The week can be termed as lack-lustre as no results which could drive sentiments bullish was announced. Daily trading volume also remained low. A similar situation is expected to prevail till end of Ramadan. However, soon after holidays selling may be witnessed in oil marketing companies and some buying in commercial banks. A sector, which has not succeeded in attracting the attention of investors is textile. Though, the number of listed companies in the sector is very large but only two dozen companies offer investment opportunities.

In conformity with the global practice, the Securities and Exchange Commission of Pakistan (SECP), has directed all the listed companies to submit their profit and loss accounts on quarterly basis. The same has to circulated among the shareholders, SECP and stock exchanges within one month of the close of the quarter. It is also desired that the SECP should also insist on greater disclosure, particularly retention of profit, and its planned utilization. It has been observed that many companies skip dividend, despite making handsome profit, without stipulating reasons for retaining the earnings.

Against the subscription offer for Rs 185 million, amount received was around Rs 902 million showing that investors reposed much faith on its financial footing. State Bank of Pakistan has allowed utilization of green-shoe option. The Privatization Commission has decided to increase the off-loading from 5 to 10 per cent. — amounting to Rs 370 million. A total of 23,851 applications were received from the investors and the significant feature was the tremendous response from overseas Pakistanis. The balloting is expected to be held shortly. According to President of NBP, the Bank's profit for year 2001 is expected to grow at least by 50 per cent compared to previous year.

Lucky joins the list of a few companies involved in cement manufacturing which have posted profit. The Board of Directors have approved 7.5 per cent dividend for the year ending June 30, 2001. This is the first dividend since the Company was listed in November 1994 and commencement of commercial production in June 1996. The Company has posted Rs 256 million profit which translates into EPS of Rs 1.05 for the year 2001 as compared to Rs 0.92 for the previous year. Lucky's EPS may appear smaller, but it must be remembered that it is a 100 per cent equity based company, with a paid-up capital of Rs 2,450 million. This meant distribution of Rs 183 million among the shareholders.

WorldCALL's earnings surprise for the year 2001 boils down to aggressive capacity expansion, which showed up in the bottomline through an increase in revenues and more importantly by allowing the company to defer taxation. The Company was able to post 47 per cent increase in profit after tax as compared to previous year. Since the expanded capacity became operational in the second half, the full impact of increase in revenue was not realized. Direct costs, as a percentage of sales, increased due to higher depreciation charges. This may not be a cause of concern because depreciation is merely non-cash expenditure. However, intense competition is expected to squeeze margins.

The company has posted about Rs 6 million profit before tax for the year ending June 30, 2001 as against a loss of Rs 19.5 million for the previous year. It was mainly due to increase in sales, from Rs 148 million for the year 2000 to Rs 198.8 million for the year under review. Out of an operating profit of Rs 19.38 million, Rs 11.87 million went towards financial charges. While profit after tax for the year 2001 was a meager Rs 2.5 million, accumulated losses as at June 30, 2001 amounted to Rs 36 million. Therefore, it may not be wrong to say that the Company will not be able to pay any dividend to its shareholders for many years to come.

The year ending on June 30, 2001 was not good for the cement plant located in Karachi. As a result of decline in sales its gross profit came down from Rs 13.7 million for the year 2000 to a gross loss of Rs 23.8 million. Though there was a decrease in financial charges and operating expenses were more or less at the level of previous year, other income came down from Rs 29.6 million to Rs 9 million during this period. Loss after tax hiked from Rs 50.8 million for the year 2000 to Rs 92.8 million for the year under review. This further increased accumulated to Rs 497.5 million at the end of year 2001. Javedan is a unit of State Cement Corporation which has to be privatized one day. However, it seems that the huge accumulated losses will not allow the GoP to get any attractive bid. Since cement sector suffers from gross under utilization of capacity, it may be more appropriate to just sell the plant as scrap and be contended whatever proceeds are realized from sale of land.