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Tuesday, 19 February 2013

STOCK MARKET UPDATE: 20.02.2013



STOCKS
Karachi Stocks Up 88.24 Points:
KARACHI, Feb 20: The KSE-100 index was at 17905.95, up 88.24 points.  (Today @ 11.45 am)


February 19, 2013
 5 TOP GAINERS  &  LOOSERS:

Rafhan Maize Prod.
Rs 100.00
Nestle Pakistan
Rs (154.99)
Sunrays Textile
Rs 8.21
Indus Dyeing
Rs (24.67)
Engro Corporation
Rs 4.27
UniLever Pak
Rs (17.50)
Packages Ltd.
Rs 4.22
Siemens Pakistan XD
Rs (4.83)
Pak Services
Rs 2.49
Fateh Textile
Rs (4.51)

Stocks falter on profit-taking in telecoms
KARACHI, Feb 19: Stocks ended lower on Tuesday as cautious investors chose to book profits as the index approached the technical level of 18,000 and dealers said massive selling was witnessed in the telecom sector. “PTCL closed 4 per cent down amid unconfirmed news that telecom companies may face contempt of court after increasing international call rates. Other telecom stocks also fell. Engro on the other hand continued its upward drive after the agreement of increased gas supply,” said Samar Iqbal, a dealer at Topline Securities Ltd.
There have been unconfirmed reports that the Lahore High Court has issued a contempt of court to the telecom companies for charging higher rates to international incoming callers.
But according to Arif Habib Research, these reports have been denied. “As per our checks with the industry, talk of the issuance of the Contempt of Court notices assumed to be given to the LDI operators on charging higher rates to international incoming callers, and any reversals of the already charged LDI revenues (from higher rates to normalised rates) in the books of LDI operators, has been strongly denied.”
The KSE 100-share index ended 0.27 per cent, or 47.90 points, lower at 17,817.71 points. However, it made a fresh all-time high at 17,941.79 points and an intra day low at 17,787.33 points.
Turnover fell to 266.24 million shares, compared with 291.61m shares traded on Monday but trading value increased to Rs7.9 billion from Rs7.18bn in the previous trading session.
Market capitalisation stood at Rs4.44 trillion from Monday’s Rs4.47tr.
“Negativity turned loud after the announcement by SNGP (Sui Northern Gas) regarding a negative impact of Rs8bn in retained earnings, post LHC decision that forced the stock to hit lower lock in back-to-back sessions,” said Hasnain Asghar Ali from Escorts Capital.
However, losses were restricted as foreign investors bought shares worth a net $3.02 million on Tuesday, compared with just a net $903,203 on Monday, bringing the total net buying for the month at $16.67m. Companies were the biggest sellers with equity worth $4.18 million.
Dealers said investor will be looking towards Oil and Gas Development Co Ltd due to announce its result on Wednesday for the quarter ended on December 31. OGDCL ended 58 paisa lower at Rs207.59.
The biggest gainer was Rafhan Maize Prod which ended Rs100 higher at Rs3,750, followed by Sunrays Textile which closed Rs8.21 higher at Rs172.51. Nestle Pakistan witnessed the biggest loss as it shed Rs154.99 to Rs4,800.01, followed by Indus Dyeing, which ended Rs24.67 lower at Rs468.86.
The KSE-30 index ended 0.26pc, or 37.73 points, lower at 14,586.56.
Out of the 347 companies traded, the value of 107 increased, 212 decreased while 28 remained unchanged.
The telecom sector along with second and third tier shares once again dominated the 10 most active traded stocks: PTCL topped the list as it fell 88 paisa to Rs21.89 on turnover of 33 million shares, Fauji Cement shed 21 paisa to close at Rs7.84 on 29.3m shares and Jahangir Siddiqui Co Ltd rose 30 paisa to Rs18.31 on 21.43m shares.
Engro Corp gained Rs4.27 to Rs103.43 on 18.17m shares, Telecard Ltd witnessed profit-taking as it ended 41 paisa lower at Rs5.15 on 16.09m shares and SNGPL closed Rs1.16 lower at Rs22.20 on 13.17m shares.
Pace Pakistan shed 21 paisa to Rs4.20 on 10.81m shares, WorldCall Telecom fell 26 paisa to Rs3.15 on 8.77m shares and Byco Petroleum decreased by 54 paisa to Rs13.27 on 6.61m shares.
Engro Foods rose 97 paisa to close at Rs119.13 on 5.47m shares.
Telecoms weigh down on KSE; rupee down: KARACHI: Pakistan's stock market closed lower on Tuesday amid unconfirmed news that telecom companies may face contempt of court charges after increasing international call rates.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.27 percent, or 47.90 points, lower at 17,817.71.
