STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated April 05, 2003

 

The equities market in Pakistan followed the behaviour of other markets. The average daily trading remained low. However, the KSE-100 index gained 34 points at the back of selected of buying in selected scrips. Buying interest was mainly in HUBCO, PSO, and other volume leaders. Market anxiously awaits financial results on National Bank of Pakistan (NBP). Price of Engro Chemical Pakistan remained a little volatile. PSF manufacturers reduced prices of man-made fibre, in line with the declining trend in crude oil prices. Many analysts forecast sustained movement of the index in coming weeks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This week Privatization Commission announced the revised board policy guidelines that included listing and sale of shares of some state-owned enterprises through stock exchanges. The experience of sale of shares of NBP through stock exchanges and prevailing liquidity has encouraged the Commission to mobilize funds from sale of shares of state enterprises without sale of strategic holding along with transfer of management.

T-Bill yields have plummeted to historic lows. In the latest auction the cut-off yield on the six-month T-Bill declined by 38bps to 1.71% from 2,09% per annum. During the current financial year, yields have come down from 6% in July 2002 to 1.71%. Obviously the banking sector will be the most effected by the declining trend as spreads are expected to be extremely squeezed.

ENGRO CHEMICAL PAKISTAN

Two news items regarding the company must be of importance for the shareholders of the company. First, the announcement of the names of the candidates filing nominations for the forthcoming election of Board of Directors. Second, about a likely resolution with the Dawood Group. To explore the possible outcome of election, a closer look at the pattern of shareholding is very important. While slightly more than 22% shares are held by Engro's Management and Employee Trust, nearly 52% shares are held by financial institutions and general public. In the past, a large portion of these shares was held by the IFC, which backed Engro's management. However, after IFC divested its investment a large block of shares went to others. Therefore, proxies from them are likely to play a vital role in the election of directors. What will happen in next few days is still anybody's guess. However, some analysts believe that indication of an amicable resolution will be a win-win situation for both, Engro's management and Dawood Group.

PAKISTAN GUM & CHEMICALS

The company has posted Rs 23 million profit after tax for the year ending December 31, 2002 and also announced payment of 30% dividend among the shareholders. The company had posted Rs 19 million profit after tax for the previous year and also paid 30% dividend. The EPS improved from Rs 6.55 for the year 2001 to Rs 7.92 for the year 2002. The company managed to improve its bottom line for the year 2002 due to improved gross profit and lower financial and other charges. However, other income came down substantially. Sales went up from Rs 351.6 million to Rs 362.5 million. Gross profit improved from Rs 66.8 million to Rs 72.3 million. Financial and other charges came down from Rs 8.3 million to Rs 6.7 million. Other income went down from Rs 2.7 million to Rs 0.96 million

 

 

CENTRAL INSURANCE COMPANY

The company has posted Rs 104.8 million profit after tax for the year ending December 31, 2002 and also announced payment of 30% final dividend. It had already paid 50% interim dividend, making the total payout at 80%. The Board of Directors also recommended issue of 20% bonus shares. The company has posted Rs 76.9 million profit for the previous year and also distributed 100% dividend among the shareholders. The higher dividend for the previous year was mainly due to prior year adjustment of tax amounting to Rs 65 million.

HIGHNOON LABORATORIES

The company has posted Rs 32 million profit after tax for the year ending December 31, 2002 as compared to a profit of Rs 21 million for the previous year. The Board of Directors approved distribution of 15% dividend among the shareholders and issue of 10% bonus shares. Sales went up from Rs 678.4 million to Rs 776.5 million. Gross profit improved from Rs 238 million to Rs 298.8 million. However, the advantage was eroded due to increase in selling and promotional expenses going up from Rs 87.4 million to Rs 137.3 million. The reduction in financial and other charges, coming down from Rs 55.4 million to Rs 47.3 million, helped in improving the bottom line.

SERVICE INDUSTRIES

The company has exposure to three industries that are likely to recording above average growth; i.e. shoes, tires and rubber-based technical items for defence industry. The company is expected to benefit from improved economic prospects. While appreciation of rupee may help the company in containing cost, the geopolitical conditions in the region may have an adverse impact on exports of the company.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

35.80

34.10

35.55

248,832,500

P.T.C.L.A

24.75

24.00

24.45

177,307,000

P.S.O.

208.50

202.90

208.50

76,297,100

Engro Chem

83.10

78.30

80.20

19,739,900

I.C.I.

51.65

49.20

51.65

13,802,900

Adamjee Ins

48.00

45.00

48.00

9,810,000

Fauji Fert

82.05

81.35

81.55

6,914,800

Dewan Salman

14.25

14.00

14.20

2,883,000

Ibrahim Fib.

20.25

19.95

19.95

2,252,500

Shell Pak

385.75

381.60

385.00

2,196,600