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Monday, 23 July 2012

STOCK MARKET UPDATE: 24.07.2012


STOCK:

Karachi Stocks Down 34.16 Points:
KARACHI, July 24: The KSE-100 index was at 14493.09, down 34.16 points. (today  10.54 am) 


July 23, 2012
5 TOP GAINERS  &  LOOSERS:

Rafhan Maize
Rs 168.26
National Foods
Rs (10.05)
Unilever Pak
Rs 59.02
ICI Pakistan
Rs (7.82)
Philip Morris
Rs 3.32
Clariant Pak
Rs (5.17)
Shataj Sugar Mills
Rs 3.17
Gatron Ind.
Rs (4.66)
Akzo Nobel Pak
Rs 3.08
Hinopak Motors
Rs (3.63)
KSE 100-index slips 37 points
KARACHI, July 23: Lethargy prevailed on the Karachi Stock market on Monday, the first trading session in the holy month of Ramazan.
The KSE-100 index slipped 37.24 points at 14,527.25 points.
The absence of traders and investors led to the trading value that fell below the Rs1 billion mark at Rs935 million. In terms of shares, the volume plunged to 28 million shares, about a tenth of the business on an ordinary trading day some time ago.
A trader said that contributing reason in the low turnover was the shortened trading time during the holy month.
Foreign investors were net buyers of $0.17 million worth stock. Among other group of investor, corporates, banks, mutual funds, individuals and other organisations bought or sold equities in the net value of less than $1 million, each.
Almost nothing went well for the investors. The screaming headlines in morning paper: “Greece in Great depression” and its reverberations noticed in the falling global commodity and equities market was unhelpful for investors to take fresh positions.
But given the comparative low volatility with the gap of only 72 points between the index high at 14,579 points and low at 14,507 points, showed that investors did not go into a selling spree.
Also market stayed above the psychological level of 14,500 points.
Most market participants were thought to be holding on to the blue chip scrips of companies about to announce quarterly results.
“Market consensus view is that handsome payouts may be distributed by companies in some of the recently active sectors,” a trader said.
Ahsan Mehanti at Arif Habib Corporation stated that the stocks closed bearish amid institutional profit-taking across the board on concerns over unrest in the city and fall in global stocks on eurozone debt crises.
Trade remained thin in the short session at KSE ahead of major corporate earning announcements due this week. Investors were also thought to have remained cautious ahead of Supreme Court reaction on contempt case.
Concerns were also being expressed regarding the country’s macroeconomic instability.
Hasnain Asghar Ali, COO Escorts Capital, said that trading value of stocks that failed to hit even Rs1 billion mark, added to the misery of the roll-over participants, thus pushing the benchmark and major frontline stocks in for adjustment.
“However, renewed accumulation in selective stocks allowed the benchmark to honor technical support,” said the analyst, adding that market participants awaited things to settle on the major fronts, such as judicial hearings and others that had the potential of creating high volatility on political front.
Triggers either from the current results reporting season or on economic front were believed to allow low multiples to keep the benchmark afloat.
Turnover dipped 70 per cent to 28 million shares on Monday, from 96 million shares traded last Friday.
Trading value also slumped by 70 per cent to Rs935 million, from Rs3.155 billion. Market capitalisation decreased by Rs10 billion to Rs3.707 trillion on Monday, from Rs3.717 trillion last Friday.
Among the 223 active stocks, 70 were gainers which came to almost half the losers at 128 with another 25 scrips remaining unchanged.
On the top 10 volume leaders, Jah Sidd Co with a comparatively low turnover of 5m shares declined by 46 paisa to Rs15.02. Fauji Fertiliser on turnover of 2m shares, climbed by Rs1.11 to Rs118.16 on expectations of splendid results and payout.
Descon Oxychem was up by 38 paisa to Rs4.34 on 1m shares, Nishat Mills fell 33 paisa to Rs52.22 on 1m shares, D.G. Khan Cement lost 20 paisa to Rs44.78 on 1m shares, NIB Bank added 3 paisa to Rs2.30 on 0.9m shares and Azgard Nine slid two paisa to Rs6.56 on 0.9 shares.
Fatima Fertiliser declined by 17 paisa to Rs24.71 on 0.8m shares, Cherat Cement declined by 41 paisa to Rs34.96 on 0.7m shares and National Bank of Pakistan was down 24 paisa to Rs45.15 on 0.6m shares.


