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CURRENCY BUYING

SELLING

US Dollar 59.9 60
Bahrain Dinar 158 158.1
Canadian $ 50.85 50.95
Euro 70.75 70.85
Hong Kong $ 7.65 7.7
Japanese Yen 0.508 0.51
Kuwaiti Dinar 204 204.1
UK Pound 103.7 103.8
Last updated: Friday 23 Dec, 2005-12.30 P.M (PST)

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3 DAYS FORECAST
In oC

CITIES MIN MAX

HUM%

FOR.

KARACHI
Today 12 26 38 Sunny
Tomorrow 11 27 38 Sunny
Day after 11 28 38 Sunny
LAHORE
Today 1 20 87 Sunny
Tomorrow 2 20 87 Sunny
Day after 2 21 87 Sunny
ISLAMABAD
Today 0 18 59 Sunny
Tomorrow 0 18 59 Sunny
Day after 0 21 59 Sunny
HUM%: Humidity In %
FOR.: Weather Forecast
updated: Fri - Sun 23-25 Dec, 2005

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KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1

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  CAPITAL MARKETS
 
 

 

 

 

 
  STOCK MARKET AT A GLANCE

By SHABBIR H. KAZMI
Updated Oct 22, 2005

MARKET THIS WEEK

The market finally underwent a correction and shed a massive 573.55 points after an extended period of steady rise. The market opened on a positive note on Monday on the back of SBP raising exposure of banks in the equity market from 20 to 30% and strong NIT earnings. However, the market declined sharply on Tuesday. Panic selling was cited as the major reason behind the decline. A recovery was seen on Wednesday, but was short-lived as the index took a nosedive and fell by a staggering 6.68% (Thursday and Friday combined). Overall, the market showed a 6.47% decline (WoW).

OUTLOOK FOR THE FUTURE

Settlement of future contracts is due next week, which could keep the market under pressure and volumes low. We advise investors to largely stay on the sidelines but not ignore attractive buying opportunities that arise in select stocks that become attractive on valuations due to the decline. In addition, the result season is in full swing and stock specific opportunities will be there for the taking. We recommend a buy on Azgard

Nine, Chenab Ltd, Fauji Bin Qasim, KAPCO, ICI Pakistan, Nishat Chunian, Nishat Mills, Packages, Pak

Suzuki, Callmate Telips and POL.

FUNDAMENTAL CHANGES

The major developments this week were:

•Fauji Fertilizer Bin Qasim Ltd. (FFBL) reported 46.5% YoY growth in net earnings of PRs1.968bn (EPS: PRs2.11) for 9M05. FFBL also announced a second interim dividend of PRs0.75/share (1st interim of PRs1.25/share).

•The Hub Power Company (Hubco) announced its 1QFY06 results, posting net profit of PRs638mn (EPS: PRs0.55), 56% down YoY.

•ENGRO reported 34% YoY growth in profits to post PRs1.35bn (EPS: PRs: 8.82) for 9M05. The company declared PRs3/share interim cash dividend (already announced PRs3/share in 1H05).

•We expect Packages to report 9M05 profits of PRs608mn (EPS: PRs8.70), 12% higher YoY.

•We expect POL to post earnings after tax of PRs1,413mn (EPS PRs10.75) for 1QFY06 compared to earnings of PRs660mn (EPS: PRs5.02) in the corresponding period last year.

•We expect Indus Motor to post 1Q06 profits of 481mn (EPS: PRs6.11), 30% higher YoY

•Maple Leaf Cement announced 1QFY06 results posting earnings after tax of PRs266mn (EPS: PRs0.90), 91% higher YoY.

•Reportedly, the Ministry of Petroleum and Natural Resources has proposed a reduction in custom duties on High Speed Diesel from 10% to 5%. If implemented, this proposal would negatively affect both oil refining and OMC sectors considerably.

•In the month of Sept-05, core inflation came in at 9.6% (from 9.2% in Aug-05) primarily on account of higher transport inflation.

