SECP's cancellation of recent rules introduced by
the KSE, it closed in the positive region on every day of the week.
The banking and cement sectors turned out to be two of the biggest
beneficiaries of the rally. On the whole, the index closed at 5,371.52
on Friday against 5,161.50 last week, translating into a WoW gain of
OUTLOOK FOR THE FUTURE
The index has been moving from strength to strength
ever since it crossed the 5000 mark and it appears that there is still
further upside potential. However, technical indicators suggest that
the upward momentum may slow down in the near future. A fundamental
analysis of the market supports this view as well: while heavyweights
such as PTCL and OGDC still offer good value to investors, some stocks
have reached, or are approaching, their fair values. Having said that,
the availability of liquidity has been a key driver of the ongoing
rally and as long as there is ample liquidity in the market, it could
continue to forge ahead as it has during the past few weeks.
The major developments this week were:
The government dispatched 3,500 fresh troops to
Wana to reinforce the 13,000 troops already there. This was in line
with the government's ultimatum to the local tribes to hand over
suspected Al Qaeda sympathizers by April 10. However, after a grand
tribal jirga, where all the tribes of the northwestern area bordering
Afghanistan were represented, a 300-man lashkar was formed with the
authority to demolish the houses and impose a fine of PkR1 mn on all
Al-Qaeda sympathizers that were identified by their tribes. As a
result, the government extended its deadline by a month.
As per a source, the government is considering
reducing the GST rate from the existing 15% to 12% on luxury items and
5% on necessary items. Also, the source disclosed that the government
is considering reducing corporate tax rates from 35% for listed
companies and 39% for unlisted companies to 25% across the board in
the budget for FY05.
Reportedly, ginners are sitting on 1.5mn bales
of unsold cotton. Given the fact that the ginners paid a high price
for phutti, they face considerable losses if they sell cotton at the
prevailing lower prices.
Figures released by the Pakistan Cotton
Ginner's Association indicate that total cotton production reached
9.75mn bales by April 1, 2004.
Mobilink plans to invest $250mn for expansion
with an aim to double its consumer base and surpass PTCL's number of
customers by the end of this year.
Cement sales recorded an increase from 8.674mn
tonnes to 9.79mn tonnes during the first nine months of the current
fiscal year, translating into a 14 percent rise YoY. Exports similarly
jumped by 203 percent from 257.41k tons to 779.99k tons during the
As per sources in the Sindh government, the
province has asked the National Finance Commission to give revenue
generation a weight of 15% for distribution purposes. Sindh has also
suggested a weight of 70% for population with the remaining 15% to be
used for backwardness and poverty. The province however has stated
that it is still open for negotiations. The source also claimed that
Balochistan has supported the request made by Sindh, whilst the NWFP
has not indicated its opinion on the matter.
The Commerce Minister, Humayun Akhtar, informed
exporters that the European Commission has made an offer to review the
anti-dumping duty imposed on bed linen exports from Pakistan.
The National Assembly approved the National
Security Council Bill.
The Supreme Court gave Shahbaz Sharif
permission to return to the country.
Faysal Bank Limited received a number of
Expressions of Interest for the divestment of 51% stake in Saadi
Cement. Faysal Bank is the financial advisor handling the transaction
on behalf of various financial institutions. According to the bank,
three parties have shown an interest in acquiring the stake which
include AKD Securities, Arif Habib Co. and Siddiq Sons. Saadi Cement
has an installed capacity of 1.5mn tons of cement annually. The major
sponsor of the company is Pakland Cement Ltd., which holds a 43% stake
in the company.
In order to make its plans for textile cities a
reality before the end of the current fiscal year, the government has
formed a company called the Pakistan Textile City Limited in Karachi,
the first of three such companies the government plans to establish.
The next two will be set up in Lahore and Faisalabad.
Reportedly, the ministerial committee on autos
will be making a decision with regards to the import of reconditioned
cars soon. In this regard, the committee has summoned the various
stakeholders to present their points of view on the subject next
Monday. However, as per the Finance Minister, the government will be
forced into a decision if car premiums do not come down soon. The
Minister also hinted at an adjustment in auto tariffs in the next
According to Urdu daily Jang, the top
management of PTCL has formed a committee to prepare an attractive
voluntary separation scheme for all categories of staff. The other
task of this committee is to suggest measures to improve the
performance of the company.
The SECP cancelled the March 29th circular from
the KSE regarding changes in carry over transactions. Reportedly, the
said decision was taken by the regulator owing to the fact that it did
not want the KSE to come up with new initiatives since it was in the
process of phasing out COT. Press reports are also indicating that the
SECP's decision will lower system risk within the market, which
increased after the KSE circular.
As per official sources, the government and the
IMF have made their initial forecast for tax collections for FY2004-05
as part of the 8th review of the IMF's PRGF. The new target of
PkR56.570bn has been set based on a 10% growth rate and an additional
PkR5bn. Until March 2004, the CBR had collected PkR351.7bn, which is
13% YoY higher than the amount collected during the same period last
year and represents 69% of the current year's target.
Pakistan Oilfields Ltd will be participating in
the bidding for a cellular license expected this month as a member of
Mkt. Cap (US $ bn)
Avg. Dly T/O (mn shares)
Avg. Dly T/O (US$ mn)
No. of Trading Sessions
KSE 100 Index
KSE ALL Share Index