STOCK MARKET UPDATE: 14.01.2013

STOCKS

Karachi Stocks Up 102.52 Points:
KARACHI, Jan 11: At the close of trading, the KSE-100 index was at 16632.44, up 102.52 points. 

 (Today Market is 24.72 Down@ 2.38 pm)

January 11, 2013

5 TOP GAINERS  &  LOOSERS:

Millat Tractors	Rs 14.90	Bata Pak	Rs (35.00)
Mithchells Fruit	Rs 8.00	Siemens Pak	Rs (8.90)
Fauji Fertilizer	Rs 7.37	Khyber Tobacco	Rs (6.96)
Al Ghazi Tractor	Rs 5.67	Attock Refinery	Rs (4.47)
Gillete Pak	Rs 5.31	Agriautos Industries	Rs (2.95)

Stocks recover 104 points

KARACHI, Jan 11: The KSE-100 index stormed higher by 104.79 points on Friday to close at 16,634.71 points. While the market started out on a dismal note and extended the losses of Thursday in the first session of trading, they rebounded by a three-digit gain almost immediately on the resumption of trading in the second half. The stock market witnessed a turnaround after a major political party, which had announced its intention to participate in the Jan 14 ‘Long March’ only a day ago, distanced itself from the event.
The investors’ sentiment received a boost, as they thought that it would take the wind out of the sails of the threatened ‘Long March’. “Politics is having a deep impact on investor psychology, which in turn determines the direction of the market”, said an analyst.
Some profit-taking was witnessed near the close of the second half as investors felt uneasy over the developments on the political front. Many believing discretion to be better part of valour, decided to wait and watch until the market reopens on Monday.
Local ‘individual’ investors were also nervous over the law and order situation and exchange of fire between troops on the border with India, which pushed them to sell equity worth $2.32 million on Friday.
The foreign investors however seized the opportunity to pick stocks at lower prices ending with net buy of $3.88m.
Equity Dealer, Samar Iqbal at Topline Securities commented that investors built fresh positions amid hope that that political tensions might gradually ease. Cement stocks remained in the limelight in anticipation of better results. The stock price of Fauji Cement with volume of 23m shares rose by 4 per cent.
Ahsan Mehanti at Arif Habib Corporation stated that higher home remittances, positive talks with IMF on macro economic assessment, Government assurance for timely elections in the country and hopes for easing political uncertainty affected the sentiments.
Rising cement sales data, expectations for stronger earning announcements in blue chip stocks and higher global commodities played a catalyst role in bullish sentiments.
The headlines were generally mixed. Banks had achieved 34 percent of agricultural credit disbursement target during the first five months of current fiscal year (FY13). According to figures released by the SBP, overseas Pakistanis remitted $7 billion in the first six months of the financial year, helping the country maintain external account at a manageable level.
The SBP data also showed that the country’s liquid foreign exchange reserves fell by $249.3m during the previous week mainly due to debt payments. Local car sales declined to 57,540 units during the first half of 2013, down by 30 per cent as compared to 81,944 units during same period last year.
In all, 320 stocks came up for trading with 176 gainers, 117 losers and 27 ending unchanged. Volume swelled to 116m shares on Friday, from 89m shares the previous day.
Trading value improved to Rs3.203bn, from Rs2.676bn. Market capitalisation improved to Rs4.168 trillion, from Rs4.142 trillion on Thursday.
The leading gainer was Millat Tractors, which rose by Rs14.90 to Rs600.37, followed by Mitchells Fruit up by Rs8 to Rs377.
The biggest losers were Bata (Pak) which plunged by Rs35 to Rs1,300 and Siemens Pakistan lower by Rs8.90 to Rs 610.
On the volume leaders’ list, Fauji Cement stood on top with 23m shares, up by 28 paisa to Rs6.74. Jah Sidd Co rose by 24 paisa to Rs14.98 on 9m shares; PTCL lost 11 paisa to Rs16.28 on 6m shares, Byco Petroleum edged higher by 2 paisa to Rs13.23 on 6m shares, Maple Leaf Cement inched up by one paisa to Rs15.32 on 6m shares; Fauji Fertilizer Bin Qasim after some initial gains, withdrew to close lower by 25 paisa to Rs38.51 on 4m shares.

Company News:

NML to sell stake in Lalpir Power: KARACHI, Jan 12: The board of directors of Nishat Mills Limited in their meeting last week approved the divestment of up to 15 per cent of its shareholding in Lalpir Power Limited as part of divestments by the sponsors of Lalpir Power.
The stock would be offered for sale to the public through an Initial Public Offering (IPO) and the power plant would go on to be separately listed on the Karachi and Lahore stock exchanges subject to the requisite regulatory and other approvals.
Nishat Mills Limited (NML) did not disclose the offer price in its announcement. The company holds 110 million shares in Lalpir Power, which works out to 32 per cent stake. The 15 per cent divestment of its stake, therefore, translates into 16.5 million shares.
Among other Nishat Group Companies, Adamjee Insurance holds 8 per cent or 27.6 million shares in Lalpir. “We expect the entire exercise to be similar to Nishat Group’s listing of Pakgen Power in June 2011,” says analyst Fahd Niaz at KASB Securities.
The market appetite to absorb a new offering is believed to be ‘decent’ given that exposure in Independent Power Plants (IPPs) is encouraging in the current macro scenario, such as the currency devaluation and lower interest rates.
Lalpir power formerly known as AES Lalpir started commercial operations in November 1997. The oil fired power plant having a gross capacity of 362MW was partially acquired (32pc of total shares) by NML in Dec-2009.
“Such an acquisition proved quite fruitful to the textile company as the IPP declared dividend per share of Rs5.50 in FY12 translating into an earning per share (eps) of Rs1.56 in NML’s accounts contributing 15 per cent to the total eps of Rs10.04 in FY12,” says Abdul Azeem, analyst at InvestCap.
In the absence of divestment price disclosure, analysts at several brokerage houses came up with their own analysis. “The implied price range for Lalpir works out at Rs13.92 to Rs44.57 per share”, KASB calculated.
InvestCap observed: “Lalpir Power is valued at Rs16.49 per share on NMLs balance sheet in FY12. However, the company claims independent valuation of the asset at Rs25.95 per share. “In the absence of any further details regarding IPO price by the management our
sensitivity analysis provides the possible eps impact of the IPO at three different price levels namely Rs25, Rs30 and Rs35.”
“Following NML’s decision, we expect high probability of other sponsor companies to announce similar divestment moves”, predicted KASB research team.
Breather for KSE as MQM quits long march: KARACHI: Local stocks closed higher on Friday market after traders learnt the main political party in the financial hub of Karachi decided not to participate in a political protest next week.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.63 percent, or 104.79 points, higher at 16,634.71.
Cement stocks remained popular amid the expectation of better results announcements, said a dealer.
Fauji Cement was up 4.49 percent to 6.75 per share while Engro Foods rose 1.77 percent to 96.37 per share.
Pakistan Telecommunication Corporation Ltd fell 0.79 percent to 16.26 per share and Fauji Bin Qasim was down 0.67 percent to 38.50 per share.
In the currency market, the rupee ended steady at 97.26/97.32 against the dollar, compared to Thursday's close of 97.27/97.32.
Overnight rates in the money market ended at 9 percent compared to Thursday's close of 9.40 percent. (Reuters)

MOHAMMED SALEEM MANSOORI