By SHABBIR H. KAZMI
Updated Aug 11, 2001

The over supply continue to play a havoc and KSE-100 continues to move downwards. Despite current prices being attractive, investors prefer to stay at sidelines. The general feeling is that the over supply will further plunge the prices. With no news in the making, which can boost investors' confidence, even the speculators are not willing to take long positions.

ENGRO CHEMICAL PAKISTAN

The Company has released accounts for January-June 2001 period indicating a robust growth. Profit after tax grew from Rs 73 million for the first half of 2001 to Rs 287 million. The Board of Directors have also announced 20 per cent interim dividend and market has responded negatively as the quoted price dipped soon after announcement of the results. Many analysts say that profit is much below the expectations but it is difficult to understand why their forecast for profit was so high. The full year results are expected to be better because recent rainfall will increase urea offtake. Analysts believe that since capacity utilization of units in the private sector, at present, exceeds designed capacity the GoP must announce Fertilizer Policy without further delay to keep the country self-sufficient in urea production.

LEVER BROTHERS PAKISTAN

The largest producer of consumer products has registered 25 per cent increase in profit for the first half of 2001 as compared to the corresponding period of previous year. The Board of Directors have approved payment of 75 per cent interim dividend. Declining prices of tea in the international markets have helped the Company in posting higher profit. However, 5 per cent increase in custom duty, announced in the budget, is expected to adversely affect full year earnings from tea business. The analysts also warn about decline in earnings from edible oil business due to increase in palm oil price by Malaysia.

SHELL PAKISTAN

Shell Pakistan has decided to invest US$ 35 million in white oil pipeline project. Shell will hold an extra-ordinary general meeting to pass the resolution regarding the investment in this project of Pak-Arab Refinery Pipeline Company. The cost of this pipeline is estimated around US$ 400 million. Other partners in the project are: Pak-Arab Refinery, Pakistan State Oil Company and Caltex Limited. Establishment of white oil pipeline is expected to rationalize transportation cost of POL products being shipped by tankers, which is not only an expensive mode but also hazardous in nature.

IBRAHIM FIBRE

According to a notice received by the Karachi Stock Exchange, Ibrahim Group will soon announce the scheme of merger also indicating swap ratio. The companies to be merged into Ibrahim Fibre are: Ibrahim Textile, A. A. Textile, Zainab Textile and Ibrahim Energy. The management expects to complete all the formalities by November. The merger is expected to improve overall operations due to cost optimization.

FAUJI FERTILIZER COMPANY
The Company has released its half-yearly results indicating a 10.5 per cent growth in sales and EPS. Operating profit improved because of cost control and other income grew by 60 per cent. At the same time financial expenses went up by 38 per cent. There was reduction in effective tax rate. The net result was a profit after tax of Rs 1,429 million versus Rs 917 million which enabled the Company to pay 25 per cent interim dividend — the total dividend paid so far for the year 2001 comes to 55 per cent.

GENERAL TYRE & RUBBER COMPANY

The Company controls a large share of tyre sales in Pakistan and has plans to further increase its production. However, the tussle between Continental AG, a Germany based multinational and Biboji (Habibullah Group) has only delayed the expansion project but Continental has also moved an application for withdrawal of 'General' trade mark. The battle has continued for more than two years and resulted in reduction of Biboji nominated directors on the Board. Interestingly the two financial institutions having a total stake of around 39 per cent have played a major role in changing the composition of the Board of Directors. While Biboji controls 34 per cent shares, Continental owns 10 per cent share. All eyes are set on August 26, when some decisive development will take place regarding Continental's plea to drop 'General' from the name and brand. If this happens it will be a jolt to foreign investment.

HUBCO

Conflicting reports about the approval of interim dividend by the lenders of the Company indicates at least one point that shareholders will not receive any return for a few more weeks and scrip may witness further erosion in price. At the same time the analysts forecast for a lower electricity purchase from the IPP because of higher water level at various dams. In the recent past WAPDA was forced to make electricity purchase at much higher level resulting in nearly 100 per cent capacity utilization at HUBCO.

MOVEMENT AT A GLANCE
SCRIP	HIGH (Rs.)	LOW (Rs.)	CLOSING  PRICE	TURNOVER  (SHARE MN)
PTCL	15.65	14.70	15.15	76,130,500
Hubco	16.60	15.45	15.80	62,724,500
Engro	54.80	49.15	50.50	32,720,300
PSO	124.90	117.75	112.00	0,687,400
ICI	8.35	7.10	7.30	29,335,000
MCB	22.50	20.65	21.10	9,123,000
Fauji Fertilizer	36.50	35.20	35.40	5,311,100
Shell	221.65	215,00	218,00	157,100