STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Aug 30, 2003

 

The KSE-100 index continued its upward movement, but not without surges. The index managed to cross 4,500 level but profit taking remained common. As full/half yearly results started appearing blue chip stocks speculators became active. The practice seems to substantial increase in prices prior to announcement of results and significant fall after release of financial results, the worst example being PSO. The market manipulators also seem to be in full action. However, the picks change on weekly/fortnightly basis.

 

 

 

As last month of first quarter of current financial year started all eyes are set at announcement of dates for the public offer of shares of NBP, SSGC, PIA and OGDC. Two of the forthcoming new listings, PICT and National Bank Modaraba are expected to be over subscribed because of the over flowing liquidity in the market.

PICIC

Pakistan Industrial Credit and Investment Corporation (PICIC) seems to have fully recovered from its bad patch and on the fast track to become 'truly a financial super markets'. The improvement in financial health comes from increase in income and cost optimization. PICIC has posted Rs 609 million profit after tax for the year ending June 30, 2003 as compared to a profit of Rs 451 million for the corresponding period of last year. Cumulative income increased from Rs 1,756 million to Rs 1,868 million. Better cost controls helped in bringing down total expenses down from Rs 1,375 million to Rs 1,257 million. EPS improved from Rs 4.49 for the previous year to Rs 6.07 for the period under review. PICIC has already paid 12,5% interim dividend and the Board of Directors also approved issue of 15% bonus shares. PICIC also announced the results of ICP mutual funds now under its management. The Board approved dividend payout on the 14 funds ranging from 10% to 40% and issue of 15% bonus shares for all the funds except 24th ICP and SEMF funds.

HINOPAK MOTORS

The producer of most preferred truck and bus chassis appears to be completely out of red, rather indicating a complete turnaround. As at June 30, 2003 it carried forward profit of Rs 154 million, whereas it had accumulated loss of Rs 279 million a year ago. The company has posted Rs 235 million profit before tax for first half of 2003 as compared to a profit of Rs 185 million for the corresponding period of last year. The increase in profit can be attributed to higher sales, better cost controls, increase in other income and decrease in financial charges. Sales improved from Rs 1,496 million to Rs 1,659 million. Despite increase in sales, administration and selling were contained at the level of previous half.

PACKAGES

The growing demand of FMCGs seems to have positive impact on the company. Local sales for the first six months of 2003 were Rs 3,109 million as compared to sales of Rs 2,685 million for the corresponding period of last year. However, the increase in cost of goods sold, going up from Rs 1,811 million to Rs 2,080 million, eroded profit margin. The profit after tax came down from Rs 364 million to Rs 346 million. The reduction in profit can be attributed to higher provision for tax and increase in operating expenses. A point to be noted is that earning per share (EPS) came to Rs 7.28 but the Board of Directors did not approve distribution of interim dividend and sharing the benefit with the shareholders.

AL-GHAZI TRACTORS

The company has registered more than threefold increase in profit after tax for the first half of 2003 but the Board of Directors did not approve distribution of interim dividend. The company had paid Rs 2.5 per share interim dividend at the time of announcement of half yearly results. Sales increased from Rs 1,747 million to Rs 2,560 million. As against this cost of goods sold went up from Rs 1,572 million to Rs 1,868 million. There was marginal increase in operating expenses, financial and other charges registered increase and other income came down. It is worth noting that the financial charges incurred by the company are exceptionally low. This gives an impression that the company enjoys strong cash flow and least dependent on bank borrowing. The skipping of interim dividend payment is a bitter pill to swallow.

AL-ABID SILK MILLS

The company has posted Rs 55 million profit after tax for the year ending June 30, 2003 as compared to a profit of Rs 132 million for the corresponding period of last year. Sales came down from Rs 3,306 million to Rs 3,125 million. However, better cost controls helped in improving gross margin from 17.36% for year 2002 to 17.78% for the period under review. As a result of decline in profit the Board of Directors approved distribution of 10% dividend only. The company had paid 50% dividend for the year 2002 and also issued 25% right shares. Despite the increase in paid up capital, the company remains small capital base, having less than Rs 100 million paid-up capital. A close look at the trading of its shares reveals that only 38,600 shares exchanged hands during Jan-Jul seven months.

 

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

P.T.C.L.A

38.60

36.90

38.60

586,428,500

Hub Power

44.95

44.00

44.00

521,851,500

FFC JORDAN

18.80

17.90

17.95

128,893,000

Sui North Gas

46.90

45.35

45.40

104,685,000

National Bank

40.75

38.95

40.75

92,882,000

D.G.K.Cement

41.40

37.30

41.10

88,272,500

Nishat Mills

43.05

37.30

41.40

83,789,000

Lucky Cement

23.90

21.00

23.90

66,536,500

Sui South Gas

35.90

34.50

34.50

34,067,000

M.C.B.

52.95

50.50

52.95

31,436,000