STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Sep 07, 2002

 

On September 6, 2002, the last day of trading for the week, the KSE-100 index breached 2000 points psychological barrier. For the last couple of weeks the index was hovering a little below 2000 points but failed to cross this psychological barrier. This has happened after nearly thirty months. Last time it was in March 2000 that the KSE-100 index

 

crossed 2000 level. At the back of improved economic fundamentals the index is expected to continue its upward movement, but not without technical corrections. As a result of tussle between the regulators and the brokers, the Managing Director of Karachi Stock Exchange resigned, as he could not bear the pressure. The General Manager has been made the acting Managing Director. However, prospects of his confirmation remains very low because of a number of reasons. It also seems that the brokers have accepted the SECP's directive regarding composition of the Board of Directors.

During the week, the COT market remained stable and no major fluctuations were witnessed. Bulk of the COT remained confined to PSO and HUBCO. While there was increase in the COT investment in PSO, there was a decline in the COT investment in HUBCO, attributed to lower than expected final dividend announcement.

HUBCO

The financial results for the year ending June 30, 2002 show an overall balanced performance by the company. The Board of Directors also announced 36 per cent final dividend, making the total payout at 76 per cent. The turnover for the year 2002 remained at Rs 21 billion as against Rs 29 billion for the previous year. The company managed to improve its gross margin from 29 per cent for the year 2001 to 46 per cent for the year under review. Even the closure of one generator, accounting for 25 per cent of the total capacity, for some time did not increase operating cost significantly. Operating and other expenses registered 33 per cent decline, from Rs 479 million to Rs 320 million. One element which contributed towards higher income was the reversal of the provision made last year against the doubtful debt, amounting to Rs 5.3 billion.

COLGATE-PALMOLIVE PAKISTAN

The company has released its financial results for the year ending June 30, 2002 and also announced 55 per cent dividend. It has improved its payout as compared to previous year's 35 per cent dividend. The story started with increase in sales. Sales increased from Rs 1,951 million to slightly less than Rs 2,246 million. Gross profit improved from Rs 543.4 million to Rs 578.9 million. Operating profit went up from Rs 168 million to Rs 219.8 million. There was also increase in financial and other charges, from Rs 31 million to Rs 39.7 million. This was partly compensated by increase in other income.

UNION BANK

State Bank of Pakistan has allowed Union Bank to purchase Emirates Bank International's Pakistan operation at a price of US$ 38 million. Emirates Bank has 10 branches in 8 cities of Pakistan and a deposit base of Rs 13 billion. Whereas Union Bank has 32 branches in 11 cities. At the end of year 2001, Union Bank had total assets of Rs 30 billion and total deposits of Rs 21 billion. As a result of this merger, Union Bank is expected to emerge stronger with larger deposits and number of branches. However, relocation of some of the branches of merged entity is eminent.

SAUDI PAK COMMERCIAL BANK

The financial results, for the first half of year 2002, released by the bank reveals some interesting information. However, the bottom line was that it managed to post Rs 2.1 million profit before tax as against a loss of Rs 63 million for the corresponding period of last year. Mark-up earned came down and so does mark-up paid. The net mark-up income improved from Rs 57.6 million to Rs 72.4 million. However, provision against non-performing loans and advances amounting to more than Rs 79 million changed the complexion. Fee based income which was negative Rs 10.7 million for the corresponding period of last year, became positive Rs 90 million for the period under review. Similarly non mark-up expense came down from Rs 110 million to Rs 56 million.

NATIONAL BANK OF PAKISTAN

The Cabinet Committee on Privatization has recently approved additional offering of 5 per cent GoP shares in the Bank with a green shoe option to offer an extra 5 per cent in case of over subscription. The Lead Managers to the GoP for the IPO of National Bank completed in November 2001, Elixir Securities and Taseer Hadi Khalid & Co., have been retained for the said additional offering of shares. According to the information available from Privatization Commission additional shares of the bank will not be offered at par value. The offering price mechanism contemplated for the additional offering of National Bank shares will form part of the offer for sale document and it is expected to provide an attractive investment opportunity for investors keeping in view the strong fundamentals of the bank and prevailing market price.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

28.55

27.95

27.95

288,251,500

P.T.C.L.A

20.35

19.55

20.35

193,708,500

M.C.B.

27.20

25.10

27.20

26,240,500

Sui North Gas

15.45

14.95

15.45

20,433,000

Pak.PTA Ltd.

5.90

5.40

5.85

17,484,500

Dewan Salman

14.80

14.30

14.80

15,929,000

Adamiee Ins

43.70

41.80

43.70

8,966,000

I.C.I.

40.50

39.70

40.50

8,603,100

Nishat Mills

15.85

15.30

15.85

2,065,500

Sui South Gas

13.80

13.60

13.80

1,989,500