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Thursday, 31 May 2012


KARACHI STOCK EXCHANGE-DAILY MARKET TREND: STOCK MARKET UPDATE: 01.06.2012: STOCK: Karachi Stocks Down 85.14 Points: KARACHI, May 31: At close of trading, the KSE-100 index was at 13786.62, down 85.14 po...



Karachi Stocks Down 85.14 Points:
KARACHI, May 31: At close of trading, the KSE-100 index was at 13786.62, down 85.14 points.

May 31, 2012

Rafhan Maize
Rs 20.70
UniLiver Pak
Rs (68.61)
Mithchells Fruit
Rs 15.79
Nestle Pak
Rs (20.44)
Island Textile
Rs 6.10
Shezan Int’l
Rs (9.05)
Attock Refinery
Rs 4.99
Attock Petroleum
Rs (6.71))
Ismail Industries
Rs 4.72
Habib Bank Ltd
Rs (4.72)

Bearish spell continues on stock market
KARACHI, May 31: Stocks further pummelled on the Karachi stock market on Thursday as the KSE-100 index lost another 85.14 points to close at 13,786.62 in thin trade.
Market experts said that foreign equity buying, which amounted to net $3.60 million on Thursday, helped share values rise in early trade.
However, local institutions and individuals were reluctant to commit funds to stocks until the announcement of the Federal Budget on Friday.
A trader said that the investors were also nervous over the fall of rupee against dollar, which many thought could impact some of the major sectors. Analysts were re-evaluating the projected earnings.
Samar Iqbal, equity dealer at Topline Securities, observed that the fall in global markets and weak local currency kept investors on the sidelines. As a result market remained in narrow band with low volumes.
Cement sector remained under focus on conflicting news regarding reduction in excise duty in the new budget. PPL witnessed good activity after news that the government has revised upward its public offering price.
Ahsan Mehanti at Arif Habib Corp commented that uncertain global stocks and commodities, concerns over fall in rupee dollar parity amid macroeconomic instability and uncertainty over Pak-US relations on NATO supply issue played catalyst role in bearish sentiments despite support in cement and power sector on pre-budget speculations.
Hasnain Asghar Ali at Invisor Securities said that the bargain hunters ignored the bleak economic and financial picture being project and cautiously accumulated frontline stocks, which were thought to continue to offer consistent dividend yields and sustained growth in earnings.
Meanwhile, the budget leaks were received with mixed response. Reports indicated that the government had decided to abolish federal excise duty (FED) on 10 items, including cosmetics and filter rods.
The budget makers were thought to have ignored a major budgetary proposal of the Federal Board of Revenue (FBR) that sought to increase the rate of FED in value addition mode from Rs1 per kg to Rs4 per kg on the import of edible oil.
The reports that the government’s failure to release Rs18 billion to a group of eight independent power producers (IPPs) was keeping them from utilising optimal capacity and that FED on cement was expected to be reduced by only Rs100, from Rs500 to Rs400 per ton, against the earlier industry hopes of FED cut to one-half, from Rs500 to Rs250 ton. On the positive side, it was thought that the government would decided to reduce the rate of 20-22 per cent sales tax on nearly 100 raw materials and inputs to standard rate of 16 per cent and the Oil and Gas Regulatory Authority (Ogra) had recommended reduction in price of Petroleum Oil and Lubricant (POL) products by Rs13.24 per litre from June 1.
The KSE-30 index fell 70.28 points to 11,951.07. Turnover slumped further to 125 million shares, from 129 million shares the earlier day.
However, in terms of trading value, there was increase of Rs15 million to Rs5.659 billion, from Rs5.643 billion. Market capitalisation declined by Rs20 to Rs3.528 trillion, from Rs3.548 trillion.
Among 365 active issues, 185 ended in red, compared to 106 in the green zone. The active list was led by DGK Cement, down by 35 paisa to Rs41.14 on 12m shares, Jah Sidd Co fell by 77 paisa to Rs14.85 on 11m shares, Engro Corporation lost another 90 paisa to Rs107.60 on 9m shares.
Lucky Cement shed 9 paisa to Rs126.29 on 8m shares, Engro Foods decreased by Rs3.01 to Rs65.19 on 6m shares, PTCL was lower by 51 paisa to Rs14.81 on 5m shares, Fatima Fertiliser Co shed 16 paisa to Rs24.15 on 4m shares, Fauji Cement down 5 paisa to Rs6.15 on 3m shares, Lafarge Pakistan slid 4 paisa to Rs4.54 on 3m shares and NBP lost 26 paisa to Rs45.09 on 3m shares.

