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Monday, 20 February 2012


Karachi Stocks Up 41.70 Points:
KARACHI, Feb 20: The KSE-100 index was at 12537.38, up 41.70 points.(today  2.50pm)

February 17, 2012


Millat Tractors
Rs 21.75
Atlas Honda
Rs (5.66)
Attock Petroleum
Rs 18.85
Shahtaj Sugar
Rs (3.29)
Pakistan Oilfields
Rs 9.62
Rs (3.19)
Service Industries
Rs 8.92
National Refinery
Rs (2.05)
Engro Corporation
Rs 6.14
Exide Pakistan
Rs (1.69)
Equities maintain bullish trend on selective buying
KARACHI, Feb 17: Stocks finished the weekend session on firm note as investors continued to build-up positions on selected counters aided by higher corporate payouts and perceptions of a robust future market.
The KSE 100-index maintained its upward drive for the 5th session in a row as market talk of higher dividend by some of the other leading companies during the next week did not allow them to lay their guards, analysts said.
It ended the day with a fresh gain of 91.44 points at 12,495.58, after early having touched the high mark of 12,611.52. The close was a bit lower on weekend selling in some of the leading base shares.
Analysts said the index level above 12,600 points indicates that some of the leading brokerage houses were believed to be in the full know about the changes including collection mode of CGT and were keeping the buying tempo on the higher side.
They said having an overview of the developing situation both on the corporate and financial front amid prevailing political constraints it appears that the next target of 13,000 points for the benchmark is not that ambitious.
Apart from index-heavy shares, notably OGDC, Pakistan Oilfields, the fresh rise was also attributed to the strength of National Bank and some other leading shares.
Engro Corporation also rose sharply higher by Rs6.14 on overnight spillover buying aided by higher payout and bonus shares.
Among the top gainers Millat Tractors and Attock Petroleum were leading, up by Rs21.75 and Rs18.85, while losers were led by Atlas Honda and Shahtaj Sugar, off Rs5.66 and Rs3.29 respectively.
Traded volume rose further to 233.268m shares from the previous 206m shares as gainers held a modest lead over the losers at 138 to 121, with 81 shares holding onto the last levels. But bulk of it remained confined to low-priced shares.
The active list was JS & Co, firm by 24 paisa at Rs9.41 on 31m shares followed by D.G. Khan Cement, lower by 52 paisa at Rs25.16 on 27m shares, Azgard Nine, firm by 59 paisa at Rs6.72 on 24m shares, Lafarge Pakistan, steady by eight paisa at Rs2.44 on 19m shares, Fauji Cement, easy by 19 paisa at Rs4.79 on 14m shares, Bank Alfalah, higher 25 paisa at Rs13.20 on 12m shares and National Bank, up Rs1.89 at Rs49.08 also on 12m shares.
They were followed by Fatima Fertiliser, easy by five paisa at Rs23.93 on 8m shares, Engro Corporation, sharply higher by Rs6.14 at Rs133.99 on 6m shares and Lotte Pakistan, lower by one paisa at Rs8.57 on 5m shares.
FUTURE CONTRACTS: D.G. Khan Cement came in for active selling and was marked down 51 paisa at Rs25.24 on a large volume of 4.790m shares followed by National Bank, which came in for strong support and rose by Rs1.90 at Rs49.19 on 2.255m shares and Fauji Fertiliser Bin Qasim, lower by 48 paisa 1.616m shares.
They were followed by Arif Habib Corporation, steady five paisa at Rs30.15 on 0.716m shares and Attock Refinery, higher by Rs2.08 at Rs124.27 on 0.773m shares.
DEFAULTER COMPANIES: Much of the activity again remained confined to the Dost Steels, which was quoted further higher by 12 paisa at Rs2.28 on 70,495 shares followed by Quice Foods, lower by 26 paisa at Rs3.99 on 10,510 shares and Genertech Power, firm by four paisa at Rs0.44 on 9,002 shares.
DIVIDEND: First UDL Modaraba, cash interim five per cent, Burshane LPG Pakistan, interim 15 per cent for the half year ended Dec 31, 2011.
KSEStocks gain 246 points during week
KARACHI: The benchmark KSE-100 Index gained 246 points or 2.16 per cent in the week that ended on Friday, to close on 12,495.68 points with average daily volumes edging higher by 3.21 per cent to 175.05 million shares.
Market volumes were led by second and third-tier stocks, which included JSCL, ANL, FCCL and LPCL.
Foreign investors offloaded $0.84million worth equity during the week compared with an inflow of $5.9 million worth shares in the earlier week. Average traded volume during the week stood at 175 million shares, while average traded value decreased by 14 per cent to $50 million. Futures open interest edged higher by 2 per cent over earlier week with spreads at 0.05 per cent.
“While the market started the week on a subdued note, due to unchanged interest rates in the monetary policy announcement, it built up momentum from Wednesday onwards,” said analysts at AKD Research. Several reasons including the reduced political noise; some splendid corporate results and the prospects of the solution of Capital Gains Tax (CGT) issue were mentioned as the reasons for bear run.
Yawar Uz Zaman, analyst at brokerage InvestCap commented: “Despite no change in policy rate, positivity crept in after FBR officials visit to the stock market and Central Depository Company (CDC) to review the CGT collection mechanism”. He said that investors believed it to be a step towards realisation of former Finance Minister’s promises for equity market reforms.
Moreover discussions with India on MFN status and trilateral talks among Pakistan, Iran and Afghanistan also supported market activity as leading sectors landed in green. Market’s open interest position during the week rose to Rs 1.86 billion, up 2 per cent over earlier week.
Furqan Ayub, analyst at JS Global stated that the SBP decision to keep the policy rate unchanged failed to weaken the investor sentiments at the local bourse. Investors also ignored domestic political uncertainty, as strong corporate announcements, US State department’s allocation of $2.4 billion for Pakistan and attractive valuations lured them to equity trading.
Most analysts visualised the market to move in tandem with the flow of the financial results next week as market heavyweights ODGC, PTC and NBP were about to come up with their announcements.

