PERFORMANCE OF ENERGY SECTOR

S.M. ABBAS ZAIDI,
Research Analyst
, PAGE
July 14 - 20, 2008

In Karachi stock exchange, the power generation companies were not as badly affected as some of the other sectors. However apart from KESC, the other power generation companies lost points and market capitalization because of inconsistency in our economy and poor law an order situation due to which stock exchange was badly affected in 2008.

The present government has failed to tackle economic issues so far resulting a poor fall out at the stock exchange. The power generation companies were not an exception to the persisting phenomenon.

MAJOR COMPANIES

KSE 100 INDEX

% CHANGE

JAN-08

JULY-08

KESC

5.30

5.35

0.93

HUBCO

30.5

27.49

-11

KOT ADDU

48.45

45.17

-7.3

KOHINOOR ENERGY

31.8

26.9

-18.21

JAPAN POWER

6.55

5.42

-21

The above data shows that Karachi electric supply corporation (KESC) started the year with open rate of 5.30 and increased by 0.93% at 5.35 in July 2008. The Hub power company limited (HUBCO) started with open rate of 30.5 but decreased by 11% to 27.49 in month in July 2008. KOT ADDU's starting rate was 48.45 and in July it is recorded 45.17, the rate of this company is decreased by 7.3% in 6 months. The Kohinoor energy rates decreased by 18.21% as in Jan 08 it was recorded at 31.8 and now in July, it is recorded 26.9. During the same year, in Jan 2008 Japan power rate was recorded 6.55 and recently the company rate is recorded 5.42 as it has declined by 21%.

PERFORMANCE OF KESC

KARACHI ELECTRIC SUPPLY CORPORATION

MONTHS

RATE DURING-08

MARKET CAP

1-Jan

5.30

26,037,890,530

31-Jan

5.50

24,655,347,670

1-Feb

5.35

24,655,347,670

29-Feb

5.25

24,194,500,050

3-Mar

5.25

23,964,076,240

31-Mar

4.65

21,890,261,950

1-Apr

4.75

21,198,990,520

30-Apr

4.62

21,014,651,472

2-May

4.56

20,738,142,900

30-May

4.05

18,710,413,372

2-Jun

4.06

18,433,904,800

30-Jun

5.24

25,208,364,814

1-Jul

5.47

25,346,619,100

7-Jul

5.35

24,424,923,860

During the first six months of 2008, the performance of Karachi electric supply corporation in KSE is generally better, infect KESC is the only company which has shown some positively after 6 months. In The first two months stock rates were slightly changed. However, there was an immediate reduction of market capitalization in the month of Jan. During the month of Jan-08 KESC stock rates went high 3.6% to close at 5.50. But, there was a decrease in market capitalization by 5.6%. In Feb there was a decrease of 1.9% and the rates decreased from 5.35 to 5.25 and market capitalization also decreased by 1.9%. In March the rates decreased by 12.9% to close at 4.65, the market capitalization of this month also decreased by almost 9.5%. In April the stock rates slightly decreased from 4.75 to 4.62 by 2.8% and the market capitalization decreased by 1%. In the month of May rates went down 12.6% and to close at 4.05, the market capitalization also decreased by 11% due to collapse of stock exchange and the investors didn't invest in stock exchange. In Jun the KESC's rates shoot up from 4.06 to 5.24 at 22.5%, the market capitalization of the same month was also increased by 27%. In this month of July the performance of level of Karachi Supply Corporation remains slightly high however the market capitalization is slightly low.

PERFORMANCE OF HUBCO

HUB POWER COMPANY LIMITED

MONTHS

RATE DURING-08

MARKET CAP

1-Jan

30.50

35,871,786,400

31-Jan

31.50

36,392,505,880

1-Feb

31.45

36,681,794,480

29-Feb

32.75

37,838,948,880

3-Mar

32.70

37,607,518,000

31-Mar

31.85

36,971,083,080

1-Apr

31.95

37,260,371,680

30-Apr

32.70

37,028,940,800

2-May

32.00

37,086,798,520

30-May

31.30

36,577,650,584

2-Jun

31.61

37,202,513,960

30-Jun

28.88

33,094,615,840

1-Jul

28.60

32,770,612,608

7-Jul

27.49

31,497,742,768

In the first six months of 2008, The Hub Power Company limited lost 11% of stock rates with market capitalization by 14% in KSE. In the first two months the stock rates were increased and also remained consistent till the month of May. During the month of Jan-08 Hub power stock rates went high 3.17% to close at 31.50, there was an increase in market capitalization by 1.43%. In Feb there was also an increase of 4% and the rates increased from 31.45 to 32.75 and market capitalization also increased by 3.2%. In March the rates decreased by 2.7% to close at 31.85, the market capitalization of this month also decreased by 1.72%. In April the stock rates slightly increased from 31.95 to 32.70 by 2.3% and the market capitalization decreased by 1%. In the month of May rates went down 2.2% and to close at 31.30, the market capitalization also decreased by 1.4%. In Jun the Hub power lost 9.4% from 31.61 to 28.88, the market capitalization of the same month was also decreased by 12.4%; the performance level of hub power was very poor in the month of Jun. In this month of July the performance level of Hub Power Company limited is down, both in stocks rates and market capitalization.

CONCLUSION

Today, Pakistan is facing energy crisis. Therefore the energy sector will have a strong support so we can expect this sector will perform better in the future. However, the overall performance of energy sector has been on the declining side but it has not performed that badly as some of the other sectors have in KSE. The major decline in shares is because of the crash of KSE at frequent times as the investors are finding hard to put their money in Stock Exchange.