During the week market moved side ways and profit taking was witnessed. At the same time, there was report about speculative activity of a Lahore based investor. Some analysts, had already hinted towards this type of market movement due to a rather long weekend. In such a scenario it was not expected that investors would not take long positions.

However, there is a forecast that market may continue its bullish trend in the following week. The scripts which may witness major activity are, PTCL, HUBCO, ICI Pakistan, MCB, NBP and Nishat Mills. Analysts also hint towards an enhanced demand for Ibrahim Fibre.

The bank achieved a landmark as its term loan portfolio crossed one billion rupee as at December 31, 2001. There has been a shift in strategy, from big-ticket clients to small and medium enterprises, to diversify risk and enlarge its client base. The business volume grew by 50 per cent, from Rs 148 million to Rs 223 million. Profit after tax registered an increase of 27.6 per cent over the corresponding period of year 2000. The administrative and operating cost increased by 3.8 per cent. The management was able to maintain a firm grip on administrative expenses, which as a percentage of total income, declined from 133.8 per cent to 9.4 per cent. The bank has acquired a licence and commenced money market brokerage activities on November 12, 2001. This addition to the existing activities is expected to augment the fee-based income of the bank.

Dividend payout by the company for the year ending September 30, 2001 came down to 30 per cent as compared to a payment of 55 per cent dividend for the previous year. The decline can be attributed to two factors, higher cost of goods sold and hike in financial charges. Gross profit came down from Rs 436 million to Rs 387.7 million. Financial charges went up from Rs 119 million to Rs 159 million. The reason for higher financial charges was due to an investment of Rs 220 million for BMR for improvement in quality of finished products. The company aims to export about 80 per cent of total production at better price.

Profit after tax of the company for the year ended September 30, 2001 reduced to less than one fourth of the profit for the previous year. While there was increase in sales the hike in cost of goods sold created the real havoc. Sales grew from Rs 659 million to Rs 801 million. Cost of sales went up from Rs 488 million to Rs 813 million. Gross profit declined from Rs 172 million to Rs 88 million, nearly half of the amount for the previous year.

The year ending September 30, 2001 seems to be a bad year for the company. Sales came down and higher cost of goods sold reduced gross profit from Rs 83.5 million for the year 2000 to Rs 45 million for the year 2001. Administrative expenses doubled, from Rs 9.2 million to Rs 18.7 million. Financial charges came down from Rs 45 million to Rs 23 million. Profit after tax was reduced to a meager Rs 2.5 million. Therefore, no dividend was announced. For the year 2000 the company had paid 7.5 per cent dividend. Accumulated loss as at September 30, 2001 were reported at slightly more than Rs 252 million. It seems that shareholders of company will have to live without any return or be contended with a meager payout for many more years to come.

Despite lower sales volume the company was able to improve its gross profit for the six months period ending December 31, 2001. The reason for reduction in sales volume was lower despatches, which came down from 362,776 tonnes to 314,134 tonnes. Profit before tax at Rs 74 million was lower compared to Rs 82 million for the corresponding period of year 2000. This was mainly due to the fact that in year 2000 other income was about Rs 62 million, whereas in year 2001 this reduced to a negative Rs 7 million. A positive development was that as at December 31, 2000 accumulated losses were reported at Rs 98.6 million which became accumulated profit at Rs 138.5 million as at December 31, 2001. While export of cement to Afghanistan will have an overall positive impact on cement sector, profit margin of the company is expected to further improve due to conversion to coal use as well as better capacity utilization.

The six months period ending December 31, 2001 has added another Rs 90 million to accumulated losses, total loss touching Rs 454 million. While there was increase in sales, out of proportion increase in cost of goods sold led to Rs 30 gross loss. During the corresponding period of year 2000 the company had posted Rs 6 million gross loss. While there was increase in gross loss, financial charges also went up from Rs 33 million to Rs 55 million.