STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated November  01, 2003

 

It has been reiterated time and again that one of the reasons for high volatility of the equities market in Pakistan is carry over trade (COT). Since the financier of COT are those who have significant share in daily trading volume they often try to move the market in the direction they desire. Lately, the KSE has announced the revised list of 30 companies for which COT facility would be available.According to some equities analysts some of the companies included in the list are the favorites of those who have often been alleged for manipulation.

 

 

 

If one looks at the price movement of some of the scrips since June, it is evident that at least half a dozen are those where the manipulative activity was most visible. It is also worth noting that the new list would become effective from December 15, 2003, providing the market manipulators ample time to accomplish their mission.

The KSE-100 index has been going down due to persistent selling pressure without any change in economic fundamentals for the listed companies. It has lost over 825 points since mid September. According to some market analysts the downward trend is expected to continue during the month of Ramazan and/or till mid December.

Two of the fertilizer companies have released their quarterly accounts. Total industry sales during the nine months period was up by 5% to 3.3 million tonnes. Despite increase in feedstock price the companies were not allowed by the government to increase urea sale price. The higher plant efficiency has helped the manufacturers to contain cost of urea production. Prices of locally produced urea is still 30% lower than the price of imported one. While there is increase in urea offtake, the point of concern is declining trend in the offtake of other types of fertilizers, particularly DAP. This decline can be attributed to higher sale price, mainly due to 15% GST on imported DAP.

ENGRO CHEMICAL PAKISTAN

The company's profit for July-Sep quarter of year 2003 was Rs 362 million as compared to a profit of Rs 440 million for the corresponding quarter of last year. Lower sales and higher feedstock price contributed to the decline in profit. However, higher dividend income helped in erosion of bottom line. For the nine-month period profit at Rs 896 million was higher by 5% at Rs 854 million for the corresponding period of last year. The Board of Directors approved second interim dividend of Rs 2 per share. The total dividend paid so far, including the first interim of Rs 2.50, came to Rs 4.50.

FAUJI FERTILIZER COMPANY

The company has posted Rs 779 million profit after tax for July-Sep quarter of year 2003 as compared to a profit of Rs 770 million for the corresponding quarter of last year. However, Fauji's nine-month profit after tax for year 2003 at Rs 1,946 million is 14% lower as compared to Rs 2,261 million for the corresponding period of last year. The top line rose by 16% to Rs 4,730 million. Whereas the rise in feedstock and fuel cost coupled with phasing out of subsidy on unit-II, pushed the gross margins down to 36%. Consequently, operating margins also plunged to 28%. In contrast, company's financial charges declined substantially from Rs 268 million in third quarter of year 2002 to Rs 98 million for the period under review that helped in improving the bottom line. Fauji's EPS for the quarter stands at Rs 3.04 against Rs 3.01 for the corresponding quarter of year 2002.

 

 

NATIONAL BANK OF PAKISTAN

Profit after tax of the bank for the first nine months of year 2003 has registered 98% growth as compared to the profit for the corresponding period of last year. The improvement in profit of the bank can be attributed to 25% increase in revenue, going up from Rs 11,361 million to Rs 14,155 million. As against this administrative expenses grew by 14%, from Rs 5,711 million to Rs 6,502 million. The cumulative impact of these was a 45% growth in profit before tax. The reduction in corporate tax rate further helped in improving the bottom line.

PAKISTAN STATE OIL COMPANY

PSO announced its first quarter results, posting Rs 1,002 million profit after tax. The decline in core earnings of the company is clearly evident from the decline in gross profit by 19%. The primary reason of the decline in earnings has been the low sale of furnace oil, one of the high volume products of the company. However, an unexpected surge in other income of the company has prevented the decline in bottom line. The surge in other income may be due to some one-off events. Sales declined by almost 14%, which was in line with the forecast of analysts. POL prices remained stable and apart from motor gasoline and HOBC, the average prices for all other products during the quarter were higher as compared to corresponding quarter of last year.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

P.T.C.L.A

34.25

33.20

33.55

135,068,000

P.S.O.

260.50

235.95

250.45

120,468,500

Hub Power

34.80

33.70

34.30

72,047,000

FFC JORDAN

17.00

16.40

16.50

67,757,000

National Bank

45.95

43.00

43.00

22,623,500

Fauji Cement

9.40

8.20

8.25

19,362,500

Pak.PTA Ltd.

11.65

10.70

10.80

16,559,500

Bosicor Pak

16.60

13.40

13.40

13,059,500

M.C.B.

46.10

41.90

41.90

9,259,500

Chakwal Cement

4.40

3.75

3.85

4,165,000