•Trade deficit reached US$2.37bn (187.5% higher YoY) in 1QFY06. We believe higher trade defi cit is primarily attributed to the rise in international oil prices, as Pakistan imports 70% of fuel demand.

•As per newspaper reports, remittances amounting to US$1,003mn were received during 1QFY06 depicting an increase of 1.98% YoY compared to the same period last year.

•Pioneer Cement announced profit after tax of PRs201mn for 1QFY06 (EPS: PRs1.30), 83% higher YoY.

•As expected Oil Companies Advisory Committee (OCAC) has decided to keep petroleum product prices unchanged for the next fortnight.

•Prime Minister, Shaukat Aziz has said that Pakistan has suffered around US$5bn in losses to infrastructure from the massive earthquake.

THIS WEEK'S TOP STORIES

BANKS - EXPOSURE LIMIT FOR EQUITIES RAISED

In it is latest circular, the State Bank of Pakistan (SBP) has raised the maximum exposure limit of banks to the stock market to 30% of the banks' equity. Previously, banks were allowed to have a maximum exposure of 20% of their equity to the stock market. However, the enhanced 10% exposure is only meant for the futures counter, and investment in the ready market cannot exceed 20% of the bank's equity.

TEXTILE - SPINNING GOLD: TAKE THE STARS HOME

Unfettered access to the US$400bn global Textile and Clothing market, thrown open for the first time after over four decades of quantitative restrictions. The opportunity is huge and the sense of excitement, palpable. Add to this an industry which has invested US$5bn over the last five years to gear up to buoyed demand in this free trade order. Then consider the government, which is taking an extremely supportive stance through budgetary and other reforms on all textile trade related issues. All the while, the domestic cotton crop, as primary raw material for the textile industry, is the fourth largest in the world.

FFBL & ENGRO - 9M05 RESULTS PREVIEW

FFBL and Engro are expected to announce their 9M05 results tomorrow, 20-Oct-05. We expect FFBL to post after tax earnings of PRs1,987mn (EPS: PRs2.13), 50% higher YoY. The chances for cash dividend are dim. 18% growth in DAP sales and better margins on both products are the key drivers for 31% YoY growth in 3Q05 earnings (EPS: PRs0.71). FFBL remains out top pick in the fertilizer sector with a price objective of PRs47.90, offering 39% upside from current levels. We expect Engro to post after tax earnings of PRs1,214mn (EPS: PRs7.94), 21% growth YoY.

CALLMATE - REITERATING BUY & 1QFY06 PREVIEW

Following release of detailed accounts and our meetings with the management and other independent industry experts, we are revising our price objective for Callmate Telips Telecom Limited to PRs80/share (exbonus). Impressive growth in call volumes coupled with equally impressive future plans drives our optimism on the stock. Lack of progress on last mile connectivity and increasing competition though remain causes for concern. However, given the management's performance to date, we remain confident of the company's short to medium term performance. The company is scheduled to announce 1QFY06 results on Friday 21st October 2005.

POL - 1QFY06 RESULT PREVIEW

The Board of Directors of Pakistan Oilfields Ltd (POL) is set to meet tomorrow to announce 1QFY06 results. POL is poised to experience a strong growth in bottom line where we expect an earnings after tax of PRs1,413mn (EPS PRs10.75) compared to earnings of PRs660mn (EPS PRs5.02), a 114% growth. We do not expect the company to pay any dividend. POL has benefited from (1) 54% and 29% increase in oil and gas prices, respectively, and (2) production growth of 32-64% of oil and gas respectively. Production addition in coming quarters would result in further profitability growth. Interest on debt associated with National Refinery's (NRL) acquisition would impact the bottom line.

MARKET ROUNDUP

 

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

42.36

39.72

-6.23%

Avg. Dly T/O (mn. shares)

351.61

299.69

-14.77%

Avg. Dly T/O (US$ mn.)

577.45

555.74

-3.76%

No. of Trading Sessions

5

5

17

KSE 100 Index

8863.87

8289.81

-6.48%

KSE ALL Share Index

5851.38

5522.52

-5.62%

 
 

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