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By SHABBIR H. KAZMI
Updated Oct 27, 2001

The KSE-100 index registered sustained improvement during the week. Partly this can be attributed to expected rescheduling and write-off of Pakistan's external debts and partly because of some stability in exchange rate. Analysts also hint towards sporadic activity of foreign fund managers who have diverted some funds towards Pakistan in anticipation of payment of handsome dividend by volume leaders.

At the same time some analysts warn about reappearance of market manipulators. These analysts say that sudden increase in prices of certain scrips, which do not enjoy sound economic fundamentals, is an alarming factor.

ENGRO CHEMICAL PAKISTAN

Despite an overall depressed demand for urea in the country, the Company has recorded higher earnings per share (EPS) during for the first nine months of year 2001 as compared to corresponding period of previous year. This improvement is attributed to the improved urea margin, the reduction in financial charges on long-term loans and the gains on ECPL's foreign currency deposits. The Board of Directors also announced second interim dividend of 20 per cent, making total interim dividend 40 per cent. During third quarter of current year ECPL sold 535,000 tonnes urea. Total sales amounted to Rs 2,360 million, lower than a figure of Rs 2,672 million for the corresponding period of year 2000. Production of urea during this period was 3 per cent lower than that of previous year. This was due to equipment limitations. The recently completed NPK fertilizer plant at Port Qasim also faced some start up problems. It is important to note that EPS has improved substantially despite slight reduction in urea production. Net profit also improved from Rs 429 million to Rs 706 million during this period.

FIRST HABIB MODARABA

The Modaraba maintained its dividend payout at 22.5 per cent for the year ending June 30, 2001. However, it is noted that while operating income improved operating expenses also increased. Operating income increased from Rs 365.8 million to Rs 413.6 million and operating expenses went up from Rs 287.4 million to Rs 337.5 million during this period. However, net profit for the year 2001 was more or less the same for the previous year.

HUBCO

During the week scrip staged major gain in price in the backdrop of analysts' forecast that a handsome final dividend was expected. The scrip has always been a pick of investors as well as speculators. With the reappearance of active participation by speculators from upcountry further and substantial increase in price cannot be ruled out. Therefore, analysts warn of profit taking and sudden plunge in price. The economic fundamentals for the Company have improved lately. Cashflow of its sole customer, WAPDA, is expected to improve due to lower furnace oil price and recent increase in electricity tariff.

CRESCENT LEASING CORPORATION

The Company has posted improved financial results for the year ending June 30, 2001, as compared to previous year. Operating profit before provisions improved from Rs 43.52 million for the year 2000 to Rs 56.15 million. While provision against potential lease losses increased, it was partly offset by decrease in provision against specific lease losses. Profit after tax also improved from Rs 30.8 million to Rs 48.5 million during this period. This enabled the company to issues 10 per cent bonus shares, at least. Last year stockholder did not get any dividend on their investment in the Company. Last year as well as this year an amount of nearly Rs 19 million was transferred to reserve for deferred taxation.

PAKISTAN REFINERY

The refinery was able to improve payout for the year ending June 30, 2001 as compared to previous year. The Board of Directors have approved 35 per cent dividend, whereas last year dividend payout was 25 per cent. Gross sales improved from Rs 20,754 million to Rs 25,323 million and cost of sales hiked from Rs 23,115 million to Rs 26,539 million. However, it is to be noted that reimbursement from government decreased from Rs 3,249 million to Rs 1,909.7 million during this period. It seems that improvement in liquidity position enabled the Company to curtail financial charges from Rs 235 million for the previous year to Rs 114 million for the period under review.

CHERAT CEMENT COMPANY

The Company has registered a substantial reduction in profit after tax for the year ending June 30, 2001 as compared to previous year. Profit came down from Rs 161.7 million for the year 2000 to Rs 97.8 million for the year under review. This also brought down dividend payment from 25 per cent for the previous year to 20 per cent for the year 2001. The reduction in profit can be attributed to two factors: reduction in sales which came down from Rs 1,424.8 million for previous year to Rs 1,341.5 million for the year 2001 and increase in manufacturing cost of cement.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

Hubco

23.65

19.25

23.60

571,600,000

PTCL

18.35

15/90

17.90

440,597,500

Engro

59.35

51.90

55.45

34,331,200

ICI

47.00

41.05

45.07

29,810,400

SNGPL

11.10

9.70

10.60

26,436,000

Fauji Fertilizer

42.20

38.70

40.80

20,748,200

Adamjee Ins.

43.60

37.00

42.90

14,426,000

FFC Jordan

4.20

3.70

3.90

6,162,000

SSGC

12.00

10.30

11.40

2,673,000

Indus Motor

11.95

10.85

11.60

85,000