STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated May 03, 2003

 

During the week the market remained direction less and investors preferred to remain on sidelines. There was a brief buy spell due to announcement of quarterly results by the volume leaders that was short-lived. However, some speculative activity was witnessed in certain scrips. The market is expected to stay range bound due to negative developments regarding delays in release of funds from the IMF and the World Bank. 

 

 

 

Some analysts hope that PSO still has the potential to keep the market vibrant. Others believe that due to the delay in privatization of PSO the market may enter into short bearish spell. This may also affect the second tier stocks as well as PSO. Many analysts remain bullish about long-term outlook of the market but term the short-term outlook negative. Some analysts fear that the KSE-100 index may plunge below 2,700 level in the following weeks.

HUBCO

The company has posted Rs 1,622.5 million net profit for January-March quarter of year 2003 as compared Rs 1,821.2 million profit for the corresponding period of previous year. During the quarter, the power plant was run at a load factor of 39% generating 999 GWh electricity. This was due to the country having better monsoon and winter rainfalls this year compared to last year that has resulted in improved electricity generation by WAPDA from its hydel projects. Turnover for the quarter was Rs 5,737 million and operating costs were Rs 3,526 million. Operating profit for nine months came down from Rs 7,168 million to Rs 6,488 million. However, net profit improved due to reduction in financial charges, coming down from Rs 2,471.3 million to Rs 1,985.8 million. Net profit for nine months of current year was Rs 4,502.2 million as compared to a profit of Rs 4,696.7 million for the corresponding period of last year. EPS also came down from Rs 4.08 to Rs 3.89.

PAKISTAN STATE OIL COMPANY

The company has released its third quarter results posting Rs 1,195 million profit after tax and also announced 30% interim dividend. The market took that very positively. With almost 20% increase in prices of POL products during Jan-Mar 2003, some analysts expected a jump in profit for the quarter. According to Murad Ansari of KASB the entire extent of inventory gains are not reflective in the current earnings of the company. It is believed that the management may have opted to smooth out earnings over the second half of its financial year as the POL prices dropped sharply in April. The management may have chosen to avoid showing fabulous profit for the third quarter and a nosedive in profitability in fourth quarter. Other income, the factor that boosted company's profitability in the past, is normalizing, other income was as low as Rs 96 million for the nine-months period of current financial year as against as high as Rs 1,475 million for the corresponding period of previous year.

FAUJI FERTILIZER COMPANY

The company has reported a 20% decline in its profit after tax for first quarter of year 2003m in line with the expectations of some analysts. However, the company announced 30% interim dividend. According to Nayantara Noorani of AKD securities, "This decline was due to 1) suppressed revenue growth for the quarter, 2) decline in gross margins, 3) higher financial obligations and lower other income". A 45.6% growth in revenue was mainly due to higher sale of urea after acquisition of PSFL and partly due to a 4% increase in average urea prices. Urea sale is expected to remain low in the second quarter and profit margins of manufacturers under pressure if the GoP implements its decision of reducing urea price without offering corresponding reduction in costs.

PAKISTAN TELECOMMUNICATION COMPANY

The company has posted 18% increase in profit after tax for the first nine months of current financial year, in spite of slow revenue growth. The bottom line growth flowed from lower financial charges and improved operating margins. The single most important factor that contributed to an 18% increase in profit after tax was the decline in financial charges. The other factor is higher operating margins. Improved core profitability is a positive sign showing that the company has begun to tap its potential efficiency gains. The company's revenue growth at 3% mainly came from its fixed lines contrary to the general perception that future growth in revenue would be driven by cellular subsidiary.

SIGMA LEASING CORPORATION

The leasing company has registered a slight decline in profit after tax for Jan-Mar quarter of year 2003 as compared to the profit for the corresponding period of previous year. However, profit for nine months period went up from Rs 17.365 million to Rs 20.325 million. Total income went up from Rs 50.978 million to Rs 53.013 million. Total expenses came down from Rs 32.826 million to Rs 31.689 million. It is worth noting that the management succeeded in curtailing financial charges, a decline from Rs 26.2 million to 18.4 million. However, administrative and operating expenses hiked from Rs 7.6 million to nearly Rs 13 million.

 

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

34.90

34.20

34.35

141,279,000

P.T.C.L.A

24.95

24.35

24.40

130,651,500

Sui Northern Gas

28.00

26.30

26.45

109,745,000

Pak. PTA Ltd.

9.20

8.75

8.85

48,608,000

P.l.A.C.(A)

11.35

10.85

10.85

41,152,000

D.G. Khan

15.00

14.00

14.00

28,657,500

M.C.B.

33.85

32.35

32.35

18,097,000

I.C.I. XD

51.15

49.95

50.40

7,482,500

Nishat MillsXB

22.55

20.25

20.25

5,773,000

Sui Southern Gas

17.50

17.40

17.40

4,248,000