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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 June 29, 2002

The equities market mostly moved sideways during the week. Partly due to June closing and partly because of lower level of investors' interest. Though, the tension on border seems to have reduced to some extent, India has not agreed to initiate meaningful dialogue as yet. Therefore, the level of uneasiness among the investors continue to persist.

It seems that the recent efforts of GoP to strengthen capital market has started paying off and TFCs have emerged as a booming market. There were six issues in the first half of the year 2002 totalling to Rs 2.61 billion. The new issues in the pipeline are by Muslim Commercial Bank, Crescent Leasing, National Development Leasing Corporation, Orix Leasing and Engro Chemical. With the reduction in yield on government securities as well as on T-Bills, TFCs have become attractive. This instrument is considered not only a secured means of earning fixed rate of return but also a means of earning higher than normal returns through capital gains.

ATTOCK CEMENT

The public offer for sale of 10 million shares has been under-subscribed and all the applicants are expected to get the number of shares for which they have applied. Out of the public offer of Rs 100 million subscription worth Rs 30.940 million was received. High hopes were attached to this public offer and the expectation was at least the full offer, based on company's track record. However, it seems that investors did not hold much interest for scrips belonging to cement sector. Initial report of export of cement to Afghanistan pushed the prices of a few scrips belonging to the sector, but later on lost the steam.

PAKISTAN TELECOMMUNICATION COMPANY

The giant will not enjoy monopoly in land-lines after a while. Therefore, it is planning to add new venues to maintain its edge. One such effort was hiring of a consultant to help establish an information system management accounts to segregate costs and revenues relating to each service so to ascertain each area's profitability. It was aimed at measuring deficit, cross-subsidies and price arbitrages. The consultancy project was also to enable the company to develop a suitable strategy to deal with the threat of falling international settlement rates. However, the last tranche was withheld and consultant has filed a suit. It seems that consultant has gone to the court to ensure the payment before the giant utility is privatized.

PAKISTAN STATE OIL COMPANY

The GoP has announced that from July 2002 onwards, oil marketing companies are allowed to import HSD from any source and fix ex-depot price on the basis of the local supplies from refineries and import cost competition instead of the present system of averaging out the import cost among the three marketing companies. PSO controls over 60 per cent of the HSD market share. Even though the deregulation of HSD would result in higher competition among the marketing companies, PSO would have a distinct advantage due to larger storage infrastructure and retail outlets. Privatization of the company is expected to be completed in the last quarter of this calendar year. Therefore, the interest of investors in the scrip is expected to remain high in the coming days, simply because of the current quoted price and dividend forecast.

MILLAT TRACTORS

The Jan-March 2002 financial results indicate massive reduction in profit before tax. Profit declined from Rs 120 million for the corresponding period of last year to Rs 57 million for the period under review. The cumulative results for nine-months period also indicates a similar trend. The key reasons being: reduction in sales and other income, increase in selling and general expenses, financial charges. All these trends confirm declining purchasing power of farmers and availability of credit for the purchase of agriculture implements.

SINDH ABADGAR'S SUGAR MILLS

Quarterly results (particularly for Jan-March period) for a sugar mill may not of any interest. However, this year one needs to see the adverse impact of large quantity and ill-timed import of sugar. The financial results indicate that sales came down to Rs 85.5 million for the quarter under review from as high as Rs 226.8 million for the corresponding period of last year an adverse import of huge stock of sugar available at the wholesale markets. This seems to be the common problem of all the sugar mills and particularly those operating in Sindh.

ISHAQ TEXTILE MILLS

The half-yearly financial results of the company seems a little different to begin with, looking at the sales. However, as one goes further, it transpires that profit before tax reduced to half of the amount earned during the corresponding period of last year. The detailed analysis indicate increase in cost of sale, reduction in trading profit and hike in financial charges. Profit for the last year would have been higher had the company not incurred about Rs 6.5 million loss on disposal of fixed assets. The company made a profit of Rs 92 million under this head during the period under review.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

23.30

23.20

23.20

85,103,000

P.T.C.L.A

17.35

17.15

17.15

52,086,000

National Bank

20.55

19.35

20.55

22,045,500

M.C.B.

29.10

27.40

29.10

16,735,500

Sui North Gas

13.90

13.70

13.80

7,525,000

I.C.I.

40.30

40.05

40.20

6,991,200

Adamjee Ins

37.20

36.65

36.65

3,601,500

Sui South Gas

12.05

11.90

12.05

348,000

PICIC Comm Bank

12.40

12.00

12.15

157,500

Askari Bank

19.35

19.05

19.15

41,500