STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated Apr 03, 2004

 

The KSE-100 index is expected to remain range-bound for a number of reasons. The inadequate availability of water will not only affect the yield of crops but will also lead to less than expected growth of manufacturing sector. The upward trend in interest rates has also become a cause of concern. Inflation rate is also moving upward. All these factors are expected to affect corporate earnings negatively. Therefore, the investors may not be interested in accumulating shares at current prices. Technical correction has become overdue and keeping in view the recent hike in Badla rate, loss of 200 to 500 point in index cannot be ruled out. The points may look substantial but translate into very nominal percentage points.

 

 

 

 

According to news reports the GoP plans to sell 10% of its holding in Pakistan Petroleum Limited (PPL) before June end this year. With the appointment of the Lead Manager Elixier Securities the divestment is likely to come to the market soon. The Privatization Commission will offer shares through local stock exchanges. Two of the recent transactions, OGDC and SSGC, have yielded very encouraging results. It is expected that sale of PPL shares may create yet another record.

ADAMJEE INSURANCE COMPANY

The company has notified to the Karachi Stock Exchange that the Board of Directors meeting, for approval of annual accounts, scheduled for March 30, 2004 has been deferred. The reason for the postponement was said to be the Supreme Court judgement. There are two point of views regarding this act of the sitting Board of Directors. Some analysts say, "as such approval of accounts should have not been a cause of concern". However, other believe, "The annual accounts may contain certain 'year end appropriations' which were feared to be questioned at the annual general meeting. Therefore, additional time was required to prepare the revised accounts". It is worth noting that at the next annual general meeting not only accounts for three years have to be approved but election of directors also has to be held.

D. G. KHAN CEMENT

Recently there were rumours that D. G. Khan Cement is negotiating purchase of a cement plant located in Southern region. The latest news not only proved these rumours baseless but also pinpointed the location of proposed plant at Chakwal. It is understood that the company has signed a contract with a Danish company for the supply of a complete plant of 4,000 tonnes per day cement production capacity. The plant is based on state-of-the-art technology. The unique feature of the plant is its efficient rotary kiln, the first of its kind in Pakistan. At present D. G. Khan has a total installed capacity of 6,200 tonnes/day, which is being optimized to produce 500 tonnes/day additional cement. With the completion of the new plant, the total installed capacity of the company will exceed 3.32 million tonnes per annum.

FAYSAL BANK

The bank is expected to shortly float its first open-ended mutual fund, the largest offering of its kind providing an attractive window for retail investors. The fund has received overwhelming response from commercial banks, investment banks, other financial institutions and corporates. The amount, including seed capital would cross one billion rupee. According to bank sources, subscription for general public will be opened for two/three days without any front loading as an incentive. A large number of mutual funds are expected to be floated. One may not understand the logic but it is interesting that when the market was around 3900 level the average PE multiples were nearly 9%. Though the market hovers around 5000 level. At present the average market PE multiple is still around 9 %.

ATTOCK CEMENT PAKISTAN

The company has posted outstanding performance during July-December 2003 period, despite being located in Southern region facing over-supply of cement. Cement production shot up by 12% and aggregate sales volume surged by 10%. During this period the average capacity utilization of the company remained 84% as compared to 72% in the corresponding period of last year. The company has completed installation of coal firing system in November 2003, which will further improve the gross margin in January-June period of year 2004. The company is trying to further enhance its export of cement and clinker to Middle East. With reduction in fuel cost and improved capacity utilization, the company is expected to be more competitive. The company is expected to post above Rs 250 million profit after tax for the full year and shareholders should expect dividend ranging from 10 to 15 per cent.

PAKISTAN INTERNATIONAL AIRLINES

The national carrier has posted Rs 3.7 billion profit before tax for the year ending December 31, 2003. The airline has recorded a growth of Rs 4.28 billion in revenue to Rs 47.95 billion as against revenue of Rs 43.67 billion for year 2002. The growth in profit was registered despite 15% increase in fuel cost.

Company High  Low Closing Week's Turnover

Oil&Gas Dev.

61.45

59.20

61.45

436,517,000

Sui South Gas

35.05

33.00

34.40

161,288,500

Sui North Gas

63.85

58.95

63.50

134,638,500

P.T.C.L.A

40.60

40.45

40.60

107,429,000

Fauji Fert Bin

22.35

21.50

22.35

97,069,500

Engro Chem.

102.90

98.30

101.50

34,015,400

Hub Power

38.65

38.45

38.65

11,470,500

I.C.I.

85.30

84.50

84.90

10,790,000

Fauji Fert.

112.50

111.05

112.50

7,321,600

Pak.PTA Ltd.

17.25

17.05

17.15

5,668,000