Thursday 21 June 2012

STOCK MARKET UPDATE:22.06.2012

STOCK:


Karachi Stocks Down 66.58 Points:
KARACHI, June 21: At close of trading, the KSE-100 index was at 13600.60, down 66.58 points.

June 21, 2012
5 TOP GAINERS  &  LOOSERS:

UniLever Pak
Rs 67.43
Unilever Food
Rs (58.50)
Siemens Pak
Rs 30.63
Mithchells Fruit
Rs (14.15)
Nestle Pak
Rs 5.84
Indus Motor Com
Rs (13.12)
Ismail Industries
Rs 3.92
Philip Morris
Rs (8.82)
Mari Gas Co
Rs 3.49
Linde Pak
Rs (3.93)

Karachi Stocks accelerate fall by 66 points
KARACHI, June 21: Shares at the Karachi Stock market accelerated the fall on Thursday with the KSE-100 index down 66.58 points to close at 13,600.60 points.
It was difficult to say whether the sell-off was a result of deepening crisis on the political front, particularly in the Punjab or the question mark over the successor to the ousted Prime Minister Gilani. And whether the tussle between the two pillars of State would continue, if, as is likely to be the case, the incumbent also refuses to write to the Swiss government. The only consolation is perhaps the fact that the Parliament is intact, which dispels fears over the validity of Finance Bill 2012. Any adverse movement on that account, could send the market spiraling down because the immunity of non-disclosure of source of funds invested in stock market for two years, granted by the Presidential Ordinance of April and incorporated in the Finance Bill, was of utmost importance for keeping a floor under the market fall.
Liquidity was running dry in the market evident by another day of insignificant turnover.
On Thursday, the ‘companies’ group of stockholder came in for rescue with huge purchases of net $8.41million.
Others were major sellers: Mutual Funds offloading equity worth $6.41 million and foreign investors pulling back $1.73 million from the Pakistani stocks.
Hasnain Asghar Ali, a market expert, observed that low volumes and stagnation kept prices under pressure though panic was averted during initial trade mainly due to ‘syndicated’ efforts.
Absence of buyers forced the short-term players to stay on the sidelines after initial sell-off. Short covering just before the close of the session, followed by bottom fishing supported the benchmark from sinking below 13,500 levels. He thought that ‘syndicated’ attempt for portfolio dressing ahead of June closing was keeping hopes alive for a rebound led by strength in various high priced stocks.
Ahsan Mehanti at Arif Habib Corp said that the stocks closed bearish on concerns over rising political noise.
Investors remained cautious ahead of nomination for new PM. Uncertain global stocks and commodities on worries over the global economic slowdown and limited foreign interest affected the sentiments. Power shortfall for industrial units and gas shutdown for fertilizer plants played a catalyst role in bearish activity at KSE.
Turnover though slightly higher at 57 million shares valued at Rs2,197 billion over Wednesday’s 47 million shares of the value of Rs1,735 billion was also extremely low.
Market capitalisation declined by Rs17 billion to Rs3.471 trillion, from Rs3.488 trillion the previous day.
Among the 346 active stocks, 157 were losers compared with 93 gainers. Another 96 issues finished unchanged. The major fall was noted in UniLever Food, down by Rs58.50 to Rs2,714, followed by Mitchells Fruit Farms down by Rs14.15 to Rs271.64.
The biggest gainers for the day included UniLever Pak up by Rs67.43 to Rs7,367.43 and Siemens Pakistan higher by Rs30.63 to Rs718.69.
On the 10 top traded stock list, PTCL on Thursday posted the highest turnover of 5 million shares, down 68 paisa to Rs14. Hub Power Company saw volume of 4m shares up by 13 paisa to Rs41.93; DG Khan Cement lost 95 paisa to Rs39.08 on 4m shares, Jah.Sidd.Co, which had stood at the top slot for several days, fell to the fourth place with trading in 3m shares, down 20 paisa to Rs13.12, Nishat Chunian Power slid 13 paisa to Rs15.05 on 3m shares; Fauji Fertilizer declined by Rs1.81 on 3m shares over the news of arrival of imported urea; Engro Corporation, short of gas supplies, lost another Rs1.24 to Rs103.85 on 2m shares; Quice Foods added 98 paisa to Rs9.10 on 2m shares; Engro Foods dipped by Rs1.88 to Rs65.18 on 2m shares and Adamjee Insurance sank Rs2.98 to Rs59.50 on 2m shares.
Karachi stocks fall : KARACHI: Country’s apex bourse closed lower on Thursday amid fresh political uncertainty ahead of a vote to elect a new prime minister due on Friday.
The Karachi Stock Exchange benchmark 100-share index ended down 0.49 percent, or 66.58 points, at 13,600.60 points on volume of 44.86 million shares.
"Investors remained on the sidelines as uncertainty prevailed on the political front. Subdued sentiment in the regional stocks market and international commodity markets also dampened sentiment in the market," said a dealer.
The Supreme Court on Tuesday declared Prime Minister Yusuf Raza Gilani ineligible for office for refusing to re-open corruption cases against President Asif Ali Zardari, triggering a new crisis in the nuclear-armed country. (Reuters)

