STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated November  15, 2003

 

The controversy over prudential regulations, regarding investment of banks in the shares of listed companies, seems to have further intensified after a report appearing in local media. The immediate feedback of the market is that the brokers should have abstained from making the outcome of meeting public and let the central bank issue the amendments. This controversy once again plunged the market into bearish spell. However, the index managed to close higher as compared to last week.

 

 

 

 A question arises, will there be massive selling from the financial institutions? The overwhelming impression is that contrary to the general perception, financial institutions will not resort to immediate selling. However, market manipulators are blowing the issue out of proportion. The real threat is not the new prudential regulations but the blatant misuse of Badla System. Besides, both the banks and brokers are resisting implementation of margin financing.

OGDC

The public subscription was open for four days. The initial but unconfirmed reports are that the scrip will be over subscribed, by two/three times of the size offer. While the response of retail investors was low in case of NBP, it seems to be the other way round in case of OGDC. Price of scrip in kerb market touched as high as Rs 40 against the offer price of Rs 32 per share.

PAKISTAN TELECOM COMPANY

The management of the company made a presentation at Karachi Stock Exchange to explain the impact of reduction in tariff on company's earning. It was stated that the tariff has been slashed to expand its customer base as well as boost tele-density in the rural areas. The two objectives could be achieved through ensuring afford ability of telephony for different income groups. The reduction in tariff will help increasing the number of subscribers and retaining the existing subscribers. The measures would help in the company in consolidating its position as the market leader and also increase its revenue. The previous reductions have helped the company in improving its earnings.

AL MEEZAN MUTUAL FUND

The vibrant equities market has helped the fund in improving its income, mainly due to capital gains. The fund has posted Rs 67.3 million profit for the quarter ending September 30, 2003 as compared to profit of Rs 21.7 million for the corresponding quarter of year 2002. Capital gains increased by four-fold, from Rs 15 million to Rs 60 million. However, dividend income declined from Rs 11 million to Rs 10 million. Interestingly operating expenses went up from Rs 1.7 million to Rs nearly Rs 6 million. The main culprit seems to be administrative expenses, going up from Rs 0.204 million to Rs 3.073 million. Remuneration to the investment advisor also went up from Rs 1.6 million to Rs 2.9 million.

TELECARD

The company has posted Rs 48.8 million profit after tax for the quarter ending September 30, 2003 as compared to a profit of Rs 37.9 for the corresponding quarter of year 2002. However, closer look at the accounts indicate that the increase in profit after tax was only due to lower provision for tax, only Rs 3 million for the quarter under review as compared to Rs 16 million for the corresponding quarter of last year. There was increase in sales but the hike in cost of sales eroded the benefit. Another factor affecting profit was increase in administrative and selling expenses. However, reduction in financial charges contained erosion of bottom line. As a result EPS came down from Rs 0.754 to Rs 0.468.

S. G. FIBRE

Earnings of the company seems to be under pressure. However, the efforts of management to minimize losses seems to be yielding results. The company has posted Rs 0.93 million operating profit for the quarter ending September 30, 2003 as against an operating loss of Rs 2.4 million for the corresponding quarter of year 2002. Sales for the quarter under review were marginally higher but the benefit was eroded due to higher cost of sales. Sales went up from Rs 266 million to Rs 280 million. Cost of sales escalated from Rs 242 million to Rs 248 million. EPS came down from Rs 0.71 to Rs 0.49.

RECKITT BENCKISER

The company has declared financial results for July-Sep quarter of year 2003 registering 26% growth in sales. Net sales of household products stood at Rs 1,105 million, 15% higher than sales of same period last year. This was due to volume growth in certain categories as well as new products launches. The decline in gross margin is attributable to one time redundancy charges relating to the Korangi factory. The division has incurred an operating loss of Rs 101 million as compared to a profit of Rs.49.4 million in the corresponding period last year. Net sales of the pharmaceuticals were Rs 997.5 million versus Rs 858.4 million. Gross margin too was better due to higher top line growth, cost reduction and restructuring measures carried out in prior years. Operating profit at Rs 184.3 million was improvement of 76% over the same period last year.

 

 

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

Oil & Gas Deve.

39.45

36.20

38.65

91,954,500

P.S.O.

257.10

244.90

257.10

53,386,800

P.T.C.L.A

32.30

32.00

32.15

50,637,500

Hub Power

35.05

34.20

34.75

37,538,500

National Bank

45.45

44.10

44.50

15,028,500

M.C.B.

45.05

43.50

43.85

14,751,500

Pak Oilfields

186.85

176.95

182.75

14,159,700

Bosicor Pak

23.75

20.60

21.55

9,302,500

Engro Chem

83.00

81.55

81.95

3,238,300

Fauji Fert

86.00

84.85

84.85

1,183,200