STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated March 12, 2004

 

Though the KSE-100 index touched the record level of 4,918 points, daily trading volume declined drastically during the week. Many analysts were not able to give a plausible reason for the decline in volume. Some attributed the decline in volume to margin rules and others linked it with Pakistan-India cricket series. The linkage with margin rules seems more probable because prices of the volume leaders declined.
Lately, trading volume of some of the scrips belonging to cement sector grew exceptionally high. The investors' interest was driven by improved earnings. There are also reports that some of the plants have 

 

 

 

 

undertaken expansion programmes. The capacity expected to be added in next five years is estimated around 10 million tonnes. The average capacity utilization rate at present hovers around 70% and once the added capacity becomes operational, cartel's efforts to manage price through quota may not be there. Therefore, there is a word of caution for those who are expanding their cement portfolio. The other sectors to be watched carefully are commercial banks, chemical fertilizer and automobile.

MILLAT TRACTORS

The company has posted Rs 174.5 million profit after tax for July-December 2003 as compared to Rs 65.4 million for the corresponding period of last year. The Board of Directors also approved distribution of 80% interim dividend at the time of approval of half yearly accounts. The dividend payout amounts to Rs 64 million. The company had not paid any interim dividend at the time of announcement of half yearly results for 2002. This improvement in bottom line can be attributed to higher sales, going up from Rs 1,911 million to Rs 2,857 million. Gross profit improved from Rs 178 million to Rs 365 million. While there was increase in general administrative and selling expenses, it was largely compensated by the decline in financial charges. Operating expenses went up from Rs 84.6 million to Rs 102.8 million. Financial charges came down from Rs 17 million to Rs 7 million.

LEGLER-NAFEES DENIM

The company has posted Rs 95 million profit after tax for the year ending December 31, 2003 as compared to Rs 49 million for the last year. The improvement in bottom line can be attributed to a number of factors those include increase in sales and other income and decrease in financial and miscellaneous charges. Sales went up from Rs 503 million to Rs 586 million. Other income grew from Rs 68 million to Rs 132 million. Financial charges declined from Rs 47 million to Rs 27 million. Miscellaneous charges came down from Rs 130 million to Rs 41 million. The EPS improved from Rs 0.56 to Rs 1.10. However, it is worth noting that despite this, the Board of Directors did not approve distribution of dividend. According to the announcement sent to Karachi Stock Exchange no dividend was paid last year.

DAWODD HERCULES CHEMICAL

The company has posted Rs 1,379 million for the year ending December 31, 2004 as compared to Rs 793 million profit for the last year. The sole reason for the improvement of bottom line seems to be more than two-fold increase in other income. Sales grew from Rs 2,810 million to Rs 2,983 million. However, the hike in cost of goods sold brought down gross profit more or less at the level of last year. Selling and administrative expenses went up from Rs 123 million to Rs 172 million. Financial charges also went up from Rs 65 million to Rs 95 million. At the time of review of accounts for the year the Board of Directors also approved distribution of 20% final dividend.

FIRST CAPITAL MUTUAL FUND

The profit after tax of the fund for July-December 2003 took a nosedive as compared to corresponding period of last year, a decline from Rs 15.9 million to Rs 6.5 million. This decline can only be attributed to a free fall in gains from transactions in marketable securities, going down from Rs 13.5 million to Rs 3.7 million. Dividend income also declined from about Rs 4 million to Rs 2 million. More than two fold increase in administrative expenses further eroded the profit. Due to decline in profit EPS came down from Rs 1.06 to Rs 0.44. Keeping in view the vibrant equities market it is difficult to swallow the bitter pill of fall in gains from trading in equities. The company has posted a loss of Rs 17.8 million from trading operations for July-December 2003. The fund had posted over Rs 9 million gains for the corresponding period of year 2002.

ASIAN STOCK FUND

The fund has posted a meager profit after amounting to just Rs 1.1 million for July-December 2003 as compared to Rs 18.5 million profit for the corresponding period of last year. The EPS came down from Rs 1.88 to Rs 0.12. This colossal decline in profit can be attributed to nosedive in capital gains, falling from Rs 13.7 million to Rs 3.2 million. It is difficult to find a plausible rationalization for the fall in profit.

 

 

Company High  Low Closing Week's Turnover

Oil&Gas Dev

53.25

52.50

53.25

91,578,500

P.T.C.L.A

39.85

39.30

39.45

80,757,500

National Bank

58.10

57.75

57.90

27,071,500

Hub Power

37.30

36.95

37.05

19,762,000

Fauji Fert Bin

19.90

19.60

19.90

17,440,000

Sui South Gas

31.80

31.55

31.80

8,202,500

Engro Chem.

96.25

93.95

95.60

5,905,500

M.C.B.

50.70

46.25

46.30

2,510,700

Union Bank

24.75

24.35

24.55

703,000

Fauji Fert.

108.45

107.50

108.45

301,000