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Monday, 10 September 2012

STOCK MARKET UPDATE: 11.09.2012



STOCK:
Karachi Stocks Up 22.73 Points:
KARACHI, Sept 11: The KSE-100 index was at 15262.92, up 22.73 points.(today 11.33 am)

September 10, 2012
5 TOP GAINERS  &  LOOSERS:

Nestle Pakistan
Rs 175.00
Service Industries
Rs (8.09)
Pak Gum & Chemical
Rs 5.45
Shield Corp
Rs (7.68)
Indus Dyeing
Rs 4.30
Al-Ghazi Tractor
Rs (5.00)
Gatron Industries
Rs 4.03
Mitchells Fruit
Rs (4.00)
EFU Life Assurance
Rs 3.86
MCB Bank
Rs (3.94)
KSE approaches MSCI for upgrading status
KARACHI, Sept 10: Karachi Stock Exchange met with Morgan Stanley Capital International (MSCI), a leading provider of market indices across the world, at its office in London to persuade it to upgrade Pakistan’s capital markets status from frontier to emerging markets.
The KSE delegation was led by Munir Kamal, Chairman, and included Nadeem Naqvi, Managing Director, Muhammad Hanif Jhakura, KSE, Chief Executive Officer, Central Depository Company of Pakistan and Haroon Askari, Deputy Managing Director, KSE and other market participants.
Delegation updated MSCI on the demutualization of the three stock exchanges in Pakistan, structural changes and comprehensive reforms in regulatory framework, risk management and operations of the exchange.
KSE delegation also highlighted underlying signs of economic stabilization in Pakistan, change in monetary policy stance, and centralization of capital gain tax at National Clearing Company of Pakistan.
MSCI officials appreciated the comprehensive macro market and institutional capacity update presented to them and said that these factors will be kept in mind when the next review is due, and if there are any additional aspects that they need to understand, they will contact KSE.
At the same time, MSCI highlighted they have a responsibility toward providing an objective assessment regarding sustainably of market reforms and institutional capacity to end users of MSCI indices.—PPI
Telecoms green-signal KSE hike
KARACHI: Local stocks ended higher on Friday, driven by a strong performance in the telecommunications sector, traders said.
The Karachi Stock Exchange (KSE) benchmark 100-share index closed 0.43 percent, or 65.42 points, higher at 15,253.95, on total volume of 227.19 million shares.
"Once again, volume skewed towards the telecommunications sector as it contributed over 45 percent of the volume traded," said a dealer. (Reuters)
KSE: Uncertainty takes toll on stocks
KARACHI, Sept 10: The KSE-100 index fell by 13.77 points in a directionless trading on Monday to close at 15,240.19 points.
Uncertainty over the political and economic situations kept the underlying tone cautious. Most investors remained sidelined and those with heavy portfolio decided to book gains.
The volatility on the political front, with signs that the PM on his first appearance before the Supreme Court on September 27 might decline to write to the Swiss authorities, were disconcerting as the government-judiciary tussle was thought to intensify.
Political commentators said that the country was entering a historic election cycle with key vulnerabilities growing within the economy. The foreign exchange reserves were being closely watched for their depletion.
During the trading session, reports reaching the market that SBP had reduced export refinance rates by 150bps to 9 per cent had little impact on the big beneficiary, the textile sector.
Foreigners bought equity worth $0.68 million on Monday, but individuals were the most aggressive buyers with net buy of $3,86 million. Other institutional investors including companies, banks, mutual funds and ‘other organisations’ went into profit taking.
The news bag had nothing exciting on the economic front. The government on Sunday increased the price of petroleum products, effective from Monday. Yet, the biggest oil marketing company, PSO shares barely moved.
The government borrowing from the country’s scheduled banks rose Rs44 billion to Rs188 billion in the first two months of 2012-13, compared with the same period last year, according to State Bank of Pakistan.
Ahsan Mehanti at Arif Habib Corp stated that stocks closed lower post major corporate earning announcements. Concerns for circular debt in the energy sector, slowdown in cement sector dispatches and uncertainty in global stocks and commodities on
stimulus hopes affected the investor sentiments.

Equity dealer Samar Iqbal at Topline Securities said that the market remained range bound on the first day of the week as investors remained cautious with increase of political noise. Above expectation DGK Cement’s June result also failed to boost investors’ confidence. Major activity remained skewed towards bottom tier scrips with KESC the highest traded scrip.
Hasnain Asghar Ali, COO at Escorts Capital stated that the session saw across the board profit taking, which was attributed to the torrential rains and relatively volatile political situation. Accumulation in E&P stocks, however, restricted any major fall in the index. Cement stocks however took severe beating that could be on account of technical reshuffle.
PTCL is scheduled to announce annual results on Tuesday, yet the development on ICH sent the stock down by almost 5
per cent.