Shares Market perfrom well
ISLAMABAD, May 31: The stock market performed well in the outgoing fiscal year as the KSE 100-index touched the four-year high above 14,000-barrier in May 2012 reflecting confidence of investors in the equity market.
The Economic Survey 2011-12 said that the leading stock markets indices of the world witnessed mixed trends with negative growth of 18.1 per cent in China. However, the KSE 100-index, which stood at 12,496 on June 20, 2011, closed at 14,618 on May 7, 2012, showing a growth of 17 per cent over the closing index of last financial year.
At the capital market the outperforming sectors were oil and gas sector, food producers, chemicals, construction and materials, among these the personal goods comprise of largest sector with 188 companies mostly related to the textile sector with a listed and market capital of Rs54.36 billion.
Another key development at the stock markets during the fiscal 2011-12 was that the government levied Capital Gains Tax on securities at the rate of 8 per cent and 10 per cent for investment holding up to six months and 12 months respectively till June 30, 2014. NCCPL will be depositing the tax with the FBR on an annual basis.
Besides the net investment by the foreign investors in the capital market during July-March 2011-12 reflected a net outflow of $176 million.
“This indicates that bullish trend observed in Pakistani equity market is due to the restoration of the confidence of local investors and institutions,” the economic survey said and added, enactment of demutualisation law will further strengthen the country’s stock markets.
While the second largest capital market of the country Lahore Stock Exchange witnessed an encouraging sign. The turnover of shares on the LSE during July-March 2011-12 was 0.58 billion shares compared to 0.923 billion during the same period last year, but the total paid-up capital increased from Rs888.2 billion in June 2011 to Rs981.7 billion in March, 2012.
The Islamabad Stock Exchange (ISE) witnessed a mixed trend during the first nine months of 2011-12.


KARACHI STOCK EXCHANGE-DAILY MARKET TREND: STOCK MARKET UPDATE:31.05.2012: STOCK: Karachi Stocks Down 199.10 Points: KARACHI, May 30: At close of trading, the KSE-100 index was at 13872.75, down 199.10...



Karachi Stocks Down 199.10 Points:
KARACHI, May 30: At close of trading, the KSE-100 index was at 13872.75, down 199.10 points.

May 30, 2012

Rafhan Maize
Rs 29.12
UniLiver Food
Rs (152.37)
Mitchells Fruit
Rs 15.05
Nestle Pak
Rs (50.13)
Island Textiles
Rs 9.05
Bata Pak
Rs (9.05)
Pak Oilfields
Rs 5.53
Seimens Pak
Rs (8.33)
Indus Motor Co
Rs 4.20
Pak Services
Rs (7.71)

KSE Index loses 200 points on nervousness
KARACHI, May 30: Shares plunged on the Karachi Stock Exchange on Wednesday with the KSE-100 index posting a massive loss of 200.09 points and closing at 13,871.76 points.
The stocks climbed higher in early trade but were pushed back by the bears once more below the 14,000 level, which traders said was turning out to be a strong resistance for the market.
The foreign investors picked up equities valued at $2.93 million on Wednesday, quite in contrast with the offloading of the
day earlier. Yet the banks reduced portfolio by $2.53 million.

