STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Mar 22, 2003

 

The US military action, supported by the UK and some other countries, was launched against Iraq during the week. The most surprising factor was the fall in crude oil prices to three months low. However, prices went up slightly after the attack commenced. The biggest fall out of this war seems to be for the local exporters of textiles and clothing industry, suspension of orders already placed and delay in confirmation of new orders.

 

 

 

 

The uncertainty remains high as the US administration hints towards a longer than expected war in Iraq.

Like many other international markets Pakistan also witnessed renewed interest in equities market as the uncertainty about war, when will it start, ended. The third quarter report of State Bank of Pakistan hinted that Pakistan was in a better position to withstand the adverse consequences of war, particularly due to hike in crude oil price. It also said that GDP growth would be close to the target due to improved availability of water and growth in manufacturing sector. However, the trade gap may widen due to the hike in oil import bill and pressure on exports.

Investors' interest in leading scrips remained high. Most of these companies cater to the local customers and demand for their products is inelastic. Fertilizer scrips, despite fear of reduction in their margins due to reduction in urea prices due to the GoP pressure, witness higher investors' interest. Major activity in commercial banks cannot be ruled out in the following weeks. The Sui twins also witnessed some major activity.

PAKISTAN REFINERY

The refinery has posted Rs 416.7 million profit after tax for the first half of year 2002-03 as against a profit of Rs 10 million only for the corresponding period of last year. The Board of Directors also approved distribution of 25% interim dividend. The company had also paid 25% interim dividend for the corresponding period of previous year. The EPS improved from Rs 2.34 to Rs 20.83. The rise in profit is attributed to higher sales and better cost controls. Net sales grew from Rs 12,176 million to Rs 14,107 million. Cost of sales went up from Rs 12,007 million to Rs 13,429 million. As a result, operating profit hiked from Rs 127 million to Rs 624 million. Though there was increase in administrative and selling expenses, the adverse impact was absorbed due to higher income from non-refinery operations and lower financial cahrges.

NATIONAL REFINERY

The company has posted Rs 740 million profit after tax for the first half of year 2002-03 as compared to a profit of Rs 694 million for the corresponding period of last year. The Board of Directors also approved distribution of 25% interim dividend. It had distributed 10% interim dividend for the corresponding period of previous year. Gross sales went up from Rs 16,490.7 million to Rs19,081.8 million. Cost of goods sold also grew from Rs 14,450.7 million to Rs 15,800 million. The rise in profit is attributed to the increase in other income, going up from Rs 106 million to Rs 337 million. The other factors contributing to improved bottom line were reduction in operating expenses and lower provisioning for taxation.

BESTWAY CEMENT

The company has posted Rs 75.8 million profit after tax for the first half of year 2002-03 as compared to a profit of Rs 123 million for the corresponding period of last year. The reduction in profit is attributed to a number of factors that include lower sales, higher cost of goods sold, and provision of Rs 22.9 million against deferred tax. Gross profit came down from Rs 308.8 million to Rs 258.4 million. Due to lower profit EPS also came down from Rs 0.63 to Rs 0.39. Adjustment for deferred tax provision relating to prior periods, amounting to Rs 101 million also reduced accumulated profit carried forward.

 

 

GHARIBWAL CEMENT

The company has posted Rs 122 million loss after tax for the first half of year 2002-03 as compared to a loss of Rs 112 million for the corresponding period of previous year. Like many other players in cement manufacturing sector the company also suffered from reduction in sales and hike in cost of goods sold. Net sales came down from Rs 413 million to Rs 398 million. Cost of goods sold went up from Rs 434 million to 458.6 million. However, better cost controls help in containing the loss. Administrative and selling expenses came down from Rs 32 million to Rs 25 million. Financial charges went down from Rs 64 million to Rs 51 million. The write back of deferred tax provision amounting to Rs 9.3 million helped in bringing down loss after tax.

MILLAT TRACTORS

At the back of higher sales the company has managed to improved its bottom line. The company has posted Rs 65 million profit for the first half of year 2002-03 as compared to a profit of Rs 50.8 million for the corresponding period of previous year. The bottom line also improved due to increase in other income and decrease in financial charges. However, administrative and selling expenses went up.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

37.00

34.85

37.00

211,379,000

P.T.C.L.A

24.15

21.25

24.15

163,102,500

Sui North Gas

24.65

21.90

24.65

84,331,000

FFC JORDAN

11.15

10.30

11.15

51,044,500

Engro Chem

94.70

89.55

94.70

17,840,600

Fauji FertXD

81.50

74.50

81.50

10,904,500

Dewan Salma

14.05

13.05

14.05

10,068,500

I.C.I.

48.00

43.00

48.00

9,669,700

Sui South Ga

16.70

15.35

16.70

3,572,500

Ibrahim Fib.

18.85

17.00

18.85

1,549,000