STOCK MARKET UPDATE: 14.12.2012

STOCKS

Karachi Stocks Up 71.36 Points:
KARACHI, Dec 13: At the close of trading, the KSE-100 index was at 16815.96, up 71.36 points.

(Today Market is 24.05Up@ 11.27am)

December 13, 2012

 5 TOP GAINERS  &  LOOSERS:

Unilever Pak	Rs 100.17	Bata Pak	Rs (60.00)
Pak Int Con SD	Rs 12.48	Island Tex	Rs (16.85)
Al-Ghazi Tractor	Rs 11.10	Bhanero Tex	Rs (13.52)
Siemens Pakistan	Rs 9.20	Mithchells Fruit	Rs (12.50)
National Foods	Rs 8.11	Pak Services	Rs (8.88)

Stocks extend overnight gains

KARACHI, Dec 13: Share values continued to rise at the Karachi Stock Exchange with the KSE-100 index climbing higher by 61.98 points on Thursday to close at 16,806.58.
On a relatively lower turnover, the gaining issues at 210 outnumbered the losing ones by a wide margin; the losers were 122. A surge in foreign buying was one of the major reasons for the interest in main board items.
Foreign portfolio inflow on Thursday amounted to $3.44 million. Local players generally showed subdued activity with banks, companies, mutual funds and individuals, all on the sell side in varying but smaller amounts.
Turnover increased to 119 million shares on Thursday, from 113 million shares traded the previous day. Trading value improved to Rs3.314 billion, from Rs3.242 billion and market capitalisation amounted to Rs4.221 trillion. The market capitalization-based KSE 30-index gained 53.41 points and closed at 13603.64 points.
Hasnain Asghar Ali at Escorts Capital observed that better numbers on trade deficits, transporters’ strike coming to an end and issue of notification restricting the import of automobile older than three years resolved certain issues hurting the confidence of various manufacturers and suppliers, thus making values of the relevant stocks more attractive.
The momentum thus remained positive, while renewed buying interest allowed index to continue consolidation. The analyst said that assumption of technical fall due to low volumes and depressed activity was belied.
Frontline stocks from cement and banking sectors along with singled out fertiliser and textile stocks led the gains on accumulation by the liquid participants, mainly on perception of consistency in growth and payouts. Low multiples also led to buying in some scrips though on restricted volumes.
Equity dealer, Samar Iqbal at Topline Securities said that improvement was seen in equity market amid hope that policy rate would be reduced in the monetary policy to be announced on Friday. PTC remained in limelight amid speculation that the international call rate case could be withdrawn.
However, overall volumes remained dull due to year end.
Ahsan Mehanti at Arif Habib Corp commented that stocks closed bullish with investor interest across the board on speculations for rate cut in SBP policy announcement.
Further, shrinkage in trade deficit by 9.93 per cent in five months to Nov 2012, SRO resolution of used car policy for auto sector, higher home remittances, expectations for release of $600 million US Coalition Support Fund (CSF), rising global stocks, higher cement sales data and rising fertilizer sector off take played a catalyst role in bullish sentiments at KSE.
The biggest gains were noted in Unilever Pak, up by Rs100.17 to Rs10,000.48. It was followed by Pakistan International Container Terminal up by Rs12.48 to Rs264.20. On the declining side, Bata (Pak) lost the biggest sum of Rs60 to Rs1470 and Island Textile was down by Rs16.85 to Rs1,108.15.
On the ten-top active list, PTCL saw the highest volume of 11m shares, up by 24 paisa to Rs17.32. Byco Petroleum rose by 50 paisa to Rs11.42 on 9m shares; Maple Leaf Cement added 28 paisa to Rs14.12 on 8m shares; Lotte PakPTA with turnover of 6m shares shed two paisa to Rs17.83; KESC was down by 24 paisa to Rs6.31 on 4m shares.
D.G. Khan saw business in 4m shares, up by 83 paisa to Rs 54.24; Nishat (Chunian) jumped by Rs1.71 to Rs 35.99 on 4m shares; Jah Sidd Co added 26 paisa to Rs17.35 on 4m shares; Fauji Cement edged higher by 4 paisa to Rs6.55 on 3m shares and Telecard Limited was up by 14 paisa to Rs2.59 on 3m shares.
KSE draws strength for rate-cut hopes: KARACHI: Equities in the local capital market rose on Thursday, supported by expectations that the central bank will ease interest rates at its monetary policy meeting on Friday.

