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By SHABBIR H. KAZMI
Updated July 28, 2001

The downward move of KSE-100 index is expected to continue for a number of reasons. The various factors responsible for the situation are said to be liquidity crunch, T+3 System and lack of investors' interest in equities market. However, some analysts say that the regulators, stock exchanges and some of the brokerage houses are responsible for the present situation. Unless investors' confidence in equities market is restored, it will remain in the grip of market manipulators.

ABAMCO

ABAMCO Limited, the asset management company managing Unit Trust of Pakistan (UTP) has announced results for the year ending June 30, 2001 within three weeks of the end of the financial year. The Board of Directors have approved 12 per cent dividend which would absorb Rs 86.4 million equal to 99 per cent of the year's net profit. UTP has posted Rs 87 million for the year ending June 30, 2001 as compared to a profit of Rs 109 million for the previous year. The fund earned Rs 20.8 million from gain on sale of marketable securities as against Rs 59 million last year. This is attributable to the bearish spell throughout the year in equities market. During the year under review 64,457 Units were sold and 11,290 Units were redeemed. The net sales of 55,561 units valued at over Rs 300 million as against 17,553 Units valued at Rs 119.5 million for the previous year. A total of 144,057 Units with a value of Rs 749.3 million were outstanding at June 30, 2001 as against 88,496 Units with a value of Rs 469 million at the end of previous year. The Unit holding pattern indicates a healthy mix of investors with 26 per cent Units held by provident/pension funds and 24 per cent by banks, 14 per cent by insurance companies and 31 per cent by NBFIs. The Net Asset Value (NAV) of the Units after appropriation of dividend was Rs 5,201 as on June 30, 2001 as against Rs 5,300 on June 30, 2000.

CLARIANT PAKISTAN

The Company has released half yearly accounts for the period ending June 30, 2001 and also announced 25 per cent interim dividend. Clariant has posted Rs 140.6 million profit before tax for the first six months of year 2001 as compared to a profit of Rs 81 million for the corresponding period of previous year. There has been a substantial increase in tax provision from Rs 38 million for the year 2000 to about Rs 65 million for the period under review. Despite an increase in cost of goods sold, as a percentage of gross sales, the management has succeeded in improving its profit margin from 5.5 per cent to 7.6 per cent by exercising cost controls, particularly financial expenses. The earning per share for the year 2001 comes to Rs 4.85 an improvement from Rs 2.74 for the corresponding period of previous year.

EXIDE PAKISTAN

The Company has released annual accounts for the year ending March 31, 2001 and posted loss after tax amounting to Rs 16 million. The Company had recorded Rs 19.7 million profit after tax for the previous year. This only reason attributable was a provision against diminution value of investment in subsidiary companies amounting to over Rs 40.6 million. Except this unusual provision performance of the Company indicates overall improvement. Technically, capability of the Company to make this provision should be considered a strength. As a consequence of this provision, shareholders have been deprived of any return on their investment dividend payout for the previous year was 15 per cent. In the absence of balance sheet and explanatory accounts, it is not possible to find out details about the subsidiary. Both the KSE and SECP must take a note of this, find out the reasons which lead to such a provision and should also introduce measures which can minimize exposure in an associate company.

THE THAL INDUSTRIES

The Company had announced 100 per cent Right Issue amounting to over Rs 70 million. However, the management has received subscription amounting to Rs 604,510 only. This indicates the complete lack of investors' interest in sugar sector. One of the reasons responsible for the situation is poor performance of listed sugar mills over last couple of years. However, industry experts say that a crisis like situation is the outcome of government policies. Unless these issues are resolved most of the mills will continue to post losses or marginal profit, at the best.

MFMY INDUSTRIES

The Board of Directors have recommended 10 per cent interim dividend for the current financial year. The directors and their associates have agreed to relinquish their right to get the benefit and dividend will only be paid to small investors from general public. Although the recent revival of textile industry has also enabled the Company to achieve operational profit lately, it will be quite some time before the Company is able to recoup the accumulated losses.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

PTCL

16.10

15.10

15.25

76,146,000

Hubco

17.65

16.25

16.45

75,146,000

ICI

8.35

7.75

7.75

11,568,000

MCB

22.65

21.45

21.55

8,331,500

Adamjee

46.35

43.50

43.95

7,814,000

Engro

53.30

51.65

51.75

7,054,700

Fauji Fertilizer

3560

34.60

34.80

5,177,600

Nishat Mills

15.35

14.40

14.55

1,520,500

World Call

13.70

13.20

13.30

1,177,500