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Sunday, 28 August 2011


Karachi Stocks Down 57.09 Points:
KARACHI, Aug 29: The KSE-100 index was at 10844.67, down 57.09 points.

AL-Ghazi Tractor
Rs 5.84
Nestle Pakistan
Rs (51.38)
Millat Tractors
Rs 5.37
Siemens Pak
Rs (39.53)
MCB Bank Ltd.
Rs 3.58
Rafhan Maize
Rs (27.47)
Packages Limited
Rs 3.06
Colgate Palmol
Rs (25.16)
Pakistan Petroleum
Rs 2.58
Atlas Battery
Rs (8.64)

KSE 30 – Shares Index
Previous 10,494.75, Thursday’s 10,418.57, minus 76.18 points.
KSE 100 – Shares Index
Previous 10,941.08, Thursday’s 10.901.76, minus 39.32 points.
Previous Rs.2,913.949bn, Thursday’s 2,896.377bn, minus 17.572bn.
National Bank 8.500m, Lotte Pakistan 7.441m, Fauji Fertiliser Bin Qasim 5.255m,PTCL,1.310m,Pakistan Oilfields 1.279m shares.
TONE:easy,total listed 637,actives 283,inactives 354,plus 65,minus 137,unchanged 81

KSE index sheds 39 points on profit-selling
KARACHI, Aug 25: The share market on Thursday failed to extend the overnight rally as the same set of investors who covered positions a day earlier indulged in profit-selling on the blue chip counters under the lead of oil and fertiliser sectors.
“I presume the pre-Eid holiday selling has made its debut,” said analyst Ahsan Mehanti, and added that the same set of shares, which were keenly sought during the last couple of sessions both at the fall and decline were targeted.
That fact was well-reflected in the performance of the benchmark KSE 100-index which again ended modestly lower from the early peak of 11,007.59 to 10,901.76, off 39.32 points.
Leading base shares, notably Pakistan Oilfields, Fauji Fertiliser, Engro Corporation, Attock Refinery and some others remained under pressure as was reflected by the reaction in it.
Analyst Samar Iqbal said the index should have fallen sharply lower but the relative strength of the index-heavy OGDC, which managed to add a modest rise of 84 paisa to its overnight gain saved it from a bigger shakeout.
“The continued weakness of National Bank amid reports of lower interim earnings, however, affected the underlying sentiment but renewed buying in Lotte Pakistan and some other lower price issues checked the larger market decline,” he added.
Minus signs dominated the list under the lead of Nestle Pakistan and Siemens Pakistan, off Rs51.38 and Rs39.53, while Al-Ghazi Tractors and Millat Tractors managed to put on fresh gains of Rs5.84 and Rs5.37 respectively .
Traded volume rose to 45m shares from the previous 40m shares but losers held a strong lead over the gainers at 137 to 65, with 81 shares holding on to the last levels.
National Bank again led the list of actives, and ended around its lower circuit breaker, off Rs1.77 at Rs38.08 on 9m shares followed by Lotte Pakistan, steady by 23 paisa at Rs11.08 on 8m shares, Fauji Fertiliser Bin Qasim, easy five paisa at Rs47.35 on 5m shares, Pakistan
Oilfields, sharply lower by Rs4.27 at Rs350.58 on 1.279m shares, Fauji Fertiliser, off Rs3.22 at Rs153.83 on 1.176m shares and Engro Corporation, off Rs3.36 at Rs116.64 on 1.169m shares.
They were followed by Packages, higher by Rs3.06 on reports of higher earnings, at Rs97.24 on 0.930m shares, Arif Habib Corporation, lower 35 paisa at Rs22.95 on 0.913m shares and Fatima Fertiliser, easy by 25 paisa at Rs15.90 on 0.902m shares.
FUTURE CONTRACTS: National Bank also led the list of actives on this counter, off Rs1.81 at Rs38.54 on a large volume of 1.801m shares followed by Engro Corporation, sharply lower by Rs3.11 at Rs116.48 on 0.715m shares and National Bank (August), off Rs1.91 at Rs38.16 on 0.510m shares.
Both the settlements of Pakistan Oilfields were quoted lower by Rs3.21 for August and Rs5.03 for the September delivery at Rs350.73 and Rs351.69 respectively on 0.467m and 0.451m shares.
DEFAULTER COMPANIES: Barring active support in Invest Bank, which was quoted unchanged at Rs0.26 on 0.160m shares, all other shares were fractionally traded.
Among the other actives, Blessed Textiles was prominent, which ended unchanged at Rs0.45 on 24,100 shares followed by S.S. Oils, steady by nine paisa at Rs4.10 on 10,000 shares and Dadabhoy Cement, lower 26 paisa at Rs1.79 on 7,249 shares.