The Karachi Stock Exchange's (KSE) benchmark 100-index closed at 16,806.58, up 0.37 percent or 61.98 points from the previous session.

Pakistan Telecommunications Company Limited rose 0.88 percent, or 0.15 rupee, to 17.23 per share amid speculation a case over its long-distance call rates could soon be resolved, while Byco Petroleum was up 4.67 percent, or 0.51 rupees, to 11.43 per share.

Stocks that fell included Lotte Pak, down 1.27 percent to 7.75 per share, and Karachi Electric Supply Company, which dropped 3.05 percent to 6.35 per share. (Reuters)

 Company News:

Pakarab fights back on DHF deal: KARACHI, Dec 13: Pakarab Fertilisers on Thursday fought back on the Dawood Hercules Corporation (DHCL) decision to walk out of the sale deal of Dawood Fertilisers.
On Tuesday the board of directors of DHCL had announced that the company was pulling out of a possible sale deal of Dawood Hercules Fertilisers to Pakarab Fertiliser (Pakarab). A memorandum of understanding (MoU) was executed between DHCL and Pakarab in respect of a possible sale of DHCL’s entire shareholding of 100 million shares in DH Fertilisers to Pakarab.
The DHCL in its statement had argued on Tuesday that “the consummation of the Transaction under the MoU was subject to entering into definitive agreements and under the MoU the parties made no binding agreement in relation to the transaction”.
DHCL had further claimed that until Tuesday, no definitive agreement was entered into, which was why the Board of DHCL in its meeting held on Monday, decided that the company “did not wish to pursue the Transaction for commercial reasons”.
The DHCL directors also said that the company had informed Pakarab of its intention to discontinue the negotiations in relation to the transaction.
On Thursday, Pakarab fought back claiming that the DHCL decision to back out of transaction was in violation of the MoU. A letter sent by the Secretary Pakarab to the stock exchanges stated that the company was “surprised” to read the DHCL letter on KSE website, “considering that DHCL has still not directly communicated this decision to us”.
Second, Pakarab stated that it was equally surprised on account of the fact that the MoU between the parties was to expire on Dec 15, and in terms of clause 8, the MoU could only have been terminated with the mutual consent of the parties or upon execution of a binding Share Purchase Agreement, prior to the expiration date.
“It is thus inexplicable that DHCL has chosen to issue the letter dated Dec 11, which is in complete violation of the MOU,” Pakarab stated and concluded its communiqué with the words: “In the light of the aforesaid and otherwise, Pakarab reserves all rights to pursue appropriate action against DHCL”.
Pakarab Fertiliser is a joint venture between Arif Habib Group and the Fatima Group, each holding one-half of the equity.
Sources said that Arif Habib had rushed to Lahore on Thursday to find out for himself the facts of the case. A source privy to the matter said that late in the evening on Saturday last, the two parties were on the same page in respect of the transaction of sale of shares of Dawood Hercules to Pakarab. What could have made DHCL change its mind over-night and pull out of the deal is yet shrouded in mystery.
An analyst said that the fertiliser business was embroiled in numerous problems. It suffered line losses and lack of planning on the part of the government mainly on the gas issue which was a perpetual headache for urea producing companies.
Yet earlier this week, the fertiliser industry saw a ray of hope as gas supplies to four plants on the SNGPL network: Pakarab Fertilisers, Dawood Hercules, Agritech and Engro Fertilisers looked like on track of resolution. “It has suddenly started to look like the fertiliser production can become economically viable in future,” said the analyst.
Yet the version of the Dawood Hercules Corporation might be communicated to the stock exchange in the next few days. Investors are watching the developments with interest since the failure to find amicable solution to the dispute could lead the parties finally to knock at the doors of the Courts.

MOHAMMED SALEEM MANSOORI