STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Mar 15, 2003

 

The curtailed trading days and uncertainty regarding the US attack on Iraq kept the investors on sidelines. Some analysts believe that getting the resolution approved, regarding attack on Iraq, may not prove as easy as initially perceived by the US. The motive has become clear. It is neither the weapons of mass destruction nor the change of regime in Iraq.

 

 

 

 

Unless the US is willing to share the pie (oil) with other permanent members of Security Council, prospects of getting the resolution approved remain slim.

During the week, lack of retail investors was evident. However, some major speculative activity was witnessed in PSO, in the backdrop of its anticipated privatization. Some activity was also visible in fertilizer stocks. However, with the GoP's intent to bring down urea prices, without easing feedstock prices, skepticism about the profit margins was high. There was news that Pakistan may achieve higher production of sugar but mills located in Punjab would be able to achieve higher output. The mills located in Sindh would not be able to achieve the level attained last year.

CHERAT CEMENT

There seems to be no end to the woes of cement sector. A closer look at the financial results of company shows that most probably cement is liable to highest government levies in the country. During July-December 2002 the company paid 458.2 million as excise duty and sales. It was also evident that all those cement producing that do not switch over from use of furnace oil to coal would not be able to compete in the market, due to the oversupply of cement. Out of Rs 774.96 million net sales a sum of Rs 680.69 million went towards cost of goods sold, leading to Rs 94.28 million gross profit. The company had posted Rs 119.15 million for the corresponding period of year 2001. Due to tough competition operating expenses went up from 40.34 million to Rs 46.13 million. Financial charges also grew from Rs 19.43 million to Rs 25.5 million.

CHERAT PAPERSACKS

The company has posted Rs 37 million profit after tax for July-December 2002 as compared to a loss of Rs 1.66 million for the corresponding period of previous year. Sales improved from Rs 270 million to Rs 290.7 million. Gross profit went up from Rs 13.8 million to Rs 67.4 million. The Board of Directors did not hesitate in sharing the benefit of higher profit with the shareholders and approved distribution of 50% interim dividend. This company has a low paid capital that is evident from the fact distribution of 50% dividend would result in outflow of Rs.20.4 million only.

BABRI COTTON MILLS

The company has posted Rs 16.4 million profit after tax for the year ending September 30, 2002 as against a profit of Rs 46.9 million for the previous year. The Board of Directors approved distribution of 35% dividend among the shareholders. The reduction in profit can be attributed to two factors, lower sales and higher cost of production. Sales came down from Rs 407.7 million to Rs 399.6 million. Cost of goods sold went up from Rs 3226.7 million to Rs 347.1 million. Operating expenses grew from Rs 13.95 million to Rs 15.57 million.

JANANA DE MALUCHO TEXTILE MILLS

The company has posted Rs 31.8 million profit after tax for the year ending September 30, 2002 as against a profit of Rs 53.2 million for the previous year. The Board of Directors approved distribution of 30% final dividend. An interim dividend of 30% was paid earlier, making the total payout at 60% for the full year. Sales came down from Rs 490 million to Rs 461.6 million. The management succeeded in containing cost of goods; rather it came down from Rs 395.6 million to Rs 388.3 million. A reduction in financial and other charges helped in containing further erosion of profit.

 

 

BANNU WOOLLEN MILLS

The company has posted Rs 46 million profit after tax for the year ending September 30, 2002 as compared to a profit of Rs 40 million for the previous year. The Board of Directors approved distribution of 20% final dividend among the shareholders; an interim dividend of 30% was paid earlier, making the total payout at 50% for the full year. Though, sales for the year 2002 were lower as compared to previous year, profit after tax was higher. This can be attributed to better controls over cost of goods sold and operating expenses.

ACCORD TEXTILE MILLS

The company has posted Rs 35.6 million loss for the year ending September 30, 2002 as compared to a loss of Rs 31.3 million for the previous year. During 2001 and 2002 the company was not able to recover even cost of goods sold. For the two years the company has posted a gross loss of Rs 18.5 million and Rs 22.3 million respectively. There seems to be no sign of improvement in the way the company is being managed. It has been incurring loss for many years. As at September 30, 2002 accumulated losses of the company exceeded Rs 644.3 million. With each passing day, the probability of its turn around continues to diminish.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

36.05

34.90

36.05

101,120,500

P.S.O.

202.40

196.75

202.40

69,590,400

P.T.C.L.A

21.70

20.90

21.70

36,504,500

Pak PTA Ltd.

7.60

7.10

7.60

8,693,000

M.C.B.

32.50

28.70

32.50

7,104,000

National Bank

25.60

24.60

25.60

3,665,000

Adamjee Ins

40.95

39.00

40.95

2,508,500

Shell Pak

373.00

341.00

373.00

904,700

Askari Bank

25.50

24.50

25.50

263,500

Union Bank

9.25

8.90

9.25

70,000