Many brokers and dealers said that investors nervousness just before the budget was quite understandable. Most preferred to remain on the sidelines. That was represented by a dip in volume of trade by 19 per cent to 129 million shares, from 160 million shares that changed hands a day earlier.
Trading value also stood reduced to Rs5.643 billion, from Rs5.835 billion. The aggregate value of all shares quoted on the exchange came down by Rs53 billion to Rs3.548 trillion on Wednesday, from Rs3.601 trillion the previous day.
Equity dealer, Samar Iqbal at Topline Securities said that the declining rupee against the dollar and news of tax on gas price affected investor sentiments. Also uncertainty in the global stocks and currency markets forced investors to stay on the sidelines.
Ahsan Mehanti at Arif Habib Corp commented that the local equity market remained in bearish frame of mind amid thin trade on investor concerns over unstable macroeconomic situation and falling rupee-dollar parity.
He said that the proposals for increase in gas development cess for industrial sector, fall in global stocks and commodities on eurozone debt crises, limited foreign and institutional support played a catalyst role in bearish sentiments in stocks across the board. Investors also remained cautious ahead of budget announcements and uncertainty over Pak-US relations.
The news flow did not offer much to cheer. The country was thought to miss the export revenue target due to declining cotton prices in the international market. The cotton exports in terms of quantity had doubled in the current fiscal year as compared to last year from 0.534 million bales to 1.171 million bales.
Yet the export earnings were expected to recede to $231 million, from $320 million due to decline in cotton prices. The country was also believed to be going wayward in regard to current account deficit, owing to slow foreign inflows and high trade deficits.
Pakistan’s current account balance in last fiscal year (FY11) stood positive for the first time in six years and surplus by $540 million primarily driven by all-time high inflows of home remittances and goods exports.
On the slightly positive note, reports were that the draft Foreign Assistance Policy Framework had recommended to the government to give preference to grants and soft-loans over other types of loans, which would be used only in those cases where it had been established that the proposed project would contribute to investment that would accelerate economic growth. The market cap based KSE-30 index plunged by 221.93 points on Wednesday to 12,021.35 points. The declining
stocks at 201 were more than twice the rising issues at 99 with 67 of the 367 active issues remaining unchanged.

On the active list, all ten top volume leaders ended in the minus territory. BankIslami Pakistan, the recent investors’ favorite lost 62 paisa to Rs11.42 on 16m shares. Engro Corporation retreated by Rs5.20 to Rs108.50 on 9m shares, D.G.
Khan Cement was down by Rs1.65 to Rs41.49 on 9m shares, Jah Sidd Co eased by 63 paisa to Rs15.62 on 9m shares, Fauji Cement slid 16 paisa to Rs6.10 on 6m shares.
Fauji Fertiliser was down by Rs4 to Rs109.06 on 5m shares and Fatima Fertiliser shed 48 paisa to Rs24.31 on 4m shares.
Engro Foods declined by Rs3.40 to Rs68.20 on 4m shares and Azgard Nine slipped by 8 paisa to Rs6.80 on 3m shares.
TDF to drive cement earnings: KARACHI, May 30: The cement companies are attempting to use tire derived fuel (TDF) as an alternative to coal in manufacturing as a means to improve margins.A report by analyst Yawar Uz Zaman at Investcapital stated that energy costs formed as much as 60 per cent of the totals of cost of cement production. Most of the country’s plants were based on coal technology and the prices of coal were prone to wild swings. They touched the peak of $138.50 per ton; though receding recently to $91.85 per ton.
“This volatile movement in coal prices disturbs manufacturer’s margins and some of the industry giants have started to consider implementing other affordable technology which has lower fluctuation than coal and is also environment-friendly,” the analyst says. He noted that the two biggest plants, Lucky and DG Khan had already introduced TDF at their plants. A comparable analysis of using coal verses shredded tires in cement manufacturing reveal the following: Taking coal price at $100 per ton, the conversion to TDF based technology would result in savings of Rs333 per ton or (Rs17 per bag), analyst calculated.
Currently, the average per ton cost of shredded tires is hovering around Rs9,054. However, in case of further decline in coal prices, there would be no benefit from plant conversion, the analyst argues.
He stated that Lucky Cement had completed 20 per cent conversion, which had resulted in annualised cost savings of Rs292 million.
At D.G. Cement, the TDF based fuel plant was currently in trial run and it would be operational in first half of financial year 2013. The successful conversion to TDF from coal was thought to enable the company to lock in Rs1.4 billion annually.
Going forward, TDF technology being less expensive and 25 per cent more efficient than coal, companies turning to the new technology could minimise energy costs. However, the industry-wise benefit was murky due to higher interest rate scenario,
which would block plans of many companies to convert their coal based plant to alternative fuels.