Pakistan Telecommunication Corporation fell 4.26 percent to 21.80 rupees and Engro Corporation rose 4.18 percent to 103.30 rupees.
The Engro Corporation rose after an agreement with the
state-run Oil and Gas Development Ltd that Engro would receive a
reliable gas supply at a time of national gas shortages, said
Samar Iqbal at Topline Securities.
In the currency market, the rupee ended weaker at 98.16/98.21 against the dollar, compared to Tuesday's close of 98.10/98.15.
Overnight rates in the money market fell to 7.25 percent compared to Tuesday's close of 7.50 percent. (Reuters)
Company News:
SNGPL reserves to be cut by Rs8bn: KARACHI, Feb 19: A notice released by the Sui Northern Gas Pipelines Limited (SNGPL) at the KSE on Tuesday hit the shareholders in the company like a ton a bricks.
As ‘price-sensitive information’, SNGPL intimated to the KSE that the financial statements for the years 2010-11 and 2011-12 “were prepared, presented and approved on the basis of a stay granted by the Lahore High Court, against the determination of Oil and Gas Regulatory Authority (OGRA)”.
However, on Feb 15, 2013 the Lahore High Court dismissed the petition filed by the company. Yet, in the notice, the sting is in its tail: “The net financial impact of this decision may results in reduction in retained earnings as of June 30, 2012 by approximately Rs8.361 billion.”
Earlier on Feb 13, while announcing the financial figures for the year ended June 30, 2012, the board of directors had recommended distribution of cash dividend at Rs2.50 per share along with bonus at 10 per cent.
SNGPL had posted profit after tax (PAT) amounting to Rs3.0 billion for the year ended 2012, translating into earning per share (eps) at Rs5.28, which represented a robust growth over PAT at Rs1.125bn and eps at Rs1.95 the earlier year.
While disseminating the financial figures for the year ended June 30, 2012, the company had put a paragraph on the bottom line of page one of three, which read as follows: “The auditors have no qualifications in their report. However, they have drawn the members attention to Notes. 16.1.2 and 24.3 to the financial statements, details of which will be communicated while submitting the Annual Report (for 2012) to the Exchange”.
In the last available accounts of SNGPL on its website for the quarter ended March 31, 2012, as “contingencies”, the company in note No.8.1 reported the details of differences with OGRA and their impact on the financial figures. While it is difficult to understand how the shareholders could have done more than look at the earnings and payouts for the March 31, 2012 to gauge the depth of danger, the notice detailing the financial figures for 2012 released by the company on Feb 13 stated that the auditors had drawn attention to certain notes which “would be communicated while submitting the Annual Report to the Exchange”.
Most individual and retail investors could not be expected to dig deeper into previous accounts to peep into the “contingencies”. Such investors appear to have suffered a loss.
The accounts for the quarter ended March 31, 2012, shows the company’s shareholders’ equity at Rs19 billion including reserves at Rs13bn. If the “retained earnings” were to be reduced by Rs8.4bn, the reserves would drop to Rs4.6bn and the shareholders’ equity to Rs10.6bn. All of that would pull down the break-up value of the SNGPL share to Rs18.37, from Rs33.
It would be unfair to state that SNGPL misguided the shareholders, but the figures for the year ended June 30, 2012 were not the ‘whistle blower’ for the impending danger, without the mention of Rs8.361bn ‘contingency’.
The corporate regulators have an issue on their hands. They have to determine if whether the release of earnings and payout figures, just after the conclusion of he Board meeting, are enough or should the corporate sector reporting requirements be further tightened to release all such information which could impact the reported numbers.
Such disclosure of full information at the stage of announcement of earnings and payouts, would shield the shareholders from such lurking dangers as were present in the SNGPL case.
On Tuesday, as would be expected, the share in SNGPL hit the “lower lock”, by a loss of Rs1.16 to close at Rs22.20 in trading in 13 million shares.
 
MOHAMMED SALEEM MANSOORI

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