THE KASB REVIEW

STOCK MARKET AT A GLANCE

 

 

By SHABBIR H. KAZMI
Updated Aug 30, 2003

 

The week started off on a dull note as the KSE-100 index remained in the negative zone for two consecutive days. Rumors over privatization of PSO, and profit booking by institutional investors were the major triggers creating pressure on the stock price. The market recovery later in the week was led by Pakistan Oilfields. The company announced that the board meeting for approval of FY03 accounts would be held on Sept 15, 2003. The market responded positively to this much-awaited news and the index surged by 3.28% as speculation over possible stock dividend issue reached new heights.Overall market activity remain subdued as the average daily trade volumes declined by almost 16% WoW to 518mn shares.

 

 

 

OUTLOOK FOR THE FOLLOWING WEEK

The next few weeks are likely to be very exciting as market heavyweights would be announcing their results. First up would be Hubco, which is scheduled to announce its results on Sept. 4, although we are of the opinion that the results would come in on Sept. 5, due to timing differences as the board meeting is being in London. We expect speculation over the final dividend payout to gain momentum from the beginning of the coming week. Pakistan Oilfields is likely to remain the key excitement as the company is also expected to announce its result on Sept. 15. Speculation over possible stock dividend announcement is likely to be the key feature in this stock for the next couple of weeks. Last but not the least, the telecom giant, PTCL is also scheduled to announce its results on Sept 24. All in all, the market is expected to remain buoyant throughout the coming week on the back of results announcement. In addition to the heavyweights, majority of companies are also likely to announce their FY03 results in September, which is likely to keep investor interest high.

FUNDAMENTAL CHANGES

THE MAJOR DEVELOPMENTS THIS WEEK WERE:

•Following the footprints of National Bank of Pakistan and MCB, Habib Bank Limited (HBL) has also announced its housing finance scheme. The basic features of the scheme are very much in line with the government's budgetary proposals. The entry of an aggressive player like HBL is likely to expand the market size of the housing finance.

•Pakistani government has asked Standards & Poors to improve the country's credit rating. Reportedly the said decision has been taken in the light of government's plans to launch a US$250-500mn Pakistan sovereign bond.

•After days of teaser advertising and rumors, the new Honda City was launched in Pakistan on Saturday. The Chairman of Honda Atlas, Mr. Yusuf Shirazi, chose the occasion to also announce that the company had expanded its production capacity to over 12,000 units per annum.

•Car Sales during the month of Jul-03 declined by 21% MoM. However, this is quite a normal occurrence. July tends to be a month in which new car sales drop significantly. However, the thing to note this July is that even though month on month sales have dropped, sales for the month have actually increased by 56% when compared to last July.

•Two major plans have been discussed with President Musharraf in his recent visit to Karachi 1) Karachi uplift plan of PkR29bn and 2) Kalabagh Dam and Thal Canal. The president approved 4-year Karachi uplift plan, which was presented by Nazim Karachi. Apart from this, President Musharraf has also formed two bodies i.e., technical and Parliamentarian, for construction of Kalabagh Dam and Thal Canal.

 

 

PAKISTAN UPDATE — 30 AUGUST 2003

•A total of 24 applications have been received by Private Power Infrastructure Board (PPIB) for setting up two power projects in Karachi. Hub Power Company Ltd. is among the notable bidders. The other two notable bidders for the power projects are Fauji Foundation and Engro Chemical Pakistan Ltd. According to PPIB, one of the power projects is to be based near Hawksbay Coastal area while the other project site is expected to be near Gadani beach in Balochistan.

•A new digital TV transmission system has been launched with a brand name of SUN TV which will broadcast 50 channels through digital wireless system. Southern Network (SN), which was formally known as SPTV is now commencing its operations under the new management. The company is also planning to offer broadband Mobile Internet Service just after launching SUN TV. Southern Electric Power Company is the major sponsor of this company.

•In a recent interview, the ADB's local chief has come up with some interesting comments on the country's economy. He has shown his confidence on country achieving a 5.3% GDP growth target for the current FY. However, he has also highlighted the weaker aspects of the economy, which include: (I) relatively lower investments vis-a-vis economic growth, (II) poor quality of spending in the public sector and (III) higher degree of defense spending.

•Cement manufacturers agreed to reduce cement prices with increasing capacity utilization rate, while keeping these within the range of PkR225-200/bag.

•Bidding was held for divestment of government stake in Thatta Cement and A.C. Rohri Cement. While the government accepted the highest bid of PkR255mn for Rohri Cement, the government rejected all bids for Thatta Cement as they were below the government's reference price.

•The rising hopes of further peace talks between India and Pakistan are likely to see a significant damage from two developments: (I) Pakistan's stiff stance over guarantees from India for not imposing a unilateral flight suspension in future, and (II) Advani's anti-peace statements after the Mumbai blasts.

•The Privatization Minister in a recently held interview said that the announcement of the bidding date for PSO is being withheld on request of Kuwait Petroleum Corporation (KPC). The Kuwait-based oil giant is reportedly in the process of getting an approval from the newly-elected Kuwaiti Parliament to participate in PSO's privatization process.

•PIA has announced that it will be replacing its fleet of A300s with A310s. The new planes will be acquired through dry lease and sources within PIA are indicating that PIA is targeting to acquire old planes this time.

MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

16.87

17.09

1.30

Avg. Dly T/O (mn. shares)

613.34

517.80

-15.58

Avg. Dly T/O (US$ mn.)

565.47

529.09

-6.43

No. of Trading Sessions

5

5

 

KSE 100 Index

4418.21

4461.47

0.98

KSE ALL Share Index

2806.10

2842.46

1.30

 

 

Source: KSE, MSCI, KASB