Among the 316 active issues, 169 ended in the negative territory; 122 in positive and 25 remained unchanged. Volume declined to 208 million shares, from 230 million shares traded last Friday, with the trading value also down to Rs4.914 billion, from Rs4.936 billion. Market capitalisation was lower at Rs3.885 trillion, from Rs3.889 trillion.
The volume leaders saw KESC gain the day’s maximum of Re1 to Rs7.45 on 24m shares. It was followed by PTCL which fell by almost the day’s limit down by 96 paisa to Rs19.61 on 19m shares; JS Bank gained 44 paisa to Rs6.20 on 16m shares, SSGC was up 5 paisa to Rs22.43 on 14m shares; DGK Cement shed 78 paisa to Rs48.75 on 11m shares as some investors were expecting the company to announce a bonus with the cash dividend on Monday.
Telecard Limited was down 13 paisa to Rs3.32 on 10m shares; Pace (Pak) added 28 paisa to Rs3.46 on 8m shares, Jah Sidd Co was up 26 paisa to Rs14.07 on 8m shares, WorldCall Telecom slid 6 paisa to Rs3.18 on 7m shares and Engro Corporation after initial gains, lost 1.81 by the close of trade to Rs108.09 on 5m shares.
ISE rejects SECP’s merger proposal
ISLAMABAD, Sept 10: The management of Islamabad Stock Exchange (ISE) has expressed its reservation regarding a merger proposal with Lahore Stock Exchange (LSE) that was floated by the Securities and Exchange Commission of Pakistan (SECP).
The ISE management maintained that establishing a single trading platform by the two stock exchanges would not be a success story. However, it favoured integration with the Karachi Stock Exchange (KSE), stating that smaller stock exchanges would benefit from higher trading there.
“In this regard, the integration of all three exchanges would be better option in view of the peculiar circumstances and small scale of economy in the country,” ISE MD Mian Ayaz Afzal said in a statement.
He added that the securities market would flourish with rapid pace if this mode is adopted in Pakistan. “Therefore ISE forces the integration of all the three exchanges of the country to form a National Market System (MNS) instead of integration with a single bourse.”
Meanwhile, an ISE official said that both ISE and LSE have limited volumes and their merger would not be able to achieve anything significant.“As a matter of fact, the ISE is better placed to attract strategic investor alone due to higher asset value and better placement of operational area,” the ISE member said.
The idea of merger between ISE and the LSE in the first phase was floated by the SECP chairman who said that it would support attract strategic investor for the demutualised stock exchanges.
Responding to the suggestion, the higher management of LSE said that in order to merge LSE and ISE and create a competitive challenge to KSE, SECP needs to implement the best price discovery and execution standards by ordering the establishment of the National Market System.
The National Market System is required as brokers of all exchanges do not establish the best price of the scrips.
MD LSE Aftab Ahmad Chaudhry had recently supported the idea of establishing a united trading platforms of all exchanges instead of having the smaller exchanges merged.
“When all exchanges are merged then all orders would be executed from the centralised liquidity pool which would mean that no investor in Pakistan would get inferior pricing for his trading orders,” he said.
However, the management of both Lahore and Islamabad stock exchanges supports the demutualisation process on the grounds that it would enhance governance and transparency at the stock exchanges and enhance the competition among the
brokerage houses which ultimately improve the performance of the stock market.

Company news:
JS BANK LTD.:HSBC to sell Pakistan operations: LONDON, Sept 10: Banking giant HSBC on Monday said it had agreed to sell its operations in Pakistan comprising 10 branches to JS Bank Limited for an undisclosed sum.
The British lender said the sale, which it expects to complete in the final quarter of the year, represented further progress in its strategy to shed non-core assets to slash group costs.
“HSBC Bank Middle East Limited (HBME), an indirect wholly-owned subsidiary of HSBC Holdings plc, has entered into an agreement to sell its banking business in Pakistan to JS Bank Limited,” it said in a statement.
“The transaction, which is subject to regulatory approval and the approval of the direct shareholders in HBME and JS Bank Limited, is expected to complete in the final quarter of 2012.
“It represents further progress in the execution of the HSBC Group strategy.”
HSBC said that as of June 30, the bank’s Pakistan business had gross assets of about $635 million.AFP

MOHAMMED SALEEM MANSOORI

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