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Tuesday, 28 February 2012

DAILY STOCK MARKET UPDATE: 29.02.2012


Stock

Karachi Stocks Up 145.15 Points:

KARACHI, Feb 29: The KSE-100 index was at 12739.22, up 145.15 points.(today 12.07 pm)

February 28, 2012






TOP  5  SCRIPTS GAINERS AND LOOSERS:

Indus Dyeing
Rs 8.99
Rafhan Maize
Rs (50.00)
PICT
Rs 5.33
Bata Pakistan
Rs (32.51)
JWD Sugar Mills
Rs 3.87
Dream world
Rs (7.05)
Attock Refinery
Rs 3.52
Bhanero Textiles
Rs (6.00)
EFU General
Rs 3.16
Attock Petroleum
Rs (4.22)




Karachi Stocks undergo mild correction
KARACHI, Feb 28: The share market on Tuesday suffered a mild reaction after having risen by about five per cent during the last six straight weeks in a sustained run-up as investors were not inclined to take even a technical breather aided by higher corporate announcements.
A modest decline of 4.44 points in the benchmark index at 12,739.22 reflected that only extreme positions were adjusted on some of the counters as far as the broader market was concerned it maintained a status quo.
Much of the activity remained confined to the cement sector followed by reports of higher export earnings and above market expectations payout by Lucky Cement. It has now replaced the hereto trend-setter fertiliser sector, which came in for profit-selling under the lead of Fauji Fertiliser and Engro Corporation and some others.
“Essentially, it was a technical correction long overdue in a highly overbought market,” said a leading analyst Ahsan Mehanti.
“But the underlying sentiment remained uppishly inclined thanks to renewed buying in the cement sector”.

He said those who were anticipating a massive sell-off at the current higher levels were a bit disappointed as the market at no stage reflected that the current run-up was overdone.
“At one stage it seemed that all roads were leading to the National Bank ahead of its board meeting and expectations of higher payout,” analyst Samar Iqbal said “various rumours about its payout may not be in line with objective conditions but those who
are close to top ones may not be that fool”.

A large volume of about 15m shares and an increase of Rs2.48 in its share value at Rs52.11 reflects that something positive is around for the stakeholders of the NBP, he said.
However, a large volume of well over 200m shares, equally shared by the recent actives including the low-priced ones showed that investors were not inclined to take profits at the rising prices and holding on for still better results, some others said.
Leading losers led the list of actives under the lead of Rafhan Maize and Bata Pakistan, off Rs50 and Rs32.51, while among the top gainers Indus Dyeing and Pak International Container Terminal were leading, up by Rs8.99 and Rs5.33 respectively.
Traded volume rose to 217.592m shares from the previous 206m shares but losers held a comfortable lead over the gainers at 153 to 115, with 79 shares holding onto the last levels.
The active list was topped by JS & Co, easy 48 paisa at Rs10.01 on 26m shares followed by Pace Pakistan, firm by 60 paisa at Rs2.57 on 21m shares, National Bank, sharply higher by Rs2.48 at Rs52.11 on 15m shares, D.G. Khan Cement, easy 31 paisa at Rs27.92 on 15m shares, Bank of Punjab, off 80 paisa at Rs7.74 on 11m shares, Lucky Cement, higher by Rs2.06 at Rs97.71 on 10m shares and Azgard Nine, lower by 36 paisa at Rs6.81 on 9m shares.
They were followed by Bank Alfalah, steady by four paisa at Rs14.08 on 7m shares, IGI Investment Bank, firm 16 paisa at Rs1.46 on 6m shares and Dewan Cement steady by 26 paisa at Rs2.12 also on 6m shares.
FUTURE CONTRACTS: The active list on this counter was led by D.G. Khan Cement, easy by 29 paisa at Rs28.17 on a large volume of 3.775m shares followed by National Bank, higher by Rs2.50 at Rs52.63 on 2.600m shares and Engro Corporation, easy by four paisa at Rs108.32 on 1.511m shares.
They were followed by Attock Refinery, higher by Rs3.39 at Rs127.56 on 1.191m shares and Fauji Fertiliser, off Rs1.98 at Rs123.18 on 0.916m shares.
DEFAULTER COUNTER: Dost Steels again led the list of actives, up 11 paisa at Rs2.26 on 0.235m shares followed by Kohinoor Power, easy by 27 paisa at Rs2.00 on 0.134m shares, Redco Textiles, easy two paisa at Rs0.48 on 89,000 shares, Kohinoor Industries, lower by two paisa at Rs1.04 on 63,420 shares and Brothers Textiles, lower seven paisa at Rs1.10 on 40,500 shares.
DIVIDEND: The following companies announced dividend for the year ended Dec 31, 2011. Bata Pakistan cash 200 per cent, Habib Metropolitan Bank, 15 per cent, Linde Pakistan 50 per cent and Quality Textiles, interim 10 per cent.

