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A weekly review of fundamentals enjoyed by the blue chips

By SHABBIR H. KAZMI
Updated Oct 30, 2000

During the week KSE-100 index remained under pressure and fell below 1500 points despite the best efforts of players to sustain this level mainly due to weakness of HUBCO and PTCL which together enjoy a weightage of 43 per cent in the index. The market is expected to remain directionless in the following weeks.

The perception that the settlement of the HUBCO issue on the basis of KAPCO now appears to be a distant possibility. This feeling is supported by the recent statement of chairman WAPDA "we cannot accept HUBCO terms for rate cut or foreign pressure".

ENGRO CHEMICAL PAKISTAN

The Board of Directors of the Company have declared a second interim dividend for the year 2000. The fundamentals for fertilizer industry improved appreciably during the third quarter of the year 2000. The improved domestic supply/demand balance and the firming up of international price of urea enables the Company to increase the price of the commodity. This reversed the declining price trend of the past two and half years and enabled the Company to pass through some of the cost increase. The Company's sales during January-September period was 553,000 tonnes representing a market share of 19 per cent. However, the profit for the nine months period was 48 per cent lower than that of the corresponding period of last year due to gas price hike and lower margin. The industry prospects for the remainder of the year seem promising. However, urea manufacturers anxiously await the announcement of fertilizer policy at the earliest. This policy will determine the quantum of fresh investment to maintain self-sufficiency.

ICI PAKISTAN

The Board of Directors have taken certain strategic decisions for the revitalization of the Company and its business. The strategy will be fully supported by parent Company. The Company plans to de-merger of the PTA business into a new public limited company. An increase in PSF capacity from 60,000 tonnes to over 100,000 tonnes per annum was approved in principle. The Company intend to secure third party funding for the US$ 205 million through floating a Modaraba to avoid additional liabilities being added to the balance sheet. The additional capacity is expected to come on line in early 2002. This follows the recently announced investment of US$ 11 million in the Soda Ash business for debottlenecking and plant automation to increase the capacity to 225,000 tonnes per annum together with improved manufacturing efficiency. Another 25,000 tonnes production of PTA will come on line during the year 2002 through debottlenecking.

SHABBIR TILES & CERAMICS

The Company has released financial results for the year ending June 30, 2000, announced 27.5 per cent dividend and to issue 15 per cent Bonus shares. Operating profit for the year 2000 was Rs 82 million as against a profit of approx. Rs 79 million for the previous year. This was possible due to increase in turnover and higher gross profit. While there was increase in selling and distribution expenses, administrative expenditure and other operating charges, the Company managed to curtail financial charges though marginally. This enabled the Company to pay higher dividend and issue Bonus Shares out of the earnings for the year 2000.

RUPALI POLYESTER

The overall improvement in the performance of the Company is visible from the financial results for the year ending June 30, 2000. Operating profit jumped from Rs 89.7 million for the previous year to Rs 259 million for the year 2000. This was due to reduction in administration, selling and general expenses and financial charges a decline from Rs 211.6 million for the year 1999 to Rs 149 million for the year under review. Profit before tax for the year 2000 was Rs 257. 7 million out of which provision for taxation amounting to Rs 117.3 million was made. The tax liability for the year 1999 was Rs 68 million.

PAKISTAN PAPER PRODUCTS

Gross profit of the Company for the year ending June 30, 2000 was Rs 14 million as compared to that of Rs 11.9 million for the previous year. Profit before tax increased from Rs 4.7 million for the year 1999 to Rs 6.5 million for the year under review. This was mainly due to a decrease in financial charges and an increase in other income. The Company had issued Bonus Shares at the end of the year 1999 amounting to Rs 5 million. The amount to be paid as dividend worked out to Rs 3.75 million and the balance Rs 0.642 million would be carried forward.

ATLAS INVESTMENT BANK

The Bank has posted Rs 23 million profit before tax for the year ending June 30, 2000 as against a profit of Rs 19 million for the previous year. While there was reduction in income from operations there was also reduction in cost of funds and provisions. However administrative and other operating expenses increased. The Board of Directors have announced to pay 10 per cent dividend and to issue 5 per cent Bonus Shares.

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

TURNOVER
 (SHARE MN)

CLOSING 
PRICE

Hubco

19.00

18.25

187,216,000

18.30

PTCL

24.50

24.00

56,260,000

24.00

FFC

38.00

37.35

7,566,800

38.00

Engro

55.85

53.55

28,756,300

55.85

ICI

13.30

12.60

66,073,000

12.60

Shabbir Tiles

13.05

11.70

101,500

13.05

Rupali Polyester

31.00

28.00

3500

31.00

Pak Paper Products

22.00

 22.00

22.00

Atlas Inv. Bank

7.00

7.00

2500

7.00
Source IP Securities