STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated July 27, 2002

 

While the equities market around the globe continue to witness massive erosion in value, KSE-100 has remained range bound during the week. Market is expected to move up with the announcement of financial results by PSO, HUBCO and fertilizer companies. PTCL may come under pressure due to filing of bankruptcy, under Chapter 11, by WorldCom.

 

Analysts expect significant resistance from the equities brokers on the SECP's fresh move to bar them from becoming directors of listed companies. While the move may be justified, the immediate consequence can be negative for the market. The motives behind this SECP decision are: check on insiders' trading, separation of brokers from investors, an attempt to induct more professionals on the board and improve corporate governance level.

Leasing sector TFCs constitute around 30 per cent of the country's corporate debt market and are poised to make further inroads. Two leasing companies, Dawood Leasing and Orix Leasing are set to offer second tranche of their TFCs. The flotation of these two TFCs will raise the size of Pakistan's corporate debt market to Rs 21.7 billion out of which Rs 2.4 billion have been issued in the month of July alone. The return on the TFCs of Dawood and Orix vary in complete proportion to their risk profile. The security arrangement is similar in nature but the quality of the asset pledged is different.

BSJS BALANCED FUND

The Board of Directors of the Fund has announced a net profit of over Rs 56 million and also approved 15 per cent dividend for the year ending June 30, 2002. It is the first announcement of any listed company for the year ending June 30, 2002. During the year under review, Security Stock Fund, with a paid-up capital of Rs 100 million was merged with the Fund. The net asset value of the unit after appropriation of dividend comes to Rs 12.36 only. The investment reflects balanced pattern between equity and fixed income securities. The investment in equities was Rs 243 million and exposure in debt instruments to the tune of Rs 35 million. The other investments included short-term money market instruments and carryover trade (COT).

PAKISTAN STATE OIL COMPANY

The decision to invite bids for furnace oil supply to WAPDA is likely to reduce company's hold over its historically captive market. This could result in a loss of market share if the company fails to win the bid. WAPDA has invited bids for the supply of 11,000 tonnes furnace oil for the month of August and September 2002. PSO with a 86 per cent market share of furnace oil also has the largest storage capacity. However, some analysts believe that the GoP may intervene to restrict WAPDA to purchase furnace oil from PSO.

HUBCO

In the backdrop of current turmoil in the global equities market and expected announcement of 30 per cent dividend for the year 2002, the scrip offers attractive dividend yield of over 28 per cent for the year 2002. It is an attractive scrip for fundamentally driven income oriented institutional and individual investors, both local and foreign. It offers very attractive return for foreign investors focusing on the emerging markets.

PAKISTAN INTERNATIONAL AIRLINE

The Board of Directors of the company has approved the purchase of six aircrafts from Cathay Pacific, five of which the company was already using on lease basis. The total cost of the deal is estimated around US$ 62 million. A sum of US$ 2.5 million has been paid in advance. The Board also approved replacement of entire fleet of 11 Fokkers by eight comparatively new models. The average age of PIA's fleet is estimated between 12 to 40 years, according to a KASB report. The most pressing decision that need to be made at the moment by the company is updating of the fleet.

KOHINOOR ENERGY

The company has announced provisional financial results for the year ending June 30, 2002. The EPS improved from Rs 2.97 for the year 2001 to Rs 4.80 for the year under review. The company did not announce any dividend payout. The company has posted a profit before tax of Rs 813 million for the year 2002 as compared to a profit of Rs 523 million for the previous year. The factors which can be attributed for this improvement are: increase in sales and better control on cost of goods sold and reduction in financial charges. Sales increased from Rs 1,698.5 million to Rs 1,219.4 million. Financial charges came down from Rs 449.7 million to Rs 330 million.

MAHMOOD TEXTILE MILLS

The company has announced third quarter results. Due to reduction in sales during nine months as compared to corresponding period of last year, the EPS came down from Rs 9.50 to Rs 7.47. The factors which have led to some improvement are: lower operating expenses and the reduction in financial charges. Operating expenses came down from Rs 124.9 million to Rs 117.8 million and financial charges from Rs 83 million to Rs 70 million. Another contributing factor was the increase in other income, from Rs 0.982 million to Rs 3.5 million.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

24.60

23.90

24.30

96,708,500

P.T.C.L.A

17.95

17.60

17.70

56,725,000

P.S.O. XD

143.60

138.30

138.95

36,886,500

National Bank

21.70

20.85

21.10

12,591,500

K.E.S.C.

5.30

4.85

4.85

12,376,000

D.G.K. Cement

10.20

9.80

9.95

6,764,500

Sui North Gas

14.25

13.95

14.10

4,939,500

Kohinoor Energy

15.90

14.30

15.15

912,500

Sui South Gas

12.40

12.25

12.30

640,000

Shell Pak

214.90

212.00

212.00

2,300