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Tuesday, 26 June 2012

STOCK MARKET UPDATE:27.06.2012

STOCK:


Karachi Stocks Up 12.59 Points:
KARACHI, June 26: At close of trading, the KSE-100 index was at 13654.79, up 12.59 points.
June 26, 2012
5 TOP GAINERS  &  LOOSERS:

UnileverFood
Rs 111.00
Exide Pak
Rs (9.30)
Rafhan Maize
Rs 71.48
Sanofi-Aventis
Rs (7.92)
Colgate Palmolive
Rs 12.94
PICT
Rs (3.95)
Nestle Pak
Rs 7.20
Biafo Inds
Rs (2.45)
Philip Morris
Rs 5.92
Service Inds
Rs (2.05)

Karachi Stocks post modest gain of 14 points
KARACHI, June 26: The stock market saw a tough tussle between the bulls and the bears as the KSE-100 index oscillated between the high of 13,707.21 and low of 13,587.97 on Tuesday.
The index finally settled at 13,656.04 points posting a minor gain of 13.84 points amid low activity as most of the retail investors opted to keep to the sidelines.
The market partially recovered some of the losses suffered on Monday mainly on concerns over the global financial crisis and a dip in the international oil, stocks and commodity prices.
The worries on those counts still lingered on Tuesday, but the investors seemed to look for value stocks. Foreign investors sold equity worth $1.92 million. Among local participants, companies were major sellers of stocks valued at $10.01 million.
However, whatever was offloaded by the corporates was quickly picked up by the banks, who bought shares of $9.68 million. Most market participants thought that the market could crawl along until the year-end, after which new buying may emerge.
Samar Iqbal at Topline Securities commented that the local bourse showed a mixed trend with the volume remaining low. However, some interest was seen in oil and cement stocks which were among the top 10 stocks with comparatively higher volumes.
The analyst reckoned that the market was waiting for any triggers on the US-Pak relationship and the movement of the rupee.
Ahsan Mehanti of Arif Habib Corp also voiced a similar opinion. “There are hopes for improvement in Pak-US ties on progress over the opening up of Nato supply routes.”
The institutional support in blue-chip stocks across the board ahead of year-end close played a catalyst role in bullish sentiments despite concerns for security situation in the city and uncertainty in global stocks and commodities on deepening of eurozone debt crisis, he added.
The KSE-30 index gained 4.86 points to close at 11,779.67 points, a slight improvement from Monday’s 11,774.81 points. The volume rose from 56.8 million shares to 57.9 million shares. However, it fell short of Friday’s trading in 84.9 million shares.
Trading value increased to Rs2.0 billion from Rs1.9 billion on the last trading session. Market capitalisation increased by Rs2 billion at Rs3.484 trillion.
Among the 353 active stocks on Tuesday, 105 were gainers, while 163 ended in minus columns. Another 85 shares remained unchanged.
The biggest gainer was UniLever Food which rose by Rs111.00 at Rs2825.00 followed by Rafhan Maize up by Rs71.48 at Rs2,932.67.
Exide Battery turned out to be the biggest loser closing at Rs178.97 after a loss of Rs9.30. Sanofi Aventis fell by Rs7.92 at Rs173.07.
On the active list, D.G.K Cement with 7m shares lost one paisa at Rs39.17. Hub Power Co lost three paisa at 41.51 on 4m shares. Pak Reinsurance shed 9 paisa at Rs17.65 on 4m shares.
Bank Alfalah gained 29 paisa at Rs17.30 on 3m shares, Jah Sidd Co lost 39 paisa at Rs12.59 on three shares, Engro Foods gained seven paisa at Rs65.18 on 2m shares, Lotte Pak lost 16 paisa at Rs7.10 on 2m shares.
Fauji Cement added 15 paisa at Rs5.69 on 2m shares. Lucky Cement gained 42 paisa at Rs111.63 on 1m shares and Fauji Fertiliser gained 25 paisa at Rs40.40 on 1m shares.

