STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated January  24, 2004

 

At the end of the week KSE-100 index closed at 4,752.37 level as against 4,684.04 closing of last week. Day traders never missed an opportunity for profit taking but institutions continued buying at weakness. Selling in some of the volume leaders was conspicuous at the fagged end of the week.
The talk of the market is, when will the KSE-100 index take a u-turn? Some analysts believe that the decline will commence once the index crosses 4,800 level. Whereas, a few analysts say that index mill not take may not experience a decline till it goes above

 

 

 

 

5,000 level. However, both the groups agree on point that correction has become overdue. The say that once the slide starts the index will loose 300-500 points in quick succession.

In these pages repeated mention has been made about very high intra day volatility of the index. According to some analysts this high volatility is mainly due to over indulgence of day traders in second and third tier scrips. Since prices of these scrips continue to register upward movement, profit taking is also common. As against this increase in prices of volume leaders is normal but not substantial.

Prices of PSO, HUBCO, SSGC, and even Pakistan Oilfield and NBP shares remained range-bond. Some of the scrips belonging to cement sector, i.e. D. G. Khan, Fauji and Meaple Leaf Cement were picks of the speculators. Major activity was also witnessed in Fauji Fertilizer Bin Qasim. Once it was made public that Board of Directors of HUBCO would not be considering distribution of interim dividend in the forthcoming meeting, the interest of traders in the scrip became subdued.

WORLDCALL

An Extraordinary General Meeting of the shareholders of the Company has been scheduled for January 29, 2004 to approve long-term investment in the shares of four associate companies up to Rs 283 million. These companies are WorldCall Telecom (Rs 140 million), Total Media (Rs 26 million), Global Access (Rs 35 million) and GoTel Network (Rs 37 million). In addition the Company intends to extend loans/advances to WorldCall Telecom up to Rs 25 million at the rate of 13.5% or higher as per the criteria laid down under section 208 of the Companies Ordinance 1984. The mark up will be settled on a quarterly basis whereas the principal amount will be repaid upon completition of the period of two years from the date of disbursement or at any earlier date.

On top of this the Company also intends top issue cross corporate guarantees to the financial institutions on behalf of WorldCall Telecom up to Rs 780 million through creation of change on the assets of the Company on such terms and conditions as deemed necessary in the interest of the Company. WorldCall Telecom (formerly WordCall Multivision) was incorporated in Pakistan as a public limited company on March 15, 2001. The company has not commenced commercial operations as yet. Total Media was incorporated on September 23, 2003 as a public limited company and has not yet started its commercial operations. Global Access was incorporated in Bangladesh and commenced operations from January 01, 2002. The existing shareholders include sponsor group holding 20%, other Bangladeshi shareholders holding 15% and foreign/international shareholders holding 65% of total paid up capital. GoTel Network is a public limited company incorporated in Sri Lanka and is carrying on telecommunication business in Sri Lanka under the license dated December 09, 1994.

 

 

FIRST CAPITAL SECURITIES

An Extraordinary General Meeting of the shareholders of the Company has been scheduled for January 29, 2004 to approve long-term investment in the shares of four associate companies up to Rs 88.7 million. These companies are WorldCall Telecom (Rs 52.5 million), GoTel Network (Rs 25 million), World Press (Rs 8 million) and Commercial Properties Modaraba Management (Rs 3.2 million). In addition the Company intends to extend loans/advances to World Press up to Rs 2 million at the rate of 13.5% or higher as per the criteria laid down under section 208 of the Companies Ordinance 1984. The mark up will be settled on a quarterly basis whereas the principal amount will be repaid upon completion of the period of two years from the date of disbursement or at any earlier date. World Press was incorporated in Pakistan on September 11, 2003 as a private limited company. It owns a printing and packaging plant primarily set up to meet the requirements of the associate companies. The Company also prints a daily newspaper. Commercial Properties Modaraba Management is a proposed private limited company for which application has been filed with the Company Registration Office at Lahore. Thereinafter, it will be registered as a Modaraba. It will be a multipurpose Modaraba and will undertake property business. The Modaraba will purchase land/plots and construct/sell, manage and maintain housing schemes, town houses, commercial buildings, shopping malls, departmental stores, super markets, utility markets, utility stores and matters/business relating thereto.