STOCK WATCH

 

 

By SHABBIR H. KAZMI
Updated July 03, 2004

 

Both the daily trading volume and the KSE-100 index registered substantial decline at the back of mounting political uncertainty and fear of imposition of CVT and other taxes. Though, the GoP has agreed to bring down the rate, it is certain that now speculators have to pay tax on each transaction. The modalities are still being worked out. These taxes will become effective from first of July 2004.
Though, the transaction cost will increase and will also affect the daily trading volume, corporate earnings are expected to improve.

 

 

 

 

The market has been witnessing an erratic movement after the budget announcement but also seems to getting calm. The CVT issue also seems to be resolved amicably as the players are trying to swallow the bitter pill. However, it will be too early to say some thing with conviction. There is a loud talk that the KSE-100 index may touch 6000 level in next couple of months.

Finally, Privatization Commission has announced the price for public offer of shares of Pakistan Petroleum Limited (PPL). The subscription dates have not been announced as yet. Initial feeling was that the scrip has the potential to create new subscription record. However, it is interesting to note that brokerage houses are releasing extensive research reports to present the realistic perspective rather than one sided picture. There cannot be two opinions about the performance of the company over the decades. However, keeping the offer price in mind, knowing the future prospects of the company are also equally important.

BANK ALFALAH

The subscription received against public offer created a new record in the history of Pakistan's equities market. The bank is proposed to be formally listed at Karachi Stock Exchange on July 4, 2004 and accordingly the trading in the shares of the bank will be shifted to Ready Counter under T+3 Settlement system from the said date. The first settlement date would be July 8, 2004. All outstanding contracts carried out shall be settled on the settlement date and members shall not be allowed to transfer their positions to the Ready Clearing Board or any other Board. The KSE may extend the date of settlement if the bank fails to deliver the shares as per agreed time schedule.

SUI SOUTHERN GAS COMPANY

The company has entered into a Syndicate Term Finance Agreement with commercial banks. The SSGC has raised this long-term finance facility to the extent of Rs 3 billion for its capital expenditure and working capital requirements. SSGC has provided a pari passu fixed charge on its pipelines only in favour of the syndicate. Signing of this agreement highlights the efforts of SSGC as well as the syndicate member banks to convert the MoU signed recently into a formal arrangement.

PAKISTAN TELECOMMUNICATION COMPANY

Ever since OGDC has been listed, PTCL is getting lesser attention of investors and its share price has been moving in narrow bandwidth. According to some analysts the scrip is being traded to its fair market value. Investors are keen in knowing some details about the year ended June 30, 2004 and future earnings prospects. According to some reports the company is expected to post around Rs 29 billion profit (EPS of Rs 5.65) as compared to Rs 23 billion for last year. The company has already announced its expansion plan for five years. The reduction in NWD and international tariff is expected to further improve revenue. It also seems that the Privatization is still busy in weighing whether PTCL should be sold as compact utility or wait till it is split.

ARIF HABIB SECURITIES

The company seems to have created a new tradition of declaring interim dividend two days before the ending of financial year. The Board of Directors of the company in its meeting held on June 28, 2004 have approved distribution of 150% dividend and issue of 150% interim bonus shares. Shareholders whose name will appear in the register of Members on September 20, 2004, shall be entitled for the interim dividend and bonus issue. Transferred received by close of business on September 18, 2004 will be treated in time for the purpose of entitlement of dividend and bonus issue to the transferees. The bonus shares so allocated shall rank pari passu in all respects in future with all existing shares except that they shall not qualify for interim dividend declared simultaneously for the year ended June 30, 2004.

THE RESOURCE GROUP (TRG)

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has entered into an agreement to invest up to US$ 5 million equivalent in the shares of TRG Pakistan, the country's largest IT-enabled service firm. TRG will use the investment to expand its operations in the global business services market and to create additional capacity in the company's Pakistan-based service delivery operations. The announcement heralds IFC's first ever investment in the IT sector in Pakistan. It is expected to catalyze higher private capital inflows into the IT-enabled services and call-center sectors, which have huge untapped growth potential in Pakistan. The IFC's investment is expected to enhance investors' awareness about Pakistan's business environment and opportunities. IFC's presence provides an endorsement of Pakistan as an emerging IT market.

 

 

Company High  Low Closing Week's Turnover

Oil&Gas Dev.

66.40

63.60

66.00

292,654,700

D.G.K.Cement

59.15

57.50

59.15

142,547,300

P.T.C.L.

42.55

42.15

42.55

98,681,500

National Bank

67.35

66.35

67.35

86,688,400

Fauji Cement

17.00

16.30

16.90

78,116,000

Hub Power

32.75

32.30

32.75

78,033,000

M.C.B.

51.65

50.60

51.65

34,557,300

I.C.I.

89.60

86.05

88.85

27,142,600

P.S.O.

259.25

256.75

256.80

25,042,800

Pak.PTA Ltd.

17.40

16.20

17.30

24,132,000