STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated July 12, 2003

 

The KSE-100 index gained about 50 points during the week and closed at 3,646 level. Robust activity was seen across the board but volume leaders remained in demand. One analysts termed this week 'exceptional' on the basis of all the parameters. The carnage at Quetta and bomb blast in Karachi did not deter focus of investors. Major activity was seen in bank, and fertilizer sectors and oil marketing companies. Cement sector seems to have lost the focus of investors. Outlook for PSF sector looks uncertain, at least, for the time being due to hike in crude oil prices.

 

 

 

 

The keen interest in banks was at the back of Rs 1.75 dividend declaration by NIT. However, some sector experts say that the beneficiary of this declaration were not all the banks, only those having substantial holding of NIT units. The point of real concern is that banks are sitting on tonnes of money but cannot utilize the funds. Some of them did try to extend credit for the purchase of NSS products. Though, the central bank consider such lending bad, it did not make any effort to revert the transaction.

The interest in fertilizer sector was mainly due to expected higher offtake of urea in the coming months. It was also due to the fact that while it was expected that urea manufacturers would reduce the price, they succeeded in increasing the price. The price increase was mainly due to the increase in feedstock price effectively July 01, 2003.

After the announcement of budget, keen interest in cement sector was witnessed. However, the bubble seems to have burst. It is mainly due to commencement of commercial production on second line of Fauji Cement and another new entrant getting ready to commence production. This will effectively reduce the quota of all the existing players, in turn, affect their profit margin.

ICP-SEMF

Pakistan Industrial Credit and Investment Corporation (PICIC) has recently acquired management rights of the Fund, having a substantial holding of PSO shares. The new management has submitted a 5-year financial plan as per requirement of the Right Issue plan. According to a report, "The Right Issue has its strings attached to the impending privatization of PSO. The Fund is expecting substantial liquidity with itself post PSO privatization and is therefore working to build up its portfolio before stock prices race upward. We are of the opinion that substantial portion of this Right Issue will be utilized to accumulate PSO as the Fund is committed to sell its existing PSO stake to the government." However, an analysts said, "One fails to understand the logic behind the GoP acquiring the Fund's investment in PSO and then sell it. The appropriate approach is that the GoP sells its stake in PSO and let ICP-SEMF management company decide about the fate of its stake in PSO."

PAKISTAN TELECOMMUNICATION COMPANY

Nayantara Noorani of AKD Securities believes that PTCL share has a potential to touch Rs 38 level. While the demand growth for global telecommunication companies in developed countries is slowing down, it is not true for PTCL. It is the only full service and listed telecommunication company in Pakistan, also having a subsidiary in the business of cellular category. The market is currently over-discounting the risk from deregulation of telecommunication sector in Pakistan. The scrip is selling at a discount at present, despite offering the highest yield in the region. Recently, PTCL has joined in the KSE-100's rally after the GoP announced that it does not intend to divest part of its shareholding in the company through the secondary market.

SUI NORTHERN GAS PIPELINE COMPANY

Rousch Power is the first IPP to convert to gas and SNGPL will supply 85mmcfd to it. The IPPs has constantly been incurring losses. The conversion to gas is likely to reduce the cost of fuel and consequently the tariff. However, a question arises, does SNGPL has the capacity to meet the requirement during winter season? Experts express concerns about the economic viability of creating the supply infrastructure and natural gas storage facility at the power generation plant.

TELECARD

The company continues to rule the roost as far as wireless local loop (WLL) is concerned, at least for the time being. The company had issued a second round of right shares to raise Rs 0.5 billion for the expansion of its WLL network. With Rs 0.3 billion additional funds raised through debt and Rs 0.2 billion internally generated, the company plans to set up 125,000 wireless payphones in the first phase at a total cost of one billion rupee. It is estimated that the company has sold over 8,000 wireless payphones since the launch. The success level of wireless telephony can be gauged from the fact that the company had sold around 11,000 wireline phones since it commenced operations in 1985.

 

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Hub Power

38.25

37.90

38.20

204,245,500

P.T.C.L.A

29.10

28.45

29.05

146,248,000

National Bank

30.80

27.30

30.05

91,290,000

FFC JORDAN

14.00

13.45

13.75

83,752,500

P.S.O. XD

234.70

228.35

233.25

82,111,100

M.C.B. XD

40.95

37.55

39.85

35,723,500

Pak. PTA Ltd.

9.15

9.10

9.10

5,723,000

Shell Pak

441.50

422.00

431.00

3,729,200

Askari Bank

30.20

28.40

29.80

1,598,000

Union Bank

16.70

15.30

16.70

727,000