STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated October 11, 2003

 

The KSE-100 index seems to be making regular gains but investors are still skeptical. The overall consensus was that the index might go as low as 3,500 before taking a U-turn. However, fixing the date and share price for public offer for NBP and announcement of Rs 32 per share for OGDC has the potential to change the market complexion.Lately some major activity has been witnessed in cement scrips at the back of improved capacity utilization and corporate earnings. However, investors must not confine themselves to looking at earnings forecast but give proper attention to cashflow of these companies. Some of these companies may not be able to pay dividend despite posting handsome profit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL BANK OF PAKISTAN

Yet once again, the Privatization Commission has announced to offer shares of NBP through stock exchanges. The PC has offered 13.13 million shares at a price of Rs 46/share. Before jumping on the conclusion whether the current offer is attractive or not one should analyze the economic fundamentals for banking sector in general and NBP in particular. Some analysts believe that despite declining interest rates, NBP is expected to be a major beneficiary of economic revival due to its low cost deposit base, branch network. Keeping the recent performance in view, the only concern is the slight decline in deposits and advances in relation to the overall status of banking sector. For the full year, the bank is expected to post an EPS of around Rs 8 and the fair market value comes to around Rs 56/share. The current offer amounts to Rs 604 million. Keeping the prevailing liquidity in mind, the offer may be over subscribed. However, it may only be attractive for long-term investors.

SAUDI PAK LEASING COMPANY

The company has posted Rs 61 million profit after tax for the year ending June 30, 2003 as compared to a profit of Rs 19 million for last year. The increase in profit can be attributed higher income on investment, lower financial and other charges. The EPS for the year 2003 comes to Rs 2.77 but the Board of Directors approved distribution of 7.5% dividend only amounting to Rs 16.5 million. No dividend was paid to shareholders for the year 2002.

WORLDCALL
The company has posted Rs 215 million profit after tax for the year ending June 30, 2003 as compared to a profit of Rs 170 for the corresponding period of last year. However, the Board of Directors didn't approve distribution of dividend among the shareholders. There was increase in revenue, going up from Rs 1,440 million to Rs 1,794 million. However, the benefit was eroded due to increase in direct costs and operating costs. The real boost in profit for the year was provided by the quantum jump in other income, going up from Rs 68 million to Rs 152 million. There was increase in depreciation and financial charges. Financial charges more than doubled due to issue of TFCs issued with a floor of 12.25%. Diluted EPS for year 2003 comes to Rs 1.35 as against an EPS of Rs 2.27 for the last year.

 

 

LUCKY CEMENT
The company has posted Rs 123 profit after tax for the first quarter of year 2003-04 as compared to a profit of Rs 82 million for the last year. The top line growth by was due to high cement prices during the quarter and improvement in domestic sales. Sales went up from Rs 530 million to Rs 646 million, a growth of 22%. As against cost of sales grew from Rs 417 million to Rs 424 registering a growth of 2%. The boost in sales was also provided by the increase in cement export touching 14,305 tonnes during the quarter as compared to a quantum of 7,020 tonnes or the corresponding quarter of last year. It is interesting to note that financial charges of Lucky Cement are very nominal as compared to other players. The earning of company are expected to remain robust due to higher offtake of cement and prices remaining stable.

JAVEDAN CEMENT
The state-owned enterprise seems to be plunging deeper into problems arising due to higher cost of production. The company has posted Rs 34 million gross loss for the year ending June 30, 2003 as compared to a profit of Rs 48 million for last year. Sales came down from Rs 733 million to Rs 534 million. However, sales were not enough to take care of cost of goods sold amounting to Rs. 567 million. As a result of Rs 41 million loss after tax for the year under review, accumulated losses of company touched Rs 510 million level. Once upon a time this was an efficient unit. However, due to inadequate repair and maintenance and BMR, the unit faces sever depletion problem. Despite being located in Karachi, the hub of industrial and commercial activities, the unit has been adding to its accumulated losses. Since the GoP may not be keen in investing any more money in the units, it will be prudent that it should be privatized immediately. It has the potential to attract very good bids due to its prime location and other frills attached.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

D.G.K.Cement

44.65

42.45

43.20

197,779,000

P.T.C.L.A

38.30

37.45

37.85

121,255,500

Hub Power

37.00

36.10

37.00

93,564,500

Lucky Cement

24.65

22.25

22.25

59,830,500

M.C.B.

52.35

49.55

51.80

45,592,000

National Bank

48.75

47.15

47.15

42,138,000

FFC JORDAN

17.50

16.90

16.90

40,293,000

Bosicor Pak

30.30

26.95

26.95

19,006,000

Engro Chem

84.25

80.65

81.00

7,843,200

Fauji FertXD

94.50

92.00

92.00

3,072,100