expected to be positive for most of the companies. Announcement of election schedule and proposed constitutional amendments may move the market in either direction.

Yet another factor which has the potential to move the market is the much awaited results of National Bank of Pakistan. Though, as such, it may not depict any thing due to merger of NDFC with the bank, it could only reduce the profit.

ENGRO CHEMICAL PAKISTAN

The public offer of Rs 200 million TFCs, has been four-and-a-half times oversubscribed. This was part of the total issue of one billion rupee. Earlier, TFCs worth Rs 800 million were placed privately. The purpose of issue of TFCs is to finance the ongoing capital expenditure programme, energy conservation and environmental improvement projects. The TFCs carry a variable profit plan with minimum rate of 11% and maximum of 15% based on the auction results of the five-year Pakistan Investment Bonds.

PAKISTAN TELECOMMUNICATION COMPANY

The company plans to spend over Rs 18 billion to add 600,000 new connections. The increase in capex, likely to appear in year 2003 financial statement should result in deferred tax advantage due to increase in initial depreciation allowance from 40% to 50% from July 2002. The company's international revenue is approximately US$ 350 million. Out of this nearly 30 to 35 per cent of call traffic come from the USA. This is mainly through AT&T, MCI and Sprint. MCI was takenover by WorldCom in 1997. PTCL has major exposure with AT&T and MCI. Therefore, if WorldCom faces any problems in payment there could be negative implications for PTCL. Though, the probability of such happening may be very low, investors must follow WorldCom very closely.

NEW JUBILEE INSURANCE

The company is in the process of acquiring Commercial Union Life Assurance, which has not been performing very well. Would NJI be able to transform the newly acquired entity into a profitable venture? NJI's performance over the past few years has been exceptionally good. While others in the non-life insurance business crumbled, NJI stood tall and weathered the storm. Even though net income dropped for year 2001, its net income as a percentage of premiums earned was 22 per cent. Whereas Adamjee and EFU General's net income as a percentage of premiums earned was negative 17 per cent and one per cent respectively. Management expenses as a percentage of premiums was 19 per cent as against an average of 29 per cent for the sector.

COMMERCIAL UNION LIFE ASSURANCE

It is the second largest company in the private life assurance sector in terms of premium earned. The company generated premiums of Rs 363 million in year 2001, a growth of 66 per cent over the previous year. However, claims increased by 78 per cent which were well above the sector average of 32 per cent. Analysts attribute the excessive growth in claims to two factors: 1) the overall economic conditions and 2) inability of the company to select the customers carefully. The company has been also paying excessive commission. Therefore, from investors' perspective, the takeover by NJI may bring some hope. Can NJI bring the change?

ABBOTT LABORATORIES
The merger of former Knoll with Abbott became effective from July 01, 2001 and the financial statement reflect the combined results of the merged entity. The 2001 operating results are not comparable with the year 2000 due to different accounting periods. On a prorata basis the net sales registered a growth of 6.2 per cent which may be considered reasonable in the backdrop of economic slow down. Despite depreciation of rupee, general inflation and non-receipt of price increase in 2001, the 32.8 per cent gross margin as a percentage of sales is comparable to last year's 33.4 per cent. Profit after tax for the year increased to 10.4 per cent mainly due to favourable product mix, manufacturing efficiencies and a significant reversal of provision for taxation no longer required. The Board announced 40 per cent final dividend. An interim dividend of 15 per cent was already paid.

MEEZAN BANK

The quarterly results of the bank, for period ending March 31, 2002, indicates massive reduction in profit before tax as compared to corresponding period of last year — a decline from Rs 120 million to Rs 63.6 million. Net income from financing declined from Rs 27.7 million to Rs 21.9 million. As against this other income increased from Rs 48.8 million to Rs 69.6 million. The main reason for the decline in profit seems a loss of Rs 3.7 million, as against a profit of Rs 88.5 million, on currency swap arrangement.

MOVEMENT AT A GLANCE
SCRIP	HIGH (Rs.)	LOW (Rs.)	CLOSING  PRICE	TURNOVER  (SHARE)
Hub Power	24.10	23.95	23.95	55,509,500
P.T.C.L.A	17.55	17.40	17.45	29,239,500
National Bank	21.00	19.95	19.95	15,529,000
Engro Chem.	61.65	61.00	61.00	6,371,100
M.C.B.	25.85	24.75	24.80	6,204,000
Fauji Fert	48.90	48.25	48.25	5,542,700
Adamjee Ins	37.80	36.25	36.25	2,245,500
B.O. Punjab	11 50	11.40	11.40	702,500
Askari Bank	19.50	19.45	19.50	485,500
New Jubilee Ins	45.70	45.70	45.70	—

 

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