By SHABBIR H. KAZMI
Updated Apr 28, 2001

This was a lackluster week but at the end some activity emerged in Muslim Commercial Bank (MCB) and most of the volume leaders witnessed price erosion. HUBCO is expected to once become a favourite due to a forecast for 30 to 40 dividend for the year ending June 30, 2001. The basis for this optimism is large-scale dispatches to WAPDA — around 100 per cent of installed capacity. Even in the near future, if water level at dams does not improve, WAPDA will be compelled to maintain current level of electricity purchase from HUBCO.

CRESCENT TEXTILE MILLS

An extra-ordinary general meeting of the shareholders on May 8 has been notified for approval of financial assistance to Crescent Greenwood Limited — an associate undertaking. This include approval to: 1) make Rs 342 million investment and Rs 60 million stand-by working capital facility, 2) convert short-term trade advance of Rs 932.4 million into long-term subordinated loan and 3) make further investment, aggregating but not exceeding, rupee equivalent of DM 7.4 million and US$ 3.5 million in Crescent Greenwood Limited. Even after approval by the shareholders, a consent has to be obtained from Securities and Exchange Commission of Pakistan. Crescent Greenwood Limited has been suffering huge losses since its inception and the break up value of Rs 10.00 ordinary share came to a negative Rs 8.18. Crescent Textile Mills has already exceeded the limit of investment in associate undertakings permissible under the provisions of the Companies Ordinance 1984.

PAKISTAN TELECOMMUNICATION COMPANY

The news for privatization of PTCL has once again started appearing but its share price is not expected to move above Rs 20.00 under the previous negative sentiments for the Company. Investors face three situations: a forecast for decline in earnings, an expectation that Privatization may demand Rs 50 for the proposed tranche and an overall lack of interest in the scrip. This lack of interest may be temporary. However, the perception about the Company will determine its price in the near future. Many investors are not willing to take long positions at present. The recent selling by foreign fund managers indicates lack of interest in telecommunication companies in general and Asian markets in particular.

SIEMENS PAKISTAN ENGINEERING

The Company has posted Rs 89 million profit after tax for the half year ended March 31, 2001 as compared to a profit of Rs 90 million for the corresponding period of the previous year. While this may not look extra ordinary, one sees an exception fall in gross profit. Net sales for the first half of 2001 were Rs 2,030.6 million as against a turnover of Rs 1,656 million. However, gross margin reduced from Rs 410 million for six months period of the year 2000 to Rs 331 million for the period under review. The reason being substantial increase in cost of goods sold. At the same time company was able to curtail financial charges from Rs 91.7 million for the year 2000 to Rs 7.6 million for the period under review. However, the Company has not declared any interim dividend.

ESSA CEMENT INDUSTRIES

Profit after tax for the half year ended December 2000 reduced to nearly half of the amount for the corresponding period of the previous year. This was despite an increase in sales — from 254 million for the six months period of the year 1999 to Rs 344 million for the period under review. While cost of goods sold went up, financial charges also increased from Rs 19 million for the previous year to Rs 25 million for the year 2000. Earning per share during this period also came down from Rs 0.44 to Rs 0.23. Fundamentals for cement industries are expected to improve mainly due to a decline in furnace oil prices. However, cement offtake is projected to remain low.

SURAJ COTTON MILLS

Higher sales and better control on cost of goods sold enabled the Company to post much higher profit before tax for the year ended September 30, 2000. The Company has posted Rs 196 million profit after tax for the year 2000 as compared to a profit of Rs 70 million for the previous year. This would have been much higher had its financial charges were not nearly Rs 110 million. The Board of Directors have recommended 25 per cent dividend amounting to Rs 45 million and preferred to transfer Rs 90 million to general reserve. Shareholders were paid only Rs 9 million and Rs 29 million were transferred to general reserve last year.

KASHMIR EDIBLE OILS

Though the Company has been able to reduce its accumulated losses, they were still above Rs 49 million as at February 28, 2001. However, profit for six months period of 2001 was just Rs 2.9 million as against a profit of about Rs 12 million for the corresponding period of the previous year. The reduction in profit can be attributed to increase of cost of goods sold. Though there was increase in sales, gross profit came down from Rs 34 million for the year 2000 to Rs 26 million for the period under review. Another important observation is that financial and other charges were on higher side — above Rs 17 million.

MOVEMENT AT A GLANCE
SCRIP	HIGH (Rs.)	LOW (Rs.)	CLOSING  PRICE	TURNOVER  (SHARE MN)
Hubco	21.85	20.90	21.20	144,625,000
PTCL	18.95	17.95	18.10	117,848,500
ICI	10.30	9.15	9.25	61,495,000
PSO	144.60	139.00	142.00	55,855,300
MCB	27.20	25.15	26.70	17,734,500
Adamjee	66.45	64.05	64.70	7,289,500
Crescent Textil	15.60	14.50	14.90	596,000
Siemens	18.00	15.00	15.00	5,000