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Monday, 19 March 2012

DAILY STOCK MARKET UPDATE: 20.03.2012

Stock



 Karachi Stocks Up 25.80 Points:

KARACHI, Mar 20: The KSE-100 index was at 13103.52, up 25.80 points. (today 11.43 am)
March 19, 2012
5 TOP GAINERS  &  LOOSERS


Siemens Pakistan

Rs 35.89

Nestle Pakistan

Rs (137.83)

UniLever Pak Ltd

Rs 34.90

Rafhan Maize

Rs (89.34)

Mithchells Fruit

Rs 7.92

Service Industries

Rs (8.03)

Gillette

Rs 2.38

Pak Int. Con

Rs (6.70)

Attock Cement

Rs 2.36

ICI Pakistan

Rs (6.69)


Stock Exchange:KSE 100-index plunges 219 points

KARACHI, March 19: The KSE 100-index on Monday took another big plunge of 219.40 points or 1.65 per cent just at the heels of the weekend sell-off as investors appeared to be in a bit haste to cash in on the available margins but there were buyers at the dips.
The net fall over the last two sessions amounted to 2.79 per cent which eroded Rs107 billion from the market capital at
Rs3,381.790 billion and analyst said more selling may be in the pipeline in a highly overbought market.

Among the leading base shares, notably National Bank, Arif Habib Corporation, D.G. Khan Cement and some others remained under pressure among the market leaders and caused major dents in the solid structure of the benchmark.
They were followed by the fertiliser shares under the lead of Engro Corporation and Fauji Fertiliser Bin Qasim followed by reports of cut in supply of gas to their respective units.
An idea of the mounting pressure on the market may well be had from the fact that at one stage the benchmark KSE 100-index was off 5.00 per cent of the session’s peak of 13,329.19, said analyst Hasnain Asghar Ali.
“This time low-priced shares, which had been in the limelight for the last couple of weeks and had assumed the role of volume leaders faced heavy dumping”, he said and added “unloading originated both from the local and foreign investors.
Much of the activity remained centered around low-priced current actives, which came in for partial unloadings out of the huge stocks built-up during the last couple of weeks.
“I don’t think the current run-up is overdone,” said analyst Ahsan Mehanti, “it was essential technical correction, which was overdue in the backdrop of sustained run-up”.
He said investors were apparently adjusting positions ahead of the advent of the reformed Capital Gains Tax from April 1, which he said could change the entire market psychology after its implementation.
Minus signs dominated the list under the lead of Nestle Pakistan and Rafhan Maize, off Rs137.83 and 89.34 respectively, while
among the top gainers Siemens Pakistan and Unilever Pakistan, which rose by Rs35.89 and Rs34.90 were leading.

Turnover figure fell to 256.860m shares from the previous 428m shares as losers held a strong lead over the gainers at 234 to 77, with 73 shares holding onto the last levels.
The active list was led by JS & Co, off Re1 at Rs17.39 on 21m shares, followed by Lafarge Pakistan, easy 28 paisa at Rs3.59 on 18m shares, Dewan Cement, steady 16 paisa at Rs4.22 on 17m shares, KESC, off 54 paisa at Rs2.83 on 12m shares, JS Bank, lower
46 paisa at Rs5.82 on 10m shares, WorldCall Telecom, steady 22 paisa at Rs2.40 also on 10m shares and Bank of Punjab, off 93 paisa at Rs7.99 on 9m shares.

They were followed by Fauji Cement, easy 26 paisa at Rs5.18 on 8m shares, Azgard Nine, lower 69 paisa at Rs6.25 also on 8m shares and D.G. Khan Cement, off 46 paisa at Rs30.30 also on 8m shares.
FUTURE CONTRACTS: The active list was led by Engro Corporation, sharply lower by Rs5.20 at Rs101.80 on 2.433m shares, D.G. Khan Cement, lower by 37 paisa at Rs30.46 on 2.294m shares and Arif Habib Corporation, off Rs1.54 at Rs29.44 on 1.693m
shares.

