CAPITAL MARKETS

 

1- FOREX KERB WATCH

2- COT WEEKLY REVIEW

3- FINEX WEEK

4. STOCK WATCH
5. STOCK MARKET AT A GLANCE


STOCK WATCH


By SHABBIR H. KAZMI
Updated Mar 26, 2005

 

 

The KSE-100 index has lost nearly 1,500 points or more than 16% during the week. The frenzy was caused by the exceptionally high market volatility. While the recent hike of the index was due to less than half a dozen scrips, the decline was broad-based. The market can further decline until a solution is reached.

Pakistan Industrial Credit & Investment Corporation plans to launch a sector-specific fund to be fully invested in the energy sector with a total capital of one billion rupees. The asset management company would raise Rs750 million through private placement while Rs250 million would be offered to the general public. Given 50% weightage of the energy sector in the market, the returns to the fund would represent largely the returns to the whole market. Analysts see this as an extension of increasing market size and relatively better availability of quality issues, which has started to reflect in the deepening of capital markets. The introduction of sector specific funds is a step ahead in the maturity of mutual fund sector in specific and capital market in general. For PICIC Energy Fund, the timing of entry and selection of stocks would be critical factors.

National Bank of Pakistan has announced its 2004 results. The bank posted after tax profits of Rs6,243 million (EPS: Rs12.68) indicating 49% YoY higher growth when compared to last year. The results show a massive improvement over last year despite a decline in average lending rates last year. The bank has been able to curtail the impact of this through a corresponding decline in deposit rates. The Board of Directors approved dividend of Rs1.50/share, and a bonus issue of 20% in addition to the cash payout. For the last three years, National Bank has been maintaining a consistent cash payout of Rs1.25/share. The stock dividend, although equivalent to last year at 20% fell slightly below market expectations. The bank has already applied for an increase in the authorized paid-up capital to Rs7.5 billion from present Rs5 billion. Income from capital markets made a significant proportion of last year's profits. Though, capital market income has also been significant this year, it is lower than last year. However, the decline in capital market income has been more than compensated by increase in fee based income, which has picked up primarily owing to higher trade volumes in the last year. Analysts expect the non-fee income to remain strong in coming year as well.

The telecom tariff war has already begun on full throttle in the cellular phone sector, with all mobile phone companies flooding their advertisements to keep a hold on their consumers in light of the entry of Telenor and Warid. In the fixed line segment, PTCL has already been undertaking tariff rebalancing for the last 6 years in order to prepare itself for just such a scenario where new entrants have come in. Yet again, there is talk going around that PTCL is considering yet another tariff cut. According to a press report PTCL officials are busy in examining various alternatives. The company is expected to make a public announcement some time in May. New tariffs, if any, would most likely be applicable from the beginning of next financial year. A reduction in the range of 15 to 30 percent is being expected for the forthcoming fiscal year. This is the sort of range of reduction that PTCL has maintained over the last couple of years in its NWD and International call charges. The company is not likely to get a hit of more than Rs2 billion in revenues through a reduction in NWD and international call rates. According to another estimate, a 15% reduction in international outgoing and NWD call charges would cause a drop of Rs2.2 billion in PTCL's overall revenues. However, if a 25% reduction is carried out in both call tariffs, the decline in revenues would be around Rs4.5 billion. Analysts believe that the hit to PTCL's revenues will be lightened quite a bit due to the increased ALIS growth and traffic increment that occurs annually as a result of this tariff rebalancing. The news report also talks of reduction in local call rates.

 

 

The government has awarded two exploration licenses to Pakistan Petroleum in Kalat and Tajpur areas. Both the areas fall in Balochistan. PPL plans to drill one exploration well in Kalat in the fourth year of exploration licenses while two exploration wells would be drilled in second and fourth year in Tajpur area. The company intends to invest 5.2 5 million dollars in Kalat and 10.21 million dollars in Tajpur areas. Following acquisition of these two exploration licenses, PPL now has exploration interest in 18 areas. PPL has recently commenced drilling of the first offshore well in Pasni. Supported by improving profitability and cash position, PPL has adopted an aggressive exploration stance to replace and enhance its reserve portfolio.

Company

High

Low

Closing

Week's Turnover

Pak.PTA Ltd.

13.80

11.55

11.55

95,972,500

Hub Power

29.55

28.05

28.05

37,695,500

D.G.K.Cement

67.00

57.50

57.50

32,721,100

Sui North Gas

66.50

57.80

57.80

19,561,700

Fauji Cement

16.80

13.80

13.80

18,159,000

Fauji Fert.

148.30

127.25

127.25

8,487,800

Engro Chem.XD

129.00

122.55

122.55

7,630,000

M.C.B.XBXR

61.85

53.15

53.15

6,816,500

Nishat Mills

101.20

86.80

86.80

5,287,400

I.C.I.

115.55

99.15

99.15

650,900