Companies, banks holding board meetings abroad
KARACHI, Aug 27: Pakistani companies and banks are increasingly holding meetings of their board of directors outside the country.
In the current financial reporting season, the members of the board of directors of numerous companies/banks happily flew off, sometimes to enchanting destinations, for a fuller concentration on the accounting figures.
“They mix work with pleasure,” said a disgruntled small shareholder in one such company.
Attock Petroleum; Attock Refinery; National Refinery and Pakistan Oilfields–all with major stake of the Attock Group, held the directors’ meeting in Damascus (Syria).
Members of the Board of Fauji Group companies also thought it to the companies’ advantage to sit together overseas, instead of the Board rooms at the registered offices in Rawalpindi, to a couple of hours’ meeting, that is generally held to approve quarterly, half-yearly or annual accounts.
And so Fauji Fertilser Company (FFC) Board met in the dreamy world of Venice and Fauji Fertilzer Bin Qasim (FFBL) company directors went all along to the beautiful Vienna for a fuller concentration on the accounting numbers. But conspicuous by the presence of their heavy numbers are the banks, the Boards of which locate nicer foreign destinations for the mandatory meetings.
The United Bank Limited board of directors met in London; that of Muslim Commercial Bank in Kuala Lumpur; Faysal Bank in Istanbul; Bank Al-Falah in Abu Dhabi. And the list goes on.
Small shareholders grumble that it would be difficult for such companies and banks to justify the costs against benefits. But the one principal reason forwarded by such banks and even cash rich corporates to defend their act is that the majority shareholders were
foreigners, who would not hear of traveling to the country on ‘security concerns’.
“In such cases, a local nominee of foreign directors could participate,” said a grumbler.
He also pointed to an amended circular No 6 of 2010 issued by the top watchdog (Securities and Exchange Commission of Pakistan) which
simplified regulation regarding companies with directors abroad, for participation in meetings through tele/video conferencing.
“Now, it would not be essential to secure the tele/video recording of the proceedings of the meetings which would curtail the unnecessary expenditure of the companies,” the circular stated.
A couple of years ago, the State Bank of Pakistan was gracious to allow banks with more than 51 per cent foreign shareholding to convene four meetings abroad; those with 40 per cent but less than 51 per cent foreign equity holding to convene three meetings and directors in
banks having more than 30 per cent but less than 41 per cent foreign shareholding to meet once a year outside the country. The one meeting that banks with just about 31 per cent foreign majority stake had been allowed to hold outside the country was likely to be the board’s annual meeting.
Some shareholders had viewed the decision by the SBP with skepticism. The law provided that a nominee of a director unable to attend board meetings could participate instead.
“So why not take that cheaper route instead of taking a whole entourage at an expensive recreational city?” asks an ex-official of the corporate regulatory body.
The recent ‘hand book of corporate governance’ of the SBP says in Chapter 3: “SBP has noticed that some Pakistani banks have been holding meetings of their board of directors outside the country. This tendency on the part of banks leads to wastage of resources without any benefit to depositors / customers.”
And the SBP went on to say: “All Pakistani scheduled banks / NBFIs incorporated in Pakistan are, therefore, directed that they should not ordinarily hold their board of directors meeting abroad. In case it is considered necessary to hold meetings abroad for certain valid reasons, prior approval from the SBP should invariably be obtained.”
The investors` objection in regard to board meetings overseas is in respect of extra costs.
“Banks that are sitting on top of the depositors` money should distribute greater return to their depositors and disburse higher dividends to their shareholders instead of squandering money on such trips,” says an investor.
In regard to costs, a director on the board of a company mentioned that it would not just be the half a dozen or a dozen directors sitting on the board who could leisurely leave for the best tourist destinations on the planet, but a team of dozens of officials would accompany them.
Those could include the company secretary, the chief financial officer, the deputy financial officer and heads of other departments such as those of credit, deposits and marketing. All that underscores the point that unless there is good reason to do so, banks and corporates should, in the interest of good corporate governance, take the cost-effective route to a board meeting.
But an investment banker who stands stoically behind the boards’ decisions said: “With the acquisition of several local banks by foreign financial giants, it is only natural that majority shareholders would call a meeting at a destination convenient to them.”
He pointed out that in a free market economy over-regulation was undesirable. He believed that most banks and other companies would give due consideration to costs and if they found them really high, they would decide to hold the meetings in the country.
A mid-level executive who by the way always gets left out of his company’s entourage that leaves for some serene place abroad for the board meeting stressed that banks and companies should be asked to show the cost of holding board meetings separately on their profit & loss accounts so that their extravagance is revealed to the shareholders.
Was his advice meant to show his company the right path or was the man speaking out of jealousy? “A bit of both,” said he smiling.

Mohammed Saleem Mansoori

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