The KSE-100 index managed to gain 133 points despite profit taking being common during the week. Bullish sentiments prevailed and index breached 1800 level as the back of active buying by institutions and foreign fund managers. At this juncture analysts give contradictory forecast. Some analysts believe that the upward trend will continue till index breaches 2000 level and only then heavy correction are expected. The others believe that market manipulators are in full control of the market and in next couple of weeks a massive decline is expected. To support their point they say that huge badla and high badla rate clearly indicates that market suffers from over bought situation which will not last for very long.

Many analysts strongly apprehend profit taking by those who have the capacity to move the index in the direction, they want it to move. Therefore, regulators must keep their eyes open to avoid yet another crisis in equities market.

The refinery has posted Rs 465.8 million profit after tax for the six-months period ending December 31, 2001 as compared to a profit of Rs 225.4 million for the corresponding period of previous year. Yet the Board of Directors preferred to pay 15 per cent interim dividend, amounting to Rs 43.74 million. Unappropriated profit as at December 31, 2001 amounting to Rs 442.86 million included profit of Rs 407.451 million over maximum entitled return of 20 per cent on paid-up capital for half year transferable to reserve for expansion/modernization as per stipulations of the pricing formula and was not available for distribution. Sales (net) improved from Rs 9,841.79 million to Rs 10.496.93 million. Whereas cost of sales came down from Rs 10,049.79 million to Rs 9,642.26 million. However, expenses went up from Rs 220.38 million to Rs 245.29 million.

The brokerage house witnessed a complete reversal of fortune during the second half of year 2001. It posted loss after tax amounting to Rs 806,269 as against a profit of Rs 488,399 for the corresponding period of previous year. As a result of this loss, accumulated losses as at December 31, 2001 amounted to Rs 32.45 million. The main reason for the reversal of fortune was the massive decline in operating revenue which came down from Rs 2 million to Rs 0.392 million. Financial charges also went up from Rs 88,907 to Rs 236,118 but company managed to brought down operating expenses from Rs 1.82 million to Rs 1.25 million.

It is yet another brokerage house which registered a massive decline in profit due to loss on investment during the second half of year 2001, operating revenue doubled but loss on investment eroded the advantage to a large extent. Yet another factor contributing to huge loss was reduction in other income. While the brokerage house had registered other income amounting to Rs 73.49 million during the July-December period of year 2000, it posted a loss of Rs 1.97 million during the period under review. Income from share of profit of subsidiaries/associated companies reduced to one fourth, a decline from Rs 14.7 million to Rs 3 million. The brokerage house also made a provision of one million rupee for diminution in value of investment, whereas no such provision was made for the previous year.

The company has posted a gross loss of Rs 813,546 for the year ending August 31, 2001 as compared to a gross profit of Rs 309,086 for the previous year. However, the company managed to reduce profit after tax to nearly half of the loss posted in the previous year. The factors which can be attributed to this reduction were: reduction in administrative and selling expenses and financial charges and increase in other income. However, accumulated losses amounting to Rs 124.5 million should be a source of concern. It may take many years to wipe out these losses, though the probability is very low.

Earning per share, for the half year ending December 31, 2001 came down to Rs 0.73 compared to Rs 1.13 for the corresponding period of previous year. The hike in general and administrative expenses seems to be responsible for the decline, an increase from Rs 42 million to Rs 65 million. The advantage of higher revenue and lower provision for potential lease losses was also eroded due to increase in finance and bank charges.

Despite a hefty reduction in sales the company has been able to curtail its net loss before tax for six-months period ending December 31, 2001 as compared to loss for corresponding period of previous year. The factors for this improvement seem to be reduction in financial and other charges, a reduction from Rs 2.237 million to Rs 0.367 million. The company also managed to curtail operating expenses from Rs 4.283 million to Rs 3.671 million.