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Monday, 23 January 2012

DAILY STOCK MARKET UPDATE: 23.01.2012



Stock



Karachi Stocks Up 283 Points:
KARACHI, Jan 23: The KSE-100 index was at 12057, up 283 points.(today 2.3pm)

January 20, 2012

TOP  5  SCRIPTS GAINERS AND LOOSERS:
Nestle Pakistan
Rs 121.31
Unilever Pakistan
Rs (58.20)
Rafhan Maize.
Rs 47.22
Shahtaj Sugar
Rs  (3.55)
PSO
Rs 11.56
Javedan Corporation
Rs (3.21)
Pak Oilfields
Rs 11.01
Murree Brewery
Rs (2.30)
National Refinery
Rs 10.47
Premier Sugar
Rs (2.08)

KSE 30 – Shares Index
Previous 10,600.95, Friday’s 10.907.45 plus 306.50 points
KSE 100 – Shares Index
Previous 11,515.59, Friday’s 11,774.68, plus 259.09 points
MARKET CAPITALIZATION
Previous Rs2,991.752bn, Friday’s 3.056.335bn, plus 54.583bn
VOLUME LEADERS
Lafarg Pakistan 27.736m, JS & Co 14.494m, Lotte Pakistan 8.648m, Fauji Fertiliser Bin Qasim 8.457m, Fatima Fertiliser 7,747m shares
TOTAL VOLUME
178.424m shares
TOTAL
TONE: Bullish, total listed 638, actives 340, inactives 298, plus 185, minus 69, unchanged 86

No questions on funds invested in stocks till 2014
KARACHI, Jan 21: Federal Minister for Finance Dr Abdul Hafeez Shaikh has accepted all the proposals forwarded by the Securities and Exchange Commission of Pakistan (SECP) for the revival of capital markets.
The minister visited the KSE on Saturday and addressed the full house of brokers, bankers and other stakeholders.
Some of the faces of major brokers unseen for long time also among the crowd, raised expectations of some extraordinary announcements. And they came in the form of acceptance of all the SECP proposals by the finance minister, which included the following: No questions to be raised over source of income invested in equities till 2014, afterwards, the wealth tax to be treated as white (genuine); withholding tax on sale to be abolished; capital gains tax (CGT) the issue at the heart of the matter to be frozen at 10 per cent till June 2014 and finally, the National Clearing Company of Pakistan Limited (NCCPL) to deduct CGT, so as to avoid a direct contact of investor with the Income Tax officer and dispel the fear of harassment.
The measures would go into effect from April 1, 2012. The minister`s announcement was met with applause and cheers by a jubilant crowd of brokers and other stakeholders.
The minister stated that the CGT was imposed with honesty and simplicity and with the joint efforts of KSE, SECP and FBR.
Dr Hafeez Shaikh said he supported the SECP proposals as they would help in expansion of the stock market and raise investor confidence.
He advised the KSE to focus on the education ofinvestors about the capital market and protection of investors`interest.
The minister for finance also dwelt at length with the picture of the country`s economy and counted the government`s achievements in its improvement.
Earlier, forwarding its proposals, SECP Chairman Mohammad All proposed revamp of CGT regime.
The Regulator stated that since the CGT had remained exempt for past 36 years, it had created an anomaly in shape of un-documented gains accrued through transactions in the Capital Market (CM) during that period.
`This led to a situation where CM investors ended up with legitimate but undocumented gains.
Abrupt change from exempt regime without factoring this anomaly had forced investors to withdraw funds from CM.
The other issue, highlighted by the apex regulator, was the cumbersome calculation and documentation requirements embedded in CGT regime and lastly continuation of withholding tax (WHT) after CGT was double taxation; the market asking for withdrawal of WHT on turnover.
SECP recommendation on measures in CGT regime that could address included the following: As the documentation was not available to substantiate the gains made from CM transaction during the exempt period, SECP proposed that applicability of Section 111 of Income tax Ordinance 2001, requiring unexplained income or assets may be deferred for funds invested in CM till June 30, 2014 and to freeze CGT rate at the current rate applicablefor year 2011-12.
To simplify calculation and ensure timely deposit of tax revenue, generalised collection mechanism at National Clearing Company of Pakistan was recommended.
The SECP chairman mentioned that the CGT had pulled down the market capitalisation of KSE from $75 billion to $33 billion. It had caused income loss to the government in the sum of $12 billion as state-owned equities made up 30 per cent of the total market.
The SECP chairman also related the amendments in margin financing rules and other measures taken by the regulator to promote growth in the capital market.
The chairman SECP requested the minister to grant acceptance of the demands.
KSE Chairman Muneer Kamal and the MD of the bourse Nadeem Naqvi also spoke.
A sitting broker director, Haji Ghani Haji Usman commented that the changes would rejuvenate the market and investor interest in equities; government tax collection would improve and more local and foreign investment would flow into the stock market. He thought that the daily volume of business could shoot up to 150 million shares from current 40 million shares.
Mohammad Sohail, CEO at brokerage Topline Securities, said: `The taxation measures approved by the finance minister `will provide life to a dead market`; trading volumes that had plunged to 10 year low after CGT issues would improve and a vibrant market would thus enable new listings, capital formation and privatisation.
Equities shoot up by 259 points
KARACHI, Jan 20: The shares market on Friday ended the weekend session with a sharp rise of 2.25 per cent on strong covering purchases on low-priced fertiliser and oil sectors amid a loud whispering about some positive changes in the corporate parlance.
However, the underlying sentiment was boosted by the finance minister’s visit to the KSE on Saturday (Jan 21) and his talks with the members on the issue of changes in the collection mode of capital gains tax and other problems linked to stock trading. An idea of buoyancy, that too at the weekend session, was well manifested in the volume figure, which soared to a 16-month high of 179m shares, bulk of which went to the credit of undervalued shares.
The KSE 100-share index shot up by a massive 259.09 points or 2.25 per cent at 11,774.68 points as compared to 11,515.59 a day earlier as most of the leading base shares ended sharply higher.
Floor brokers said investor worries about the contempt case hearing against the prime minister in Supreme Court and fears of its negative fallout on the market were not immediately visible as it was postponed to Feb 1, the weekend considerations have
their toll.

