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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 Nov 26, 2005

MARKET THIS WEEK

With no concrete development on the PTCL-Etisalat issue so far, market continues to remain range bound posting a week close of over 9000. The banking sector ontinues to attract investor interest and the top banking scrips witnessed heavy activity. On the other hand, uncertainty regarding PTCL's deal and the future contract expiry has kept investors cautious and consequently investor interest in sideboard items is picking up and the second and third tier stocks have seen higher volumes. Overall, the market closed 1.47% higher WoW.

OUTLOOK FOR THE FUTURE

We expect the market to remain range bound mainly due to lack of significant triggers, uncertainty regarding the PTCL deal and future contract expiry. Any positive development on the PTCL Etisalat deal may a trigger for the market. We recommend a selectively positive stance on the market and advise investors to go long in fundamentally strong stocks namely POL, SNGPL, FFBL, KAPCO, ICI, Packages, NML, NCL and Azgard Nine.

FUNDAMENTAL CHANGES

The major developments this week were:

* Minister for Privatization Dr. Abdul Hafeez Shaikh has reiterated his optimism regarding the deal with Etisalat.

* Amidst rumors that Pakistan would lobby its case for receiving GSP plus status to the EU come January 2006, on the back of earthquake devastation, it is now being widely circulated that the country will not receive this compensation.

* LSM (Large Scale Manufacturing) production growth has shown a considerable decline YoY in the first two months of FY06. With the exception of pharma and leather, all major industrial groups have experienced a growth slowdown.

* In its effort to provide speedy relief, Government has augmented the compensation amount to PRs175,000 (from PRs20,000) per household for those affected in Azad Kashmir and NWFP.

* The privatization of Pakistan State Oil is once again gaining momentum. The Privatization Commission expects the date for the first pre-bid meeting to be announced within the next three weeks, and a date for bidding to be announced soon.

* Crude oil inventories showed a significant increase during the week topping consensus forecasts. Distillate and heating oil stocks jumped up 1.1mn barrels as against a consensus forecast of 800,000-barrel increase.

* Telecard announced 1QFY06 results announcing profits after tax of PRs54.68mn, which translates into PRs0.18 on a per share basis. The results are 12% higher YoY (1QFY05 EPS: PRs0.16).

* In the latest auction, State Bank of Pakistan (SBP) raised the yields on 6-month T-Bills by 15bps and 12-month T-Bills by 2bps. Yields on the 3-month T-Bill were left intact.

* Foreign private investment in the first four months of the current fiscal year continues to show strong trend, rising by 127% to US$682.0mn during Jul-Oct 2005. Foreign direct investment during Jul-Oct 2005 was recorded at US$465.7mn, 69% higher YoY than the amount received during the same period last year.

THIS WEEK'S TOP STORIES

PICT- poised to cash in on growing trade activity With 1) containerization in Pakistan picking up gradually and 2) upcoming expansions poised to overcome capacity constraints for the company, we feel that the stage is all set for Pakistan International Container Terminal (PICT) to reap the benefits of the growing international trade in Pakistan (CAGR of 12.4% over FY05-08). With a bottom-line CAGR of 30% over FY05-10 and potential upside of 29% at current levels, we initiate coverage on PICT with a BUY recommendation.

HONDA ATLAS CARS: 1H2006 RESULT REVIEW

Honda Atlas Cars announced 1HFY06 results yesterday posting earnings after tax of PRs280mn (EPS: PRs6.67) as against PRs183mn (EPS: PRs4.36) in the corresponding period last year, up 53% YoY. On a QoQ basis, the company showed a decline in profitability as the company posted PRs84mn (EPS: PRs2.01) in 2Q06 as against PRs196mn (EPS: PRs4.66), down 57% QoQ. On the back of prevalent cost concerns, we recommend a Neutral stance on the stock with a DCF based price objective of PRs107.00.

OIL - POL REMAINS OUR PREFERRED PICK

Crude oil prices have been showing strength over the past few days on the back of higher demand for heating oil during the winter season. While we believe that the volatility is likely to characterize the near term outlook of oil markets, improvement in oil supplies in the medium term are likely to keep prices moderate.

POL remains our preferred pick in the sector owing to its short-term leverage to oil (higher revenue accruing from crude oil) and longer term defensive (increasing gas share in revenue). We maintain our Buy recommendation on POL with a Price Objective of PRs474/share.

PSO - NEUTRAL MAINTAINED

Driven by our concern on volumetric growth and price control, we are maintaining our neutral stance on Pakistan State Oil. While we believe that petroleum volumes, especially for High Speed Diesel, are likely to recover, we expect overall volumetric growth to be in the range of 3-4% for FY06. On the other hand, the government does not appear to be in the favor of further increase in petroleum prices. We thus believe that earnings momentum is likely to slow down for FY06.

MERRILL LYNCH ROAD TRIP TO PAKISTAN- AN OVERVIEW

Below is an excerpt from a note on Merrill Lynch Regional Strategist, Spencer White's recent road trip to Pakistan.

We have remained overweight Pakistan in our regional asset allocation since the beginning of August 2005.

Post our latest visit we believe that although market volatility is likely to remain high, the growth prospects in the economy remain considerable, as is the desire of management to exploit it. Over the next three years we see the greatest opportunities to reflect this view through infrastructure-related activity, the growth in the consumer sector and policy support for the agricultural sector. The most interesting investment opportunities include NBP (financial services), Engro Chemical (new business development), KESC (restructuring) and ICI Pakistan (consumption pared with restructuring). For sheer yield KAPCO (18%, paid in US$) is compelling.

MARKET ROUNDUP

 

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

42.64

43.42

1.83%

Avg. Dly T/O (mn. shares)

412.66

424.16

2.79%

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

462.88

596.17

28.80%

No. of Trading Sessions

5

5

18

KSE 100 Index

8933.51

9064.39

1.47%

KSE ALL Share Index

5953.98

6049.46

1.60%

 
 

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