STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Sept 13, 2003

 

The KSE-100 index continued its upward movement due to positive sentiments. Announcement of good results by some of the volume leaders kept investors' interest high. Investors are least concerned about the ongoing confrontation about LFO. They are sure that the elected government will not dislodged. With the increase in COT volume and investment Badla rates also went up. There are two opinions about the possible index movement in the following weeks. While some analysts strongly believe that the index will continue its upward movement, others are definite about technical correction which has become overdue.

 

 

 

MUSLIM COMMERCIAL BANK
MCB in post-privatization and particularly over the last few years has built-up a substantial franchise value. This has been done through heavy investment in technology. A key part of the franchise is the MNET switch, which boasts almost 200 ATMs and is the platform on which MCB has launched its 'SmartCard' nationwide. The rival 1-Link switch is perceived to be less sophisticated and has lower penetration. It is understood that the central bank is putting pressure on MCB to link-up its MNET with the rival 1-Link network, which may put the bank at obvious disadvantage.

INDUS MOTOR COMPANY
The company has announced its financial results for the year ending June 30, 2003. The Board of Directors also approved payment of 50% final dividend, making the full year payout at 70%. Sales of the company grew by 93%, providing an increase of 245% to operating profit. The company has posted Rs 1.3 billion profit after tax for the year 2003, a growth of 249% over last year. The colossal increase in profit after tax can be attributed to higher sales. Stable exchange rate further improved the bottom line. Corolla is the flagship brand of the company and the driving force behind increase in sales. The escalation in other income, (by nearly 300%) mainly comprise of return on bank deposits and other short-term investments. While the automobile sales may not grow at high rate in the longer term, the two leading brands of the company are not expected to witness any substantial decline. Another growing concern is emerging fierce competition from other brands, which also may not have any significant impact on the sales of the company.

PAKISTAN TELECOMMUNICATION COMPANY
It has become more or less evident that privatization of this telecom giant would be delayed for couple of years. There is a talk of spinning-of by unbundling the organization into smaller business entities. The immediate response may be that the GoP will not opt this strategy. However, if such a policy is implemented, there would also be a loss of synergy for PTCL. The biggest threat is, if the GoP goes or unbundling of the company, its privatization may not be possible at all. It is believed that many eyes are set at the cellular subsidiary of PTCL and some of the interested parties are suggesting its unbundling from the parent company. An interesting situation has arisen whereby the various ministries are suggesting different plans for privatization of PTCL, which may suit some and may not be liked by others at all.

PAKISTAN PTA
The company has posted Rs 900 million loss after tax for the first half of year 2003, as against a loss of Rs 1,458 million for the corresponding period of last year, showing an improvement of 38%. Net sales grew by 21% and stood at Rs 7,941 million. Gross margin improved by 39%. Lower administrative and selling expenses, significant rise in other income, and a nearly 60% decline in financial and other charges resulted in a better financial position. After a strong first quarter at the back of sky rocketing prices of PTA in Asia, prices normalized in the later months. This resulted in a decline in total turnover of the company in the second quarter by 25% to stand at Rs 4,233 million. Relatively lower sales volume was also due to the slowdown in PTA demand during the period, contributing to the decline in turnover in value terms.

 

 

TELECARD
TeleCard plans to expand its wireless operations aggressively and bring 90% Pakistan under its infrastructure. TeleCard rolled out, 12,800 WLL payphones in year 2003 and about 75% of the rollout was concentrated in Karachi. This brought the total WLL payphones in operations to 13,000. Meanwhile wireline payphones stand more or less stagnant at 11,000 as a result of the company's decision to shift its rollout focus completely towards wireless. The company plans to complete the first phase of its WLL payphone installation, which comprises setting up 125,000 lines during 2004. This target seems rather ambitious can only be achieved by slashing set price substantially. It is understood that the prices have already come down from Rs 25,000 to around Rs 10,000 per set. TeleCard like other telecom operators is eyeing the deregulation policy. Its decision to aggressively expand its subscriber base is a clear indication of its interest in local loop license.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

P.T.C.L.A

40.20

38.50

39.70

425,772,000

Hub Power

43.90

42.85

43.30

283,118,000

National Bank

49.05

42.50

48.00

136,924,500

D.G.K.Cement

47.10

45.90

46.10

80,259,000

FFC JORDAN

18.75

18.25

18.75

58,516,500

Sui North Gas

46.00

44.80

46.00

58,262,500

M.C.B.

58.75

57.20

57.50

31,017,000

Engro ChemSPOT

96.55

93.85

96.55

15,575,500

Fauji Fert

104.00

101.50

104.00

12,923,300

Sui South Gas

33.00

32.50

32.65

8,355,000