Pakistan’s stocks down; rupee weakens; o/n rates stagnant
ISLAMABAD: Pakistan’s main stock market closed lower on Thursday amid fresh political uncertainty ahead of a vote to elect a new prime minister due on Friday.
The Karachi Stock Exchange benchmark 100-share index ended down 0.49 per cent, or 66.58 points, at 13,600.60 points on volume of 44.86 million shares.
“Investors remained on the sidelines as uncertainty prevailed on the political front. Subdued sentiment in the regional stocks market and international commodity markets also dampened sentiment in the market,” said Mohammad Rizwan, a dealer at Topline Securities.
The Supreme Court on Tuesday declared Prime Minister Yousuf Raza Gilani ineligible for office for refusing to re-open corruption cases against President Asif Ali Zardari, triggering a new crisis in the nuclear-armed country.
In the currency market, the rupee weakened to close at 94.36/41 to the dollar, compared to 94.21/26 on Wednesday.  Overnight rates in the money market closed unchanged at 11.90 per cent.

ANNOUCEMENTS/COMPANY NEWS:
1) PSO, KP govt plan Rs45bn refinery: ISLAMABAD, June 21: With its receivables in excess of Rs215 billion leading to cut back on oil imports, the Pakistan State Oil (PSO) is contemplating setting up a refinery of 36,000 barrels per day of refining capacity in Khyber Pakhtunkhwa at an estimated cost range of $500-750 million (Rs45-65 billion).
The government of KP, PSO and a private investor would form a joint venture company to share 20 per cent equity while the remaining 80 per cent funds would be arranged through commercial banks, according to PSO’s managing director Naeem Yahya Mir.
The country’s largest oil supplier will operate and manage the new refinery, he said.
But some quarters in the federal government disagree with the economic viability of the new refining venture to be called “Northern Refinery.”
They argue that a region that produces less than 8,000 barrels per day and that too with existing long-term contracts could not make commercially viable a new refinery with 36,000 barrels per day of capacity.
An official at the Ministry of Petroleum and Natural Resources said it was interesting to note that the state-run oil company was participating in a Rs45 billion plus refinery at a time when it was finding difficult to ensure smooth supplies of furnace oil and other petroleum products.
Similarly, it was also strange that refinery has been proposed to be set up in area where total crude production was more than four times lower than the capacity planned for a new refinery.
The total oil production in KP stood at 7,843 barrels per day during financial year 2010-11 while PSO is planning a refinery with a total capacity of 36,000 barrels per day.
He said the Attock Refinery Limited in Rawalpindi already has a long-term contract for about 7,000 barrels per day.
But Mr Mir who completes his six-month probation this week questions such critics.
“They (critics) are wrong. KP has a potential to produce 30,000-40,000 of crude very soon and the refinery would take two-three years to come into production. Therefore, the planned refinery is not only commercially feasible but very profitable too,” he told Dawn, adding those questioning the refinery are non-technical people.
Mr Naeem said the refinery seemed profitable in view of the fact that entire range of refined products would be marketed by PSO itself. He said while it would be premature to accurately estimate the cost of refinery at this stage but it would range somewhere between $500 million and $750 million.
He explained that the exact costing would become clear when quality of the crude was known that would determine the number of refining units to be installed.
Nonetheless, he said the company was now entering into the analytical phase after having finalised a business strategy that a refinery was required to meet local product supplies in the north and secure a market even in across the border (Afghanistan).
The PSO chief said the government was currently in the process of issuing Term Finance Certificates to ease circular debt that would resolve major problems for the PSO.
Even otherwise it was not an issue for the country’s only trillion rupee company to spare about $40 billion (Rs3.7 billion) for a strategic venture.
The joint venture of KP, PSO and a private investment firm would have to put together at least $100 million (about Rs10 billion) equity while the remaining funds would be raised through commercial banks.
Official data suggests KP has remaining recoverable crude reserves of about 82 million barrels, against country’s total estimated reserves of about 264 million barrels.
Sindh has remaining crude reserves of about 102 million barrels while Punjab has 78 million barrels, according to estimates of Directorate General of Petroleum Concessions (DGPC).
Against total estimated reserves of about 964 million barrels, the country is reported to have already consumed 680 million barrels.
The existing refineries in Pakistan have two major draw backs. Firstly, they are not of economy of scale size and secondly produce 25-35 per cent of furnace oil that has remained $400-850 per ton more expensive than input that is crude oil ($350-700 per ton).
This is the reason these refineries resort to getting higher than international price at the cost of consumers.
Pakistan has currently five refineries with a total crude oil processing capacity of around 13.15 million tons per annum.
The refineries currently process 9.77 million tons crude oil, of which approximately 30 per cent is produced locally, while the rest is imported.
Out of these refineries, one is located at Morgah near Rawalpindi, one at Multan (mid-country) while the other three are located at Karachi.
The government had approved establishment of five new refineries way back in 2005, to come into production in 2010, 2011 and FY2014. These could not materialise due to financial instability arising out of geopolitical situation and political unrest.
PSO’s previous attempts to buy out major stakes in Pakistan Refinery Limited were thwarted by competing forces.

to mid-country region would provide additional benefits to the end consumers.

MOHAMMED SALEEM MANSOORI

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