Hubco to payoff tax liability of Rs1.65bn: KARACHI, May 30: The Hub Power Company announced on Wednesday that the company had decided to payoff tax liability amounting to Rs1.65 billion that it was in dispute with the tax authorities.
Nauman Khan at brokerage Topline Securities recalls that the company was in dispute with the country’s tax authority regarding non-deduction of withholding tax at the time of issuance of shares to sponsors against project development cost incurred by them.
The tax department assessed a tax liability of Rs1.9b of which company had already deposited Rs297million in accordance with the departmental procedure. However, with long pending case since 1999, the assessed liability had grown to Rs3.25b accumulation of late payment penalty and interest charges.
Earlier in March this year, Islamabad High Court had dismissed a petition by Hubco against levy of that tax. The company has filed appeals before the Supreme Court.
“The management decision to pay depicts company’s prudent attitude towards resolving all the outstanding tax issues in an amicable manner rather than opting to take a course of confrontation that may affect shareholders as was happened recently when tax authority froze Hubco’s bank accounts,” says Nauman.
Nurali Barkatali, analyst at BMA Capital Management Ltd, commented that in deciding to clear the liability, Hubco was availing a tax benefit scheme launched by FBR through SRO 547 issued on May 22, 2012.
As per the SRO, exemption would be granted on whole of the amount, in respect of default surcharge and penalty for non-payment, if the defaulter pays actual tax dues by May 31, 2012.
The SRO further states that, in case refund becomes payable as a result of judgment of court after the issuance of the aforementioned notification, the tax deposited by that tax payer would be refunded.
Analysts concurred that after discussion with the company’s management, they were of the view that the one-time payment of Rs1.6 billion would not affect the financial earnings for year 2012, as the tax did not relate to the current fiscal year and
also because the company was still defending the case in the court. Yet, it represented cash outflow of Rs1.6b that could affect company’s dividend payout in the coming quarters. Nauman stated that he expected the earning per share of Rs5.9 in financial year 2012. The company could pay final cash dividend of Rs3 per share (Rs3 interim already paid) by borrowings.

The directors may, however, opt to reduce the dividend looking at the cash outflow due to tax payment. Nurali at BMA stated that on Tuesday’s closing price of the stock at Rs40.49 per share, Hubco offered a FY13 dividend yield of 15 per cent which was 150bps above recent cut-off of the 10-year Pakistan Inves-tment Bond.

Company news: KARACHI, May 30: Pakistan International Airlines (PIA) has reduced the total number of departments from 12 to seven after reorganisation to improve functioning of the national carrier, a press release said.
KARACHI: Etisalat will deploy international social responsibility and sustainability reporting standards including Global Reporting Initiative (GRI) and ISO 26000 across Asia, the Middle East and Africa.
KARACHI: Pakistan Mercantile Exchange (PMEX) held a workshop in Lahore and Islamabad for its brokers and investors. The workshops are part of a series of trainings   for investors interested in trading commodities  on PMEX.
KARACHI: Stakeholders at ‘Strategizing for resilience against disasters — a microfinance dialogue’, organised by Pakistan Poverty Alleviation Fund, stressed the need for developing a viable framework for microfinance sector to protect the vulnerable from the disastrous effects of natural catastrophes, says a press release.


