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Tuesday, 31 July 2012

STOCK MARKET UPDATE: 01.08.2012



STOCK:
Karachi Stocks  Down  16.79 Points:
KARACHI, Aug 01: The KSE-100 index was at 14560.21, Down 16.79 points. (today 10.25 am)

July 31, 2012
5 TOP GAINERS  &  LOOSERS:

UniLever Food
Rs 141.25
Abbot Lab
Rs (4.22)
Colgate Palmolive
Rs 56.76
JDW Sugar
Rs (4.05)
Siemens Pak
Rs 34.40
Millat Tractors
Rs (3.84)
UniLever Pak
Rs 27.00
Engro Corp
Rs (2.31)
Michells Fruit
Rs 16.54
Clariant Pak
Rs (2.14)

Karachi Stocks Up 65 points on foreign buying
KARACHI, July 31: There was a burst of activity on the Karachi stock market on Tuesday, which pushed the KSE-100 index up by 65.46 points to close at 14,577 points. It was a refreshing change from several days of dismal trading within a narrow range and largely a flat closing.
But the trading seemed to be in select stocks as investors considered caution better part of valour. The upswing in benchmark was triggered by the heavyweight OGDC, which initially lifted the index up by around 40 points by sizeable gains, though the stock withdrew by the end of trading.
A reason that rejuvenated buying interest was the near-term possibility of receipt of the stalled $1.12 billion from the US in Coalition Support Fund. The pleasant surprise on Tuesday was also the heavy net purchase of $2.02 million worth equity by foreign investors.
Local institutional investors also went into buying, albeit in small amounts. Individual stock holders however sold $2.49 million worth shares.
Ahsan Mehanti at Arif Habib Corp commented that stocks closed higher amid institutional interest in oversold market. Investors took positions in shares across the board on hopes for release of $1.12 billion payment from the US.
Strong earnings outlook from upcoming results, record earning announcement by Fauji Fertiliser and renewed foreign interest in blue chip stocks played a catalyst role in bullish sentiments in stocks at KSE despite concerns for macroeconomic conditions and uncertain global markets.
Hasnain Asghar Ali, COO at Escorts Capital, stated that in spite of the hues and cries on economic financial and power supply concerns that had kept the turnover on lower side, the presence of renewed buyers on marginal declines kept the benchmark in a consolidation phase.
Low quantum gains in index-heavyweights mainly from E&P sector, kept the index in green zone. Closing at improved rates on the last session of the month was encouraging.
Front line banking stocks mainly on earnings sensation succeeded in inviting accumulation, mainly from local corporate circuits thus allowing the index to touch 14,600 psychological levels. The other volume leaders, mainly from cement sector, stayed in red zone, but managed to invite buyers on intervals.
Various stocks having the potential of trading at improved levels were in for speculative and volumetric activity and maintain gains mainly on corporate announcements. Fertiliser stocks were up on substantial increase in the urea off-take.
However various companies were believed to be struggling to report improved sales, due to gas supply cuts and inventory mismanagement.
Such companies invited renewed selling, while stock swapping stayed prominent.
The KSE-30 index rose by 39.79 points to 12,607.26 points. Turnover improved by 5 per cent in terms of volume of shares traded to 78 million shares, from 82 million shares the earlier day. Trading value on the other hand saw nominal 2 per cent decrease to Rs3.076 billion on Tuesday, from Rs3.152 billion the previous day.
Market capitalisation witnessed addition of Rs17 billion to Rs3.724 trillion, from Rs3.707 trillion on Monday. In a total of 284 stocks that came up for trading, 158 were gainers, 100 losers and 26 remained unchanged.
On the active list, Arif Habib Corp recorded the highest turnover of 10m shares, down by 70 paisa to Rs33.00. Bank Alfalah stood at second place with trading in 6m shares, which slipped 8 paisa to Rs18.81.
D.G. Khan Cement gave up 11 paisa to Rs46.21 on 6m shares. NBP gained 91 paisa to Rs46.61 on 5m shares, Fauji Cement climbed 21 paisa to Rs6.15 on 5m shares, Jah Sidd Co declined by 52 paisa to Rs15.34 on 4m shares and Engro Foods gathered 67 paisa to Rs70.84 on 4m shares.
PTCL added 13 paisa to Rs14 on 3m shares, Maple Leaf Cement shed 16 paisa to Rs6.36 on 3m shares and Engro Corporation plunged by Rs2.23 to Rs93.81 on 2m shares.

