. .



By SHABBIR H. KAZMI
Updated Dec 08, 2001

The week witnessed major activity in HUBCO and PTCL shares. While the trading in HUBCO was driven by market manipulators, activity in PTCL was driven by improved earning potential. There was a revival in trading of scrips from cement sector. While some analysts forecast for hike in offtake due to commencement of reconstruction in Afghanistan, others believe that cement import for Afghanistan will be more economical from India, Iran and Central Asian states. There was some sporadic activity in leasing sector. While some of the scrips offer attractive yield, investors could not buy shares because the high yielding scrips are illiquid.

Analysts hint towards a negative trend due to issue of right shares by leasing companies at a discount. They say that most of the issues are being underwritten by the sponsors and ultimately taken up by them. This will lead to concentration and will be against the philosophy of broad-based shareholding.

NATIONAL DEVELOPMENT LEASING CORPORATION

The company has posted Rs 47 million profit after tax and declared 10 per cent dividend for the year ending June 30, 2001. Lease disbursements made during the year 2001 increased by 80 per cent over the disbursements made during the previous year. There was a conscious shift towards small ticket leases. The share of small tickets leases amounted to 40 per cent of the total disbursements during the year. Net addition to lease portfolio resulted in 10 per cent increase in total assets, which stood at over Rs 5 billion as at June 30, 2001. The company continued to follow its conservative and prudent policy and made adequate provision for potential lease losses to strengthen the balance sheet. During the year, the Company introduced hire purchase and consumer leasing to corporate employees. To secure future funding requirements, the second issue of TFCs is being considered.

PAKISTAN INDUSTRIAL LEASING CORPORATION

The Company has posted Rs 24.8 million profit after tax for the year ending June 30, 2001 as compared to a profit of Rs 21.4 million for the previous year. Higher revenue was due to increase in return on short term placement and other advances. On the expenditure side, administrative and other operating expenses increased from Rs 49.6 million to Rs 62.7 million. The higher profit was mainly due to lower provision for doubtful receivables which came down from Rs 88.4 million to Rs 75.8 million. This enabled the company to improve its dividend payout from 7.5 per cent for year 2000 to 10 per cent for the year under review. EPS also improved from Rs 0.99 to Rs 1.14 during this period.

DAWOOD LEASING COMPANY

The company has posted Rs 31.5 million profit after tax for the year ending June 30, 2001 more or less at the level of previous year. It also maintained dividend payout at 10 per cent. Revenue increased from Rs 214.4 million to Rs 272.7 million and expenditures went up from Rs 172.8 million to Rs 225.4 million. Increase in revenue was mainly due to higher lease income, return on deposits and investments and exchange gains. Expenditures went up mainly due to increase in financial charges and provision for lease losses. EPS (post tax) improved from Rs 1.24 to Rs 1.27.

CRESCENT LEASING CORPORATION

The performance of CreLease during the year ending June 30, 2001 showed significant improvement over previous year despite economic slow down and weak demand for long term investment. Profit after tax amounted to Rs 42.26 million, higher by 37.3 per cent than previous year profit. New leases written during the year were 52.5 per cent higher than those written in the previous year. Increased emphasis was on vehicle leasing at retail outlets and consumer leasing at corporate levels. Vehicle leasing amounted to 28.4 per cent of total disbursements. Despite posting over Rs 42 profit, the Board of Directors did not declare any dividend and preferred to transfer to reserves under NBFI rules, for deferred taxation and for bonus shares. It is interesting to note that while paid-up capital amounted to Rs 201.3 million, reserves were as high as Rs 179.5 million.

PACIFIC LEASING COMPANY

The Company has posted loss after tax of Rs 20 million for the year ending June 30, 2001 as against profit of Rs 14.6 million for the previous year. Revenue came down from Rs 59.7 million to Rs 56.3 million and expenditure went up from Rs 44.4 million to Rs 75.3 million. The details of these increases are: financial and bank charges went up from Rs 23 million to Rs 40.8 million, administrative and operating expenses from Rs 12.9 million to Rs 17 million, provision for diminution in value of investment from Rs 2 million to Rs 4.8 million and provision for potential lease losses from Rs 6.5 million to Rs 12.7 million. All these factors lead to a negative EPS of Rs 2.01 for the year 2001 as compared to that of a positive Rs 1.46 for the previous year.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

PTCL

18.30

17.75

18.15

74,887,000

HUBCo

20.45

19.20

20.35

19,510,000

Engro

56.95

55.30

56.95

8,921,300

Adamjee Insurance

37.10

35.20

37.10

5,851,500

Fauji Fertilizer

41.50

40.45

41.20

3,975,700

FFC Jordan

3.95

3.70

3.70

897,000

Askari Leasing

8.00

7.50

7.25

87,500

NDLC

4.35

3.65

3.65

41,000

Orix Leasing

25.00

24.50

25.00

27,500