Indications are that the current positive change witnessed in the market psychology in the shape of sustained run-up may continue by the next week also as most of the blue chips are still in the firing range and ensure an attractive bait of capital
gains.“I don’t think the current credible performance of the market, notably 6 per cent rise in the benchmark doesn’t reflect speculative bull flashes,” said a leading stock analyst Ahsan Mehanti, adding, “there may be some sound corporate
perceptions behind it.”

Although the bulk of covering purchases are confined to low-priced pivotals, notably in the fertiliser and oil sectors, some other blue chips, such as ICI Pakistan, Linde Pakistan, Nestle Pakistan, Unilever Pakistan and Rafhan Maize are also in active two-way trade, he said.
However, all eyes are now focused on market’s reopening next week and indications are that perception of an overbought market may not have any relevance to the basic fundamentals, analyst Samar Iqbal said.
Leading gainers were led by Nestle Pakistan, and Rafhan Maize, up by Rs121.31 and 47.22, while losers were led by Unilever Pakistan and Shahtaj Sugar, off Rs58.20 and 3.55 respectively.
Turnover figures soared to a recent record level of 178.424m shares from the previous 93m shares a day earlier as gainers held a strong lead over losers at 185 to 69, with 86 shares holding on to the last levels.
The active list was led by Lafarge Pakistan, steady by five paisa at Rs2.06 on a large volume of 28m shares followed by JS Co, firm by 39 paisa at 5.16 on 15m shares, Lotte Pakistan, easy by four paisa at 9.95 on 9m shares, Fauji Fertiliser Bin Qasi, higher by Rs1.59 at 48.10 also on 9m shares, Fatima Fertiliser, easy by 16 paisa at 22.50 on 8m shares, DG Khan Cement, firm by 38 paisa at 21.00 on 7m shares, and TRG Pakistan, up 25 paisa at 1.59 also on 7m shares.
They were followed by National Bank, higher by 84 paisa at 42.13 on 7m shares, Fauji Fertiliser, sharply higher by Rs6.76 at 172.71 on 6m shares and Engro Corporation, up Rs3.16 at 105.41 also on 6m shares.
FUTURE CONTRACTS: It was another session of large volumes at the lower levels under the lead of National Bank, which surged by 80 paisa at Rs42.20 on 2.089m shares followed by Fauji Fertiliser Bin Qasim, sharply higher by Rs1.39 at 48.08 on 2.035m shares and Engro Corporation, up Rs3.13 at 105.60 on 1.623m shares.
They were followed by Fauji Fertiliser, sharply higher by Rs6.78 at 173.14 on 1.245m shares and DG Khan Cement, firm by 40 paisa at 21.09 on 0.897m shares.
DEFAULTER COs: Active trading was witnessed on this counter in sympathy with the ready counter where prices rose sharply higher under the lead of oil and fertiliser shares.
The active list was again topped by Dost Steel, up 11 paisa at Rs1.31 on 37,308 shares followed by Shahpur Textiles, higher 15 paisa at 0.30 on 29,429 shares, Brothers Textiles, steady seven paisa at 0.50 on 26,169 shares and Genertech Power, firm by five paisa at 0.40 on 12,003 shares.

Mohammed Saleem Mansoori

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