Minimum holding of 120 days for CGT exemption
Karachi: The apex regulator Mr Muhammad Ali and the member advisory board, Federal Board of Revenue (FBR) Mr Shabbar Zaidi stated on Tuesday that the proposal of ‘no questions to be asked on sources of funds’ invested in stocks, for two years (till June 2014) in the CGT regime, would not facilitate ‘whitening’ of ‘black’ money. They stressed that ‘caveats’ were being placed to block such activities. The minimum holding period of 120 days on ‘weighted average’ basis was to be fixed, which would rule out money-laundering. Holding of less than 120 days (four months) would be open to investigation of source of funds, they said.
At a mid-morning discussion on a private TV channel, the SECP chairman reassured that the mechanism and automatic system for collection of CGT by the National Clearing Company of Pakistan Limited (NCCPL) were being put into place. “We are optimistic that the reformed regime of CGT will be implemented, as scheduled, from April 1”, he said. Mr Muhammad Ali observed that the objectives of CGT were three-fold: To document the markets; increase tax revenue and bring more taxpayers into the tax net. “In the next two years (due to the levy of CGT), all capital market would be fully documented”, he said. Mr Muhammad Ali stressed that checks and balances would apply to stem any effort at money laundering. The CGT was imposed in July 2010, but could not be implemented in two years, which necessitated its reformation.
Mr Shabbar Zaidi said that it was transition from presumptive tax to CGT. The provision of collection by NCCPL could be described as: “Outsourcing of tax collection by the government”, he said and added that, it should be seen as an independent party (NCCPL) performing the functions of collection for FBR, “for the time being”.
The step would set at rest investors’ fear of harassment at the hands of the taxman if he came in direct contact with him. He said that the FBR had suggested adding caveats to the amnesty proposal so that money-laundering could be prevented.
Earlier in the morning a report released by brokerage InvestCap, analysts Khurram Schehzad and Abdul Azeem wrote that during the meeting of the Tax Reform Coordination Group (TRCG) on Friday last, the FBR proposed changes in reformed CGT proposals put forwarded by the SECP and endorsed by the Ministry of Finance (MoF).
One of them related to the complexities in adding the new law to the prevailing Income Tax Ordinance, 2001. After a day long discussion in which the TRCG sought views of the stakeholders, it was proposed that a constitutional way was to be found in implementing the changes in the CGT regime.
It was decided that it could be done through the introduction/addition of an Eighth Schedule to the Income Tax Ordinance 2001 to handle all the CGT-related issues and amendment of total immunity to investigation of the source of income of stock investors till 2014, by adding a minimum holding period.
The addition of the new Schedule, the TRCG thought could be quickly done through a Presidential Order which, later on, would be attached as an essential part of the Ordinance through the Finance Act. The analysts believed that the amended Ordinance might be on time, before the Apr’01, 2012 deadline earmarked for the changed CGT regime. Yet its implementation was thought to be effectively in place not earlier than the announcement of the upcoming budget, considering that the Senate elections due in March may divert all official attention to politics.
Corporate Result:
Nishat Chunian profits nosedive
KARACHI: Nishat Chunian, the textile manufacturing company, profits plummeted 91% to Rs48 million in the first half of fiscal 2012.
The decline in the spinning business margins was expected amid sharp fall in yarn prices, which took down gross profit levels for the period from July to December 2011, according to analysts.
After posting a loss of Rs86 million in the first quarter of fiscal 2012 amid declining spinning and power division margins, the company returned to profitability in the second quarter on the back of slightly better gross margins, says a JS Global Capital research note.
Expensive leftover inventory carried forward from financial year 2011 deteriorated Nishat Chunian’s gross margin as the company incurred inventory losses.
Net sales eased by 2.6% to Rs8.3 billion in the first half of fiscal 2012 against Rs8.5 billion in the same period last year.
However, other operating income almost doubled to Rs410 million during the period under review against Rs207 million in the same period last year. Dividend income from Nishat Chunian Power (NCPL) supported the bottom-line as the power subsidiary of the Nishat Chunian Group announced a Re1 per share cash dividend that would add Rs176 million to the other income.
Availability of cotton at cheaper rates is expected to improve the bottom-line of the company as the company is expected to shed all the previously bought expensive cotton inventory that was purchased at Rs8,500 per maund.
Meanwhile, Nishat Chunian Power profits depicted a 12% growth to Rs1.02 billion compared with Rs914 million in the same period last year.
The company declared an interim dividend of Rs1.5 per ordinary share of Rs10 on the back of easing liquidity following the conversion of circular debt to Term Finance Certificates.
Mohammed Saleem Mansoori

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