SECP nominates six directors on bourses’ boards
ISLAMABAD: The Securities and Exchange Commission has approved a number of documents, including the names of six SECP-nominated directors on each stock exchange to act as the first directors, for the demutualisation of the country’s three stock exchanges.
The Stock Exchanges (Corporatisation, Demutualisation and Integration) Act 2012, which was promulgated on May 7, 2012, provides a framework for the corporatisation, demutualisation and integration of the stock exchanges.
Under this act, new nominee directors are to be incorporated in the stock markets and the Commission sent the final names to the respective stock exchanges.
For the Lahore Stock Exchange, SECP nominated Mujeeb Ahmed, Masood Afzal and Aftab Mehmood Butt.
A LSE official said that Mr Butt was also tipped to be the next chairman of the exchange following the resignation of Aftab Ahmed Khan.
Shahid Gulzar, a Chartered Accountant, and Malik Qamar Afzal, an advocate, have been nominated as directors for Islamabad Stock Exchange (ISE).
For the country’s main stock exchange, Karachi Stock Exchange, tax expert Shabbar Zaidi and former bureaucrat Kamal Asfar have been nominated.
SECP sources said the directors had been nominated based on their qualifications and how that would help with the process of demutualisation.
“Baskets containing experts from various fields have been created so that the stock exchanges do not have to rely on external consultants to meet the demutualisation requirements,” the SECP official said.
Apart from the names of directors, the SECP has also approved the documents submitted by the stocks exchanges which include revaluation of assets and liabilities of the stock exchanges, plans for the segregation of commercial and regulatory functions and memorandums and articles of association of the exchanges.
The SECP has also approved the authorised and paid-up capital of the exchanges with the number of shares to be issued, names of initial shareholders of the exchanges and the number and value of shares to be allotted to each member.
The detailed five-year development plans, together with the capital expenditure estimate and sources of finance along with SECP’s observations on the same in the interest of the market, have also been approved.
The stock exchanges will now have to take action on the approved documents by August 20, 2012.
These actions include getting the relevant approvals from the members, allot shares to initial shareholders in the approved numbers, deposit 60 percent shares in ‘blocked account’, issue certificates to initial shareholders certifying their number of shares in ‘Block Account’ and issue trading rights (TRE certificate) to each initial shareholder.
The date for the implementation of demutualisation Act is September 3, 2012 and it is expected to bring the country’s capital market at par with other international jurisdictions and also result in enhanced governance and transparency.
Further more, it is expected to attract strategic investors which will not only provide equity and technical expertise but will also result in increased visibility of these exchanges on international capital market forums.


Company news:
1) MCB: KARACHI: MCB Bank for the 9th time has been named “Best Bank in Pakistan” by the Euromoney, a highly respected UK based magazine, for the bank’s impressive performance and growth in the year.—APP
2) Mutual funds grow 51pc to Rs379bn: KARACHI, July 23: Assets under management of mutual fund industry galvanised by 51 per cent during the financial year 2012 to touch Rs379 billion. The growth was twice the 25 per cent witnessed in FY11 over the year before.
Income Funds received the largest investor savings to show a jump of 124 per cent over the previous year. It was followed by money market fund up 95 per cent; Islamic income fund 43 per cent and Islamic money market fund 22 per cent over the earlier year.
A report prepared by Mazhar A. Sabir at brokerage InvestCap showed that the performance during the first quarter financial year 2012 stood relatively depressed, evidencing a decline of 1.2 per cent during July-Sept 2011. However, the later three quarters of FY12 witnessed robust growth of average 15 per cent quarter-on-quarter (QoQ) of FY12.
However on monthly basis, the industry revealed a drop of three per cent in June 2012 to Rs379 billion, over the earlier month’s Rs390 billion.
During FY12, the fixed income funds category of open-ended funds registered an appreciation of a massive 124 per cent YoY to reach Rs87 billion and contributed 24 per cent to the total open-ended size of the industry as compared to 17 per cent contribution witnessed in FY11.
Money Market funds revealed consistency in growth at 95 per cent, about the same as the earlier two year’s growth at 100 per cent YoY.
With the induction of two new money market funds, the net assets of the category reached Rs150 billion in June 2012, as compared to the June 2011 size of Rs77 billion.
Money market funds, therefore, stood out as the largest category in the mutual funds industry. “The reason for the phenomenal growth in money market funds was the investor’s general preference for low risk better return product,” said the analyst.
However, due to redemption effect of year end, the category size decline by 7 per cent in June over the same month last year. During FY12, the money market funds category earned average return of 11.2 per cent YoY.
“Since the SBP has kept the discount rate at existing levels since October 2011, the money market funds managers are shifting their investment in six-month papers and getting better returns from their investments in treasury Bills,” the analyst said.
The Equity Funds category remained stagnant over the FY11 level of Rs252 billion. The benchmark KSE-100 index gained 10.4 per cent YoY from 12,496 points levels in Jun-11 to close at 13,801 points in Jun-12.
The equity funds category posted an average return of 13.5 per cent YoY, outperforming the KSE 100-index by 320bps over the year.

MOHAMMED SALEEM MANSOORI


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