth will start accruing, only to start becoming visible some time down the road.

For PTCL on the other hand, the choppy waters ahead have started to become blatantly visible. Our main concern continues to stem from fitting PTCL into the big picture of government sponsored IT growth in the country. At a cross road currently, near term policy measures by PTCL's management will only differentiate PTCL's overall business model i.e. whether based on profitability only, or being part of the quasi public sector companies with an aim to provide basic services across the country.

MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

7.69

7.23

-5.96

KSE 100 Index

1571.97

1500.79

-4.53

Total Turnover (mn shares)

366.53

440.34

20.14

Value Traded (US$ mn.)

326.06

326.90

0.26

No. of Trading Sessions

4

5

 

Avg. DlyT/O (mn. shares)

91.63

88.07

-3.89

Avg. Dly T/O (US$ mn)

81.52

65.38

-19.79

MSCI Pakistan Index:

Pak Rs.

109.57

105.76

-3.47

US $

51.90

49.67

-4.31

Source: KSE, MSCI, KASB


 

 

ASIA PACIFIC & AUSTRALIA
EXCHANGE INDEX lEVEL CHANGE EXCHANGE

Bombay

BSE

4416.86

-42.21

-0.95%

Hong Kong

Hang Seng

17236.74

-202.96

-1.16%

Singapore

Straits Times

2166.29

-7.67

-0.35%

Sydney

S&P ASX 200

3367.4

-5.00

-0.15%

Tokyo

Nikkei

16911.33

+240.51

1.44%

 


 

EUROPE & UNITED STATE OF AMERICA
EXCHANGE IINDEX LEVEL CHANGE EXCHANGE

Frankfurt

DAX

7307.17

+76.91

1.06%

London

FTSE

6563.7

+6.70

0.1%

Paris

CAC

6595.11

+133.18

2.06%

Dow Jones

Industrial

11192.63

9.89

 

NASDAQ

Composite

4042.68

-10.60