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THE KASB REVIEW
STOCK MARKET AT A GLANCE

  1. FINEX WEEK
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  3. STOCK MARKET AT A GLANCE

The KSE - Overview:

Updated on Feb 19, 2001

The KSE-100 Index remained volatile during the week and the tussle between the bulls and the bears continued. The Index closed at 1512 levels on Friday, 15 points up from the previous week's close and with ADV at 147.96mn.

At the start of the week the Index gained 26 points but this One-day euphoria subsided after receiving the disappointing results of Shell Pakistan. This removed any chances of positive results from the OMC sector. With Shell down, the market discarded off any expectations of a positive surprise from PSO and the Index closed 21 points down. The very next day PSO gave the market a breather by announcing better than expected results.

Consensus forecast for PSO had ranged from 1.0-1.1 billion for the half year after tax profits. In the event, the company showed a net profit of PkR 1.355 billion, up 58% YoY. After seeing the results we believe that a sharp increase in other income and sales jump of 54.7%, due to rising prices of major products of PSO, were the major factors behind its profitability. We feel that the growth in revenue is not going to be repeated in 2H01 as the prices of POL products have already deceased by 22% from the corresponding period, which will effect the results of PSO in the next half of the year under review. Over the week, Shell, PSO, PTCL, Hubco and ICI have been the most active stocks. Hubco was prominent gainer, amidst unconfirmed rumours of a bonus issue. And after trading a hefty volume of 190.6 million, it closed 7.36% up on the last day at 21.15. The average Badla rate was 15.4%, indicating a possible strengthening in the market in the near future. Technically the trend is still positive and the key resistance for the Index is still at 1525, breach of which may lead the Index to higher levels. However, a 110% earnings jump in SSGC and a 28.4% increase in net profit of Ibrahim Fibres have had only a marginal affect on the market sentiments. We, therefore, do not foresee any reason for an upward break through in the coming week.

SECTOR OUTLOOK

Paper & Board Sector: Kudos to Paper

Its 2001, the setting for most 60's sci-fi space thrillers, but even the paperless office is not a reality. Cathy, of the comic strip, continues to be inundated with work in her 'In' tray in physical form. However, one thing has surely changed. The demand for high quality paper as well as board has gone up relative to the lower quality variety. Lower quality paper for rough work is of limited use in work places where computers have taken over. Furthermore increasing competition demands grabbing consumer's attention not just with a better product but attractive packaging. And though this trend is definitely more pronounced in the West, it is increasingly emergent in Pakistan.

Take a look at the results of Packages Limited, Century Paper and Board Mills and Security Papers Limited, the premium product companies in the Paper and Board Sector in Pakistan. Each of these three companies has market capitalization of over Rs. 500 mn. Packages and Century are in the market for both paper and board products, while Security restricts itself to the niche market of high quality paper used for printing bank notes and non-bank security paper.

The three companies posted combined sales of Rs. 5,883 mn for FY00, a 8.1% increase over FY99 sales of Rs. 5,443mn. Security Papers overtook Century Paper's FY99 sales growth of 14.1% by recording sales growth of 32.5% to apparently become the fastest growing company of the three, with respect to sales. Of course this had a lot to do with the fact that Packages has a higher base sales figure i.e. approximately Rs. 3 billion over the three year period we considered. The base sales figure for Century is approximately Rs. 1.4 bn while for Security Papers this figure for the period is just under Rs. 350 mn.

In fact all three companies have shown steady sales growth during the period. Security led the group by recording Compounded Annual Growth Rate on its sales of 22.3% between FY98 and FY00. Over the same period Century's CAGR on sale was 10.1% while Packages' was 8.4%.

Gross Profit, for the three companies taken as a unit increased marginally by 1.4% in FY00. Security Paper's Gross Margin for the period was clearly superior by far at 57.6%. Packages followed with Gross Margin of 33.8% while Century lagged behind in the group at 22.5%. Thus the Gross Profit for the companies varied widely largely due to the difference in the grades of paper and board produced by the three companies.

MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US$ bn)

6.40

6.42

0.31

KSE 100 Index

1496.95

1512.84

1.06

Total Turnover (mn shares)

739.81

50.05

793.04

Value Traded (US$ mn.)

405.83

587.72

44.82

No. of Trading Sessions

4

5

 

Avg. Dly T/O (mn. shares)

123.26

147.96

20.04

Avg. Dly T/O (US$ mn)

101.46

117.54

15.86

MSCI Pakistan Index:

Pak Rs.

99.40 99.45

0.05

US $

42.82 43.13 0.74

.Source: KSE, MSCI, KASB



ASIA PACIFIC & AUSTRALIA
EXCHANGE INDEX LEVEL CHANGE EXCHANGE

Bombay

BSE

4330.32

-107.67

-2.43%

Hong Kong

Hang Seng

15630.31

-126.06

-0.80%

Singapore

Straits Times

1971.56

-3.99

-0.20%

Sydney

S&P ASX 200

-5.60

0.17%

3320.1

Tokyo

Nikkei

13175.49 -151.90

-1.14%

.



EUROPE & UNITED STATE OF AMERICA
EXCHANGE INDEX LEVEL CHANGE EXCHANGE

Frankfurt

DAX

6481.71

-109.96

-1.67%

London

FTSE

6088.3

-109.60

-1.77%

Paris

CAC 5595.13

-109.40

-1.92%

Dow Jones

Industrial

10799.82

-91.20  

NASDAQ

Composite

2425.38

-127.53