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 1. FINEX WEEK
 2. STOCK WATCH
 3. STOCK MARKET AT A GLANCE

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STOCK WATCH

By SHABBIR H. KAZMI
Updated Apr 20, 2002

The market during the week continued its sideways movement. However, there were surprises like quarterly results of Lever Brothers. Market anxiously awaits results of Sui twins and PTCL. Any potential hype in HUBCO has been reduced to zero after the company announced that the Board of Directors would not consider interim dividend payment at the time of approval of quarterly results. In the mean time speculative activities in selected scrips is evident from COT market review.

Both the COT rate and investment volume was lower compared to previous year. There seems to be a shift in interest from PTCL and HUBCO to PSO. The highest investment was witnessed in PSO, going up from last weekÝs average of about Rs 1.19 billion to Rs 1.35 billion. In case of HUBCO average investment came down from Rs 1.37 billion to Rs 1.33 billion. PTCL also witnessed reduction in investment by Rs 140 million to Rs 955.4 million.

LEVER BROTHERS

The company announced its quarterly results, which many of the analysts could not believe at the first glance. Sales growth for the quarter indicates earlier than anticipated top line growth. This is a positive sign and reflects the slowly picking up of the economy. Core profitability improved noticeably during this period as reflected by an improvement in the gross margin to over 30 per cent. With 40 per cent sales accruing to the beverage division, tea prices played an important role in determining gross margin of the company. Edible oil prices rose by approximately 32 per cent, as compared to corresponding period of previous year. However, the effective increase in price was diluted due to the impact of the strengthening rupee. The companyÝs results for the full year are expected to show improvement relative to last year.

DEWAN SALMAN FIBRE

According to an ADK Securities report, the company has clarified a number of issues related to issue of preferred shares. The management is considering various options. However, whatever option it may exercise, it is unlikely to lead to any earnings dilution for minority shareholders and there may actually be earning enhancement. The contemplated issue appears to be a longer-term move to switch to the capital markets from bank funding. The company has been able to repay substantial debt since it acquired Dhan Fibres, an acquisition that appears to have worked well.

KESC

The restructuring efforts being made at KESC seems to have sparking positive signals. Allied Energy System (AES), already have interest in two IPPs in Pakistan, has submitted a LoE to acquire shares in KESC. Although, many pundits were expecting that the privatization of KESC would fail to generate any interest considering the huge losses, the result has been otherwise. AES had previously also shown interest in acquiring a controlling stake in the utility when the GoP was considering its privatization as back in 1999. The Privatization Commission has received some sold interest for the acquisition of controlling stake in KESC on the back of which it has under taken the present restructuring plan.

SUI SOUTHERN GAS COMPANY

The company is expected to announce its third quarter results on April 23. Analysts expect the company to post a profit after tax of ranging from Rs 325 million to Rs 350 million for the quarter. The increase in gas tariff would result in improved cashflow and a higher gas development surcharge. This will reduce help in containing financial charges. However, it is unlikely to affect the companyÝs revenue. The company plans to sell its gas purification plant at book value to Pakistan Petroleum, the operator of Sui gasfield.

SUI NORTHERN GAS PIPELINE COMPANY

The company is expected to post profit after tax ranging from Rs 350 million to Rs 400 million for the third quarter. For the nine months profit is expected to be above one billion rupee. The primary reason for this improved performance is a reduced debt-servicing burden, mainly due to repayment and restructuring of loans carried out during last year. The company is also expected to benefit from hike in gas tariff and improved liquidity will help in further reduction in financial cost. The company has also undertaken expansion programme with borrowing, at competitive rate. Therefore, there will increase in operating profit on the back of capitalization of expansion projects. For the full year, profit after tax may touch Rs 1.5 billion, up 15 per cent, and dividend payout of around 17 per cent.

CRESLEASE

The company has posted an operating profit before tax and provisions of Rs 60.7 million during July-March period. The profit increase was due to increase in total leases, effective risk management strategy and a diversified portfolio. The company has a balance sheet footing of Rs. 1.4 billion with an annualized EPS of Rs. 2.28. The company was recently assigned the long-term rating of A+ by JCR-VIS rating agency.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

24.90

24.00

24.30

180,428,500

P.T.C.L.A

19.30

18.65

18.70

112,817,500

Sui North Gas

14.70

14.00

14.40

42,920,500

National Bank

24.30

22.95

23.95

31,477,000

I.C.I.

57.95

52.00

52.00

28,350,500

K.E.S.C.

7.65

6.95

7.10

16,075,500

M.C.B.XD

28.20

26.80

27.40

9,129,500

Adamjee Ins

42.90

38.75

39.25

7,200,000

Sui South Gas

13.60

12.80

13.25

2,876,500

Lever Bros.

950.50

900.00

940.00

7,340