Tuesday, 29 May 2012


KARACHI STOCK EXCHANGE-DAILY MARKET TREND: STOCK MARKET UPDATE: 30.05.2012: STOCK: Karachi Stocks Down 14.69 Points: KARACHI, May 30: The KSE-100 index was at 14057.16, down 14.69 points. (today 11.20am)...



Karachi Stocks Down 14.69 Points:
KARACHI, May 30: The KSE-100 index was at 14057.16, down 14.69 points. (today 11.20am)

May 30, 2012

Unilever Pak
Rs 139.05
Indus Motor Co
Rs (8.66)
Nestle Pakistan
Rs 102.14
Philip Morris
Rs (7.93)
Unilever Food
Rs 47.50
Colgate Palmolive
Rs (5.48)
Wyth Pak Limited
Rs 28.62
Linde Pak
Rs (2.83)
Mithchells Fruit
Rs 14.33
Hinopak Motor
Rs (2.59)

Karachi Stocks add 40 points to overnight gains
KARACHI, May 29: Bulls again ruled the roost at the Karachi Stock Exchange on Tuesday, where shares seemed to be in demand, ahead of the budget.
Extending the earlier day’s trend, the stocks started on a firm ground and moved up to add more than 100 points to the KSE-100 index before retreating at the end of the day to a gain of 40.34 points, settling at 14,071.85 points.
Market experts said that the redeeming factor was investors’ gradual interest in big-cap stocks.
Dealers said that the stocks were captivating the interests of institutions and foreign investors.
The figures released by the National Clearing Company of Pakistan in the evening showed overseas investors offloading stock holdings worth of $7.87 million on Tuesday.
Local companies and mutual funds also opted out of shares. However, all of that was absorbed by the banks, which mopped up equity worth $9.51 million.
Among the regular commentators, Samar Iqbal, equity dealer at Topline Securities, said that the market had failed to sustain the rally after pressure on Pakistani currency. Investors preferred to book gains at upper level after realising that local currency was posting record lows against the US dollar.
Hasnain Asghar Ali at Invisor Securities stated that in the absence of follow-up support and investors lining up to sell, the rally could not sustain. Accumulation in selective stocks, mainly from energy and fertiliser sector averted the fall. The bourse had to succumb to the technical call, thereby disallowing the high, attained during early trade to sustain.
While the market participants awaiting the federal budget expected to carry equity market revival ingredients, including amnesty and change in CGT collection authority, the economic and financial grievances along with fast depleting value of local currency besides inviting speculators interest from other investment instruments added to the nervousness, thus depicting cautious stance, said the analyst. Some of the budgetary leaks to which investors believed in varying degrees included:
Expected shortfall of Rs2 to Rs4 billion in proposed revenue collection target of Rs2,338 billion for the next fiscal 2012-13.