Company News:
1) PSO may stop supply to defaulters: ISLAMABAD: At a time when PSO is entering into agreements with local and international firms to establish refineries and shipping lines to secure savings and expand business, over Rs243 billion worth of its receivables could disrupt the entire energy supply chain in a matter of days.
This was the crux of a testimony by prime minister’s adviser on petroleum Dr Asim Hussain, secretary petroleum Dr Waqar Masood Khan and PSO managing director Naeem Yahya Mir before the Senate standing committee on petroleum and natural resources, led by Senator Mohammad Yousaf.
“Stop oil supplies to all those who don’t pay”, said a member of the committee and was supported by others.
Dr Asim Hussain agreed to obey immediately if the committee formally issued a directive, but warned that the committee could not afford sustaining pressure that would follow.
Senator Abdul Nabi Bangash alleged that among the fuel defaulters Karachi Electric Supply Company stood on top among the private sector with Rs80 billion worth of payables.
He said the privatised utility had to pay Rs40 billion to the SSGC and Rs40 billion to power system but wondered why the government was not penalising it; and if that was the situation, why the entity was privatised.
He said it was strange that the KESC had to pay Rs80 billion to government entities and its chief executive was drawing Rs6 million salary but its performance was not improving. Senator Jehangir Badar proposed that if privatised entities could not clear their dues, the government should purchase them and pay off their dues.
PSO’s managing director Naeem Yahya Mir said his company and Kuwait Petroleum have finalised a $350 million joint venture project for infrastructure development at Hub to improve storage capacity in the country. He said the agreement would be signed shortly.He said PSO also plans to establish a regional joint venture aviation company in Middle East with the help of PNSC.
“PSO will procure two big ships to import crude oil,” he said, adding Pakistan was facing huge cost on account of import of crude oil through small ships.
He said that the Port Qasim was congested and blockade of one ship at the port could freeze whole supply in Pakistan. That would also provide alternate oil supplies rather than relying only on ports in Karachi.
Simultaneously, the PSO was working on setting up of a refinery in Khyber Pakhtunkhwa to process locally produced crude oil.
“We will also be able to export oil to Afghanistan from the refinery planned in KPK,” he said, adding that oil marketing companies of the world had entered into refining business to make money and so PSO wants to follow that model to improve profits.
Mir said that circular debt had chocked oil supplies of the company.
“We have no more capacity to arrange fuel due to circular debt issue,” he said, adding that PSO receivables had reached Rs243 billion.
Giving details, he said power sector was to pay Rs228.7 billion while PSO had to pay Rs93.3 billion to refineries. “PSO is facing net deficit of Rs149.9 billion”, he said and disclosed that PSO had exhausted its credit limit and banks were not willing to extend more financing.
Adviser to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said that power sector was producing thermal power that was resulting in higher generation costs which when not recovered from consumers was adding up to the circular debt.
The Finance Ministry cannot clear the amount of subsidy and it is the reason of circular debt, he explained adding that a meeting of Finance and Water and Power Ministries be convened to resolve the issue of circular debt.
Petroleum Secretary Dr Waqar Masood said that President Asif Ali Zardari had been informed that it would not be possible to run the system for long due to circular debt issue.
He said that the government was giving over Rs3 per unit subsidy that was creating problems.
“PSO and OGDCL are facing the whole burden of circular debt,” he added.
He said that private sector and government departments, including provinces, were responsible for circular debt issue as they were not paying power bills.
He said even the increase in power tariff would not solve the problems and circular debt unless mismanagement and inefficiencies in the power sector were rooted out.
He said the power sector was allowed 16 per cent losses in tariff but its actual losses were about 19-20 per cent.
The members of the committee expressed concern over the issue of circular debt and criticised the government for failing to resolve it. They expressed concerns over KESC’s performance and termed it a white elephant.
MOHAMMED SALEEM MANSOORI

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