BULLETS FOR STOCK WATCH
•Google will price its latest stock sale at
$295 (£162.55) a share, more than three times the price of its
initial public offering last year. The sale of more than 14 million
shares, expected to raise $4.18bn.
•Bestway Cement offered the highest bid of Rs
305 per share (Rs 3.205 billion in total) for Mustekhum Cement
Limited's (MCL) 85.29 percent share.
•Ministry of Petroleum in a presentation
pointed out that, with the increase in oil prices, the margin of oil
marketing companies and dealers rose substantially.
•OCAC has decided to keep the prices of
petroleum products unchanged for the next fortnight.
•Forex reserves of the country decreased by
$27.2 million to $12.016 billion last week.
The State Bank of Pakistan announced on Thursday
last the total liquid foreign exchange reserves held by the country
on 10th September. The reserves were reported at 12.016 billion
dollars, showing a decline of 27.2 million dollars as compared to
its previous level of 12.043 billion on third September 2005.
According to details the reserves held by the State Bank of Pakistan
stood at 9.358 billion dollars, while net foreign exchange reserves
held by banks stood at 2.658 billion dollars, summing up to a grand
total of 12.016 billion dollars. The central bank witnessed a
decline of 3.5 million dollars in net foreign exchange reserves,
while banks also registered a decline of 23.7 million dollars.
Javedan Cement management will be transferred to
Haji Usman and Group after the formal approval of its bid by the
Cabinet Committee on Privatization. The Group had submitted the
highest bid of Rs 4.315 billion for the purchase of 96.34 per cent
shares of Javedan Cement, at the rate of Rs 80 per share. The
highest bid just meets the minimum floor price fixed by the
Privatization Commission. The bid came when Dr. Abdul Hafeez Sheikh,
Minister for Privatization, announced that the government could not
consider an offer lower than the floor price. At the end of bidding
the minister announced that the highest offer was above the floor
price and was acceptable to the Privatization Commission. Now the
highest offer would be presented before the Privatization Commission
Board for recommendation to the Cabinet Committee on Privatization
for its approval. As the first right, the former owners were asked
to match the highest bid but their representatives declined. The
bidding details would also be submitted to the Sindh High Court.
Bestway Cement has offered the highest Rs 305 per
share amounting to of Rs 3.2 billion to acquire control of Mustehkam
Cement. Federal Minister for Privatization and Investment, Dr. Abdul
Hafeez Shaikh, while presiding over the bidding proceedings,
expressed satisfaction over the bidding and privatization process.
He said it is a matter of great satisfaction that the business
community is actively participating in the privatization process
initiated by the government, for strengthening economy of the
country. Later on, Representative of Bestway, Zamir Chaudhry, while
talking to media men expressed satisfaction over the privatization
process. He said, "We will make extra efforts to further
improve the performance of Mustehkam Cement to overcome shortage of
cement in the country". The plant is located at Hattar,
District Haripur, and has a rated production capacity of 630, 000
tons per annum.
The Joint Working Group has announced the
timeframe for Iran-Pakistan-India gas pipeline. It is expected that
all necessary arrangements and formalities of the project would be
completed by December this year. Iran's field from where the gas
would be supplied has 14 trillion cubic meter reserves (378 trillion
cubic feet as compared to 11 TCF total reserves of the Sui field).
Pakistan's requirement will begin from 90MMCFD (million cubic feet
per day) in 2010 and go up to 540MMCFD by 2015. Similarly, India
will have an initial requirement of about 540MMCFD in 2010 and go up
to 1080MMCFD by 2015. The total requirement for the pipeline will
begin with about 630MMCFD in 2010 and go up to 1620MMCFD by 2015.
Pakistan's economy has grown at an enviable pace
over the last couple of years, with GDP growth of 8.4% achieved
during last financial year. This is evident from increased capacity
utilization of cement, fertilizer and power plants. Taking into
account the positive macroeconomic indicators prevailing in the
country analysts expect industrial growth to continue in the medium
term. The recent surge in international oil prices and resultantly
higher fuel prices has forced industrial units to convert to cheaper
fuel sources- mostly gas and coal.
Sui Northern Gas Pipeline and Sui Southern Gas
Company are expected to benefit from expansion of domestic network.
It has guaranteed a 17.5% fixed return at an EBIT level on its net
operating assets. Therefore, the bottom line is not directly linked
with the sales. However, there is an indirect link between bottom
line earnings and sales: higher demand for gas by customers result
in expansion projects being undertaken by the company, particularly
from Iran-Pakistan gas pipeline project. The increased supply of gas
will have to be transmitted to domestic consumers via SNGPL and SSGC,
and both will have to scale up their distribution networks
Pakistan Oilfields has posted Rs 3.76 billion
profit after tax (EPS: Rs 28.63) in 2005 as against Rs 2.49 billion
profit (EPS: Rs 18.98) for 2004, registering a growth of 51%.
Contrary to market expectations the company only announced Rs 12.50
per share dividend and skipped any Bonus issue. Although, stock
dividends do not have any impact on the fundamental valuations of
the company it does affect the general sentiment of market players.
The scrip seems attractive on current valuation which is
complemented by one of the strongest bottom line growth for the
current fiscal year. According to some analysts, fundamental
investors should take this (only cash and no stock dividend) as a
sign of strength for the company, as it implies that the company
feels it has sufficient cash flows and does not plan to retain or
Attock Cement has announced results for year
ended 30th June 2005 and reporting Rs 861.7 million profit after tax
as against Rs 280.2 million profit for 2004, a growth of 207%. This
translates into an EPS of Rs 11.94 for 2005 compared to an EPS of Rs
3.88 for 2004. The top line of the company grew by 37% as a result
of 23% increase in sales volume and 5% increase in cement prices.
The surge in the company's bottom line was not only due to an
increase in the top line but also through a one time boost in the
form of other income arising from a net capital gain of Rs 334
million through the sale of 5.92 million shares of Attock Petroleum.
The Board of Directors also approved distribution of Rs 1.25 per