The government is likely to reduce turnover tax from one per cent to 0.5 per cent in budget to provide relief to business community. The projection of 6.85 per cent fiscal deficit for the outgoing fiscal year likely to stay higher following the inability of the provinces to generate a surplus of Rs124 billion estimated in the budget and the shortfall of 71 per cent in foreign inflows from the budgetary estimates of $4.5 billion for current fiscal.
The KSE-30 index added only 4.15 points to close at 12,243.28 points. Among the total 384 actives, 177 ended in the green territory, 147 in red and 60 stayed unchanged. Turnover dropped by 21 million shares to 160 million shares from 181 million shares on Monday.
Traded value, however, increased by a minor Rs110 million to Rs5.835 billion and market capitalisation rose by Rs10 billion to Rs3.601 trillion. Among lead gainers were UniLever Pak up by Rs139.05 to Rs7,239.18 and Nestle Pakistan higher by Rs102.14 to Rs3,928.57.
The major declining scrips were Indus Motor Company down by Rs8.66 to Rs282.34 and Philip Morris Pak giving up Rs7.93 to Rs153.12.On the active list, Jah Sidd Co added 11 paisa to Rs16.25 on 12m shares. BankIslami Pakistan pushed ahead by 43 paisa to Rs12.04 on 9m shares, D.G. Khan Cement lost 76 paisa to Rs43.14 on 9m shares, Engro Corporation continued to climb with gain of another Rs3.95 to Rs113.70 on 8m shares. Lotte PakPTA edged higher by 9 paisa to Rs8.49 on 7m shares, Hub Power Company declined by 51 paisa to Rs40.49 on 7m shares, Fatima Fertiliser retreated by 7 paisa to Rs24.79 on 7m shares, NIB Bank added 14 paisa to Rs2.30 on 6m shares, National Bank shed Rs1.11 to Rs46.15 on 6m shares and Kot Addu Power gained Rs1.65 to Rs45.45 on 5m shares.
Pakistani stocks rise despite investors opting for profits
KARACHI: Pakistan stocks closed higher on Tuesday but gains were limited as investors chose to take profits, concerned about the rupee hitting a record low against the dollar, dealers said.
The Karachi Stock Exchange (KSE) benchmark 100-share index rose 0.29 per cent, or 40.34 points, to 14,071.l85 points on volume of 120.87 million shares, compared to Monday’s close of 14,031.51.
The KSE hit a high of 14,168.49 points during the day.
“Investors preferred to book gains at upper levels after realising that the local currency is posting record lows,” said Samar Iqbal, a dealer at Topline Securities.
Facilitating shareholders’ voting at AGMs
KARACHI, May 29: The apex regulator, Securities and Exchange Commission of Pakistan (SECP) proposes to initiate the concept of e-voting, which envisages a change from the current voter presence in person or by proxy to vote at the Annual General Meetings (AGMs) of companies.
A communiqué by the SECP posted on the KSE-website on Tuesday stated that it was to facilitate the shareholders and benefit from automation in the capital market, that the introduction of e-voting was being considered.
In this context, a concept paper has been prepared by the Central Depository Company of Pakistan Limited (CDC).“The proposed e-voting would essentially be an internet based platform that will enable the shareholders to vote on resolutions proposed by companies without being physically present at the meeting,” the SECP explained.
The chief regulator has invited views/comments on the concept paper by June 11, 2012.
The concept paper lists the benefits of e-voting, which include: The implementation of e-voting system would make it possible to monitor the whole voting system in a timely manner; transparency and efficiency will be achieved from e-voting, record keeping, with respect to each voter will be very easy and accurate; results of e-voting will be available immediately after e-voting with 100 per cent accuracy.
As for shareholders, the need for their physical presence or proxy dependency will be substituted with the ease of voting from anywhere and the casting of invalid votes would be minimised.
The concept paper mentions that e-voting system has been developed and implemented worldwide, by various depositories, for achieving efficiency in the voting process involved in company AGMs.
“This process, while it may not completely replace the process of physical voting, does, however, provide another channel for shareholders to exercise their right.”
It results in the increase of overall percentage of voting due to this facility.
At the same time, this process adds a lot of efficiency and transparency in the overall voting process, the concept paper says.
The drawbacks in currently prevalent system, which the e-voting seeks to solve include: In the current voting system, shareholders are required to be present physically at the meeting place to exercise their voting rights.
Due to this limitation of current voting system, it becomes impossible for an investor to participate if he has invested in multiple securities and some of them conduct their AGMs at the same date.
Secondly, from the point of view of minority shareholders it is not always feasible to travel to meeting place, especially where investor is not the part of urban population or meeting place is out of his native city.
Due to this limitation, the current voting system has a low response of just around 10-15 per cent.