ANNOUCEMENTS/COMPANY NEWS:
1) CCP takes fertilizer producers to task: KARACHI: Competition Commission of Pakistan (CCP) enquiry into price of ‘locally manufactured urea fertilizer’ in the country has come up with the conclusion that the hike of 86 per cent during the period from Dec 2010 to Dec 2011, from Rs850 per bag to Rs1,580 per bag “seems to be unjustified and unreasonable.”
It said that the increase was unprecedented and highest during last 20 years.
The commission has issued show-cause notices to fertilizer producers and summoned a representative on July 12 to explain why an appropriate order may not be passed and a penalty for violation be not imposed under Sec 38 of the Competition Act.
In reply to queries by Dawn, the chairperson CCP, Ms Rahat Kaunain Hassan, argued that such actions do make a difference.
Her attention was drawn to similar steps earlier taken against cement cartels of which nothing tangible seemed to have emerged.
Ms Hassan stated that cement makers were a powerful lobby. Also that they had obtained stay orders from the courts.
She said that though errant groups, such as cement makers, may have escaped paying penalty, they and others against whom CCP had taken actions would sooner or later have to face the music.
Also, if a third party, consumers or farmers, were to seek remedy from courts against errant players, they could be facilitated by the CCP actions and enquiry reports.
For CCP, the chairperson said it was one institution that was ‘documenting the economy’ despite financial constraints.
For four years, the CCP budget had remained unchanged at Rs600 million with government grant at Rs200 million, coming in trickle. The results of CCP actions, she said, were visible to relevant persons even if they were not clear to all. She said that one positive outcome of CCP censor was that compliance with regulations had increased.
About remedies, the CCP chairperson said that one of them could be directing any one organisation that was getting too big to dominate, to restructure or divest part of its holdings. And she stressed: “It is vital that the matters of economic importance be prioritised in judicial reviews, in order to transfer the benefits to general public.”
And now back to the enquiry report on fertilizer units, released by the CCP on Tuesday (dated Feb 25). The report stated that all the factors were taken into account, such as gas curtailment, input costs, subsidies, profitability analysis and government policies, after which it was thought that the undertaking “appeared to have indulged in the practice of unreasonable price increase.”
The report observed: “Market of locally manufactured urea in Pakistan is a ‘captive market’ and all the undertakings in this relevant market have the ability to behave to an appreciable extent independent of its customers, consumers and competitors, irrespective of their market share.”
In a notice it said: “Simultaneous and coherent increases in prices of urea (same rate at same time) in the absence of an objective justification by the industry players indicates common policy/economic linkages between urea producers and therefore, the fertilizer market also appears to satisfy the conditions for existence of ‘collective dominance’.
The commission pointed out that the industry composition was of seven producers out of which four producers linked by two groups held 84 per cent of the total current capacity of the industry.
The break-up was: Fauji Fertilizer 32.7 per cent; Fauji Bin Qasim 8.8 per cent; Engro 36.4 per cent and Dawood Hercules 7.1 per cent.
The balance of 16 per cent was divided into three producers namely, Fatima, Pak Arab and Agritec.
“Collective dominance is also there as two groups, Fauji and Engro, hold over 84 per cent of total installed capacity of urea fertilizer industry,” the CCP report stated.
The commission argued against a dozen excuses for raise in prices, including the main issue of gas shortages. The CCP stated that gas curtailment impacted only 27 per cent of the total capacity. However, the producers representing 73 per cent also increased prices by the same amount – indicating some formal or informal understanding for such action in a coherent fashion.
“Thus, there was no justification for unprecedented price hike. Gas curtailment hit only Pak Arab, Agriteck, Dawood Hercules and Engro new plant.
Profitability increased to unreasonable proportion in spite of gas curtailment,” summed up the CCP enquiry report.
Contract for urea import: KARACHI, June 26: The Trading Corporation of Pakistan (TCP) on Tuesday has awarded contract for import of 100,000 tons of urea to the lowest bidder, M/s Transmmonia A G Switzerland, which quoted price at Rs411.77 per ton.
The TCP tender for import of urea was floated on June 21, 2012 and in all 15 bidders participated and quoted price, ranging from $411.77 to $488 per ton (c&f).
Official sources said that all the bids were found responsive in terms of prescribed evaluation criteria, but M/s Transammonia A G Switzerland offered the lowest price of $411.77 per ton c&f for a quantity of 100,000 tons.
The corporation is importing urea in pursuance of the ECC directives to meet the supply and demand gap of the urea fertilizer during Kharif season.
With the award of this tender, the total quantity imported by the TCP would come to 200,000 tons as against the total target of 300,000 tons, says a press release.
MOHAMMED SALEEM MANSOORI

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