They were followed by Fauji Fertiliser Bin Qasim, sharply lower by Rs2.14 at Rs44.11 on 1.343m shares and National Bank, off Rs1.65 at Rs41.72 on 0.699m shares.
DEFAULTER COMPANIES: The active list of this counter was led by Genertech Power, lower 14 paisa at Rs1.05 on 0.572m shares, followed by Kohinoor Industries, higher by 12 paisa at Rs1.84 on 0.225m shares, Dost Steels, lower by eight paisa at
Rs2.58 on 0.168m shares and Dadabhoy Cement, easy by six paisa at Rs1.91 on 0.115m shares.

 

Demutualisation to break KSE monopoly

ISLAMABAD, March 19: The demutualisation of stock exchanges, if approved by the joint session of the parliament, will help break the monopoly of the Karachi Stock Exchange and pave way for the other stock exchanges to play an active role in the equity market, sources believe.
Though the joint session of the National Assembly and the Senate commencing from Tuesday has been called to discuss new terms of engagement with the US, sources in the finance ministry said that the Stock Exchanges (Corporatisation, Demutualisation & Integration) Act, 2012 will be on the agenda as well.
The Demutualisation Act of Securities and Exchange Commission of Pakistan (SECP) has been lingering in the parliament since 2008 due to various technical reasons.
The Demutualisation Bill was approved by the National Assembly in October 2009, but later when it was forwarded to the Senate, amendments were made by the upper house.
However, after the approval of 18th Amendment, the new regulations require that any bill where amendments were made after it was passed by the other house has to be presented to the joint session of National Assembly and Senate.
“This bill is a main engine for the positive growth of investments in capital market of the country,” a finance ministry official said.
“Even to make other capital markets laws a success, there is a need to break the monopoly enjoyed by Karachi Stock Exchange.”
Meanwhile, an official of the SECP said that demutualisation would break the monopoly and ‘increase the participation of Lahore
Stock Exchange and the Islamabad Stock Exchange in the capital markets’.

Out of the three stock exchanges, KSE was incorporated on March 10, 1949 under the Companies Act 1913 (now Companies Ordinance, 1984).
While the LSE and ISE were incorporated under Companies Ordinance, 1984 on October 5, 1970 and October 25, 1989 respectively.
However, all the three stock exchanges are operating as non-profit companies with a mutualised structure, where there is no segregation of trading rights from ownership and members have exclusive trading rights. This ultimately results in conflict of
interest.

It must be noted that demutualisation is the process of converting a non-profit, mutually owned organisation to a for-profit-entity owned by the shareholders. This brings balance among interest of different stakeholders in the corporate and governance structure of a stock exchange.
“Demutualisation is a well established global trend, and domestic bourses cannot attract international strategic partners without going through the process of corporatisation and demutualisation,” the SECP official said.
He said that the domestic stock exchanges can only become international after following the path of other major markets in the region as stock exchanges of Singapore and Hong Kong are looking for partners in South Asian region.
“The launch of Dubai International Financial Stock Exchange (DIFX) and demutualisation of Mumbai Stock Exchange have increased the level of competition for domestic exchanges,” the official added.

 

Foreign investment tumbles


KARACHI, March 19: Foreign private investment fell sharply during the first eight months of the current fiscal year.
The State Bank reported on Monday that the foreign investment dropped 68 per cent to $430 million during the July-February period compared to $1.358 billion in the same period of last year.
The Foreign Direct Investment (FDI) also plunged by 46 per cent to $558 million and the portfolio investment was a net outflow of $128 million.
The United States and Britain were the largest investors during the period under review as the FDI from these countries were $163 million and $158 million, respectively.
Other significant investors were Italy and China as their investment was $116 million and $103 million.
The biggest outflow was noted in the case of Norway. The withdrawal of investment by this country was $227 million.
Pakistan is in dire need of foreign investment since the country’s foreign exchange reserves have been shrinking fast while the foreign inflows have almost reduced to negligible.


MOHAMMED SALEEM MANSOORI


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