SECP order of 3-year board term irks brokers
KARACHI: The Securities and Exchange Commission of Pakistan (SECP) directive of Wednesday, asking companies limited by ‘guarantee’ to ‘strictly comply with the provisions of Section 180 of the Companies Ordinance, 1984,’ has irked most brokers.
The apex regulator has directed that the ‘companies limited by guarantee’ should ensure that their boards of directors are elected for a period of three years.
“This is the round about way of making the brokerage community fall in line,” said an agitated broker.
Earlier, the SECP had asked the Exchange to increase the term of office of directors of the Exchange from current one to three years. That was rejected by the broker community at an extraordinary general meeting, by an overwhelming majority.
The apex regulator stepped back and asked for two years, but the members again, in another meeting declined to give approval, sticking to the present one year term.
The directive does not mention the stock exchanges, but given the fact that ‘Companies limited by Guarantee’ are almost extinct, the brokers’ suspicion of the directive specifically drawn out for stock exchanges carry weight.
According to ancient and the new law, there are three major kinds of companies: ‘Limited by Guarantee’; ‘limited by shares’ and ‘unlimited company with or without a share capital’.
In the antic ‘company limited by ‘guarantee’, each member undertakes to contribute to the assets of the Exchange in the event of its being wound up while he is a member, or within one year afterwards, for payment of the debts and liabilities of the Exchange contracted before he ceases to be a member, and of the costs, charges and the expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding one thousand rupees.
And the most common form of company in the country to be registered is a “company in which the liability of each shareholder is limited to the amount individually invested” with corporations being “the most common example of a limited company.”
The sum of “one thousand rupees” liability is interesting and speaks for itself the antiquity of the law.
Fast backward into history, the KSE (guarantee) Ltd was incorporated under the Indian Companies Act VII of 1913 (as applicable to Pakistan) 63 years ago on March 10, 1949 by a total of nine members.
Also interestingly, section 28 of the 1949 Memorandum of Association of the KSE, relating to ‘election of directors’ provided: “The Exchange shall in the month of December every year in the manner hereinafter provided elect by ballot five (5) directors of the Board.” With times, the number of directors has changed but elections still continue to be held in winter.
In changing or keeping the term of office of directors at one year, it has to be acknowledged that both the SECP and the KSE brokers, are right in their own way. The stock exchange members would like to see new faces each year for a quicker election keeps directors on their toes. The members’ complaints are quickly attended to.
“If they sit for three years, no one is going to work until the next elections are due,” explained one member in regard to directors.
The SECP on its part feels that a longer term of the board of director is essential, for continuity of policies.
“Just as some rules and regulations are being put in place by the directors, the year draws to a close and the new board starts from a scratch”, said a market participant sympathetic to the apex regulator’s view.
He pointed out that listed companies were also required by law, to elect the board for three year term.

Mohammed Saleem Mansoori

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