STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated November  27, 2003

 

The KSE-100 registering gains at the back of possible resolution on LFO issue witnessed erosion due to less than expected dividend declared by OGDC and the second attack on President, General Pervez Musharraf within 11 days. Still, the level of positive sentiments could be gauged by the fact that the index closed at 4,395 level, 70 points gain on week to week basis.

 

 

 

The public offer for OGDC shares was oversubscribed by eight times, which has deepened, broadened and strengthened equities market. The share offered at Rs 32 hovered around Rs 55 till announcement of quarterly results but dipped after less than expected dividend was declared. However, some analysts say that the market over reacted. First, because the expectation about 15% interim dividend was not realistic. Second, investors should not base their decision on quarterly results. Earnings for a quarter may be low or high due to certain expenses being specific to the quarter. The over indulgence of day traders in OGDC shares has kept its price a little volatile. The analysts also suggest that serious investors must read the offer document once again and base their decision on full year earnings.

Equities market is expected to remain vibrant during the forthcoming weeks due to bidding for Habib Bank, scheduled for December 29, 2003. Another factor adding to positive sentiments is the CCoP's go ahead for divestment of 5% shares of SSGC and IPO of 5% shares of Pakistan Petroleum (PPL). However, the only cause of concern is that the government has neither announced the date nor the price of SSGC share for the public offer.

FFC-BIN QASIM

News on the merger of FFC-Bin Qasim (previously FFC-Jordan) and Fauji Fertilizer has brought FFC-Bin Qasim in the limelight and heavy trading in the scrip has been witnessed. According to some analysts, the formal merger is expected to take some time. The management of Fauji Fertilizer would first like to see the impact of takeover and merger of Pak Saudi Fertilizer and only then can decide on this important issue. The company had stopped producing DAP fertilizer, being a unviable business. The GoP has compensated to a large extent but writing off of DAP plant and its sale as scrap remain a serious issue. According to some analysts, the company has to take the hit one day, the sooner it makes the decision the better it will be for the company.

OGDC

The OGDC has declared 10% interim dividend at the time of release of financial results for the first quarter ending September 30, 2003. Sales for the quarter under review amounted to Rs 11,452 million as compared to Rs 10,072 million for the corresponding quarter of year 2002. Profit before tax declined from Rs 6,830 million to Rs 6,616 million. However, profit after tax improved from Rs 4,680 million to Rs 4,688 million.

KASB BANK

Soon after takeover by the KASB Group, capital of the bank has increased two-fold and the client base at large has access not only to trade finance, SME financing, commercial and consumer banking but also to lease financing, equities and debt instruments, brokerage and investment banking. The bank has registered substantial increase in asset and deposit base at approximately 100% and 95% respectively. Capital adequacy ration stood at 26% as on September 30, 2003 - much higher than the required level. Credit rating of the bank has improved from BB+ to A-3 for short-term and from B to BBB- for medium to long-term. It has been assigned positive outlook in less than a year of takeover by the KASB Group.

DIN TEXTILE MILLS

The company has posted Rs 137.8 million profit after tax for the year ending September 30, 2003 as compared to Rs 122.6 million profit for the last year. While there was increase in sales, the hike in cost of goods sold lowered profit from Rs 258 million to Rs 223 million. Sales grew from Rs 1,514 million to Rs 1,540 million. Cost of goods sold went up from Rs 1,256 million to Rs 1,317 million. However, reduction in financial charges, going down from Rs 56 million to Rs 38 million, helped in improving the bottom line. The Board of Directors approved distribution of 20% dividend among the shareholders. The company had also distributed 20% dividend for the year 2002.

 

 

RESHAM TEXTILE MILLS

Reduction in sales and hike in cost of goods sold proved disastrous for the company. It has posted Rs 6.8 million loss after tax for the year ending September 30, 2003 as against over Rs 18 million profit the last year. However, better cost control and reduction in financial charges helped in containing losses. Sales came down from Rs 742 million to Rs 714 million. Cost of goods sold went up from Rs 651 million to Rs 697 million. Operating profit came down from Rs 91 million to Rs 22 million. Operating expenses declined from Rs 38 million to Rs 16 million. Financial charges came down from Rs 20 million to Rs 11 million. However, a cause of concern is accumulated losses amounting to Rs 226 million as on September 30, 2003.

Company High  Low Closing Week's Turnover

Oil & Gas Deve.

55.25

53.20

53.20

257,856,500

D.G.K. Cement

46.35

45.35

45.35

100,518,000

Fauji Fert Bin

18.10

17.05

17.55

83,893,000

P.T.C.L.A XD

36.40

36.00

36.00

76,324,000

Pak Oilfields

235.40

230.10

233.15

74,346,900

Hub Power XD

39.50

38.35

38.35

72,888,500

P.S.O.

283.20

280.05

280.05

58,669,600

National Bank

54.00

53.55

53.55

57,560,500

Bosicor Pak

24.35

23.70

23.70

12,182,500

Adamjee Ins

66.30

64.50

65.75

2,925,500