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Tuesday, 3 July 2012

STOCK MARKET UPDATE: 04.07.2012







STOCK:


Karachi Stocks Up 62.79 Points:
KARACHI, July03: At the close of trading, the KSE-100 index was at 14205.71, up 62.79 points.
July 3, 2012
5 TOP GAINERS  &  LOOSERS:

Colgate Palmolive
Rs 20.09
Unilever Food
Rs (133.31)
Clariant Pak
Rs 5.83
Siemens Pak
Rs (34.10)
Attock Petroleum
Rs 4.90
Nestle Pak
Rs (18.00)
Indus Motor Co
Rs 4.86
Bata Pak
Rs (17.77)
Ismail Industries
Rs 4.02
Philip Morris
Rs (8.30)

Karachi Stocks add 58 points to overnight rally
KARACHI, July 3: Shares on the Karachi stock market extended Monday’s phenomenal gains of 342 points by the addition of 57.87 points on Tuesday. The KSE-100 index closed at 14,200.79 points.
The aggregate gain of 2.88 per cent in two days was about a third of the gains accrued in full financial year 2012.
But some market participants thought that the performance of the KSE-100 index did not portray an accurate picture of the market as heavyweight stocks could easily tilt the balance either way.
Oil and gas sector giant OGDC, with a weightage of over 20 points for a rupee, rose by Rs2.39, which some thought could have contributed over 40 points to the index rise. But there could be some genuine reasons for investors to be bullish on the capital market.
The surge in international stocks and commodities markets and the hopes of progress on US talks with Pakistan on the opening of the Nato supply routes were thought to be triggers. Foreign investors who may be allocating funds for regional equity markets were again on the buy side on Tuesday with net purchases of $2.25 million worth stocks.
Some analysts thought that investors may be collecting high dividend yielding shares ahead of the upcoming results season, particularly as corporates disburse dividends in the fourth quarter.
Ahsan Mehanti at Arif Habib Corp said that stocks finished higher though profit-taking was also seen side by side. Investor interest was prominent in blue chip stocks ahead of earning announcements due next week.
Recovery in global stocks and commodities and expectations of continued inflow of foreign portfolio investment played a catalyst role in bullish sentiments.
Hasnain Asghar Ali commented that the local participants continued to accumulate front line stocks. Relatively high volatility was witnessed during the trading session but the presence of renewed interest kept the volume ticking. Local investors searched for safer bets for both short term trades and portfolio investments.
Improved values offered wide spread opportunities for stock and sector swapping that was prominent mainly in cement and fertiliser stocks. The losses in some issues were off-set by gains in others on improved volume.
The analyst observed that besides contributing substantially to the overall turnover, the strategy increased the number of companies that came up for active trading.
Low multiples and high yields at the KSE would keep the liquidity poised towards local equities and the likely improvement in volumes would continue to invite day traders for short term bets, analysts said.On the news front, revenue collection at the customs stage was noted to have increased by 31 per cent to Rs685 billion for the ongoing fiscal year, compared to collection of Rs523 billion last year.
Also the State Bank of Pakistan was said to have estimated that $630 million could be generated from the auction for 3G licences to support external and fiscal deficit.
Turnover rose by 12 per cent to 119 million shares, from 106 million shares on Monday, but the trading value declined by 8 per cent to Rs4.566 billion, from Rs4.943 billion. Market capitalisation rose by Rs15 billion to Rs3.616 trillion.
The volume leader was D.G. Khan Cement which declined by 20 paisa to Rs41.08 on 12m shares. It was followed by PTCL up 26 paisa to Rs14.60 on 11m shares, Jah Sidd Co adding 14 paisa to Rs13.55 on 10m shares, Fauji Cement higher by 16 paisa to Rs5.90 on 8m shares, Fauji Fertiliser up by 34 paisa to Rs114.28 on 7m shares and Dewan Cement gaining 52 paisa to Rs4.14 on 7m shares.
Engro Corporation up by Rs1.45 to Rs105.03 on 5m shares, Lafarge Pakistan stronger by 27 paisa to Rs4.73 on 5m shares, Lucky Cement up by 63 paisa to Rs120.21 on 4m shares and Engro Foods declining by 39 paisa to Rs65.08 on 4m shares.

ANNOUCEMENTS/COMPANY NEWS:
1) Listing ban on defaulter company associates: KARACHI, July 3: The Karachi Stock Exchange announced on Tuesday that in future listing would not be allowed to any company which is an associate of a defaulter company.
The bourse also unveiled a list of 18 companies which the exchange said it had decided to delist.
Market watchers said that while delisting has been an ongoing process, the significant feature of the list of companies prepared and announced by the Exchange on Tuesday was that alongside the name of companies, the bourse had also put up names of companies’ board of directors.
The exchange had started the process of separating the erring companies, particularly in regard to Section 30 of the Listing Rules of Exchange and putting them up on a separate ‘defaulters’ counter’.
The aim was to put such companies to shame. Many companies corrected the wrongs and got themselves shifted from the defaulters counter back to the ready board.
Yet, such an act did not meet with complete success. The latest move by the exchange on Monday of revealing the names of directors of the companies under default and to be de-listed, appears to be in line with the disclosures by commercial banks of the names of directors of companies, who fail to repay loans secured from banks.
A market watcher said that it was the least that the Exchange can do to those who rob small investors of their hard earned money.
The KSE stated on Tuesday that the case of companies to be delisted has been forwarded to the SECP for initiating necessary action against management/companies under the Companies Ordinance, 1984.
The 18 companies with the names of directors and the defaults committed, reported on Monday include those of: Accord Textiles; Amin Spinning Mills; AMZ Ventures; Dadabhoy Insurance Company; Fawad Textile Mills; First Islamic Modaraba; Harum Textile Mills; Indus Fruit Products; Ittefaq Textile Mills; Kashmir Polytex; MacDonald Layton & Co; Mian Mohammad Sugar Mills; Mubarik Dairies; Sahrish Textile Mills; Shahpur Textile Mills; Ittefaq General Insurance; The Union Insurance Company of Pakistan and Zahur Textile Mills.

2)IPPs move SC to get outstanding dues cleared: ISLAMABAD: Against the backdrop of crippling loadshedding in the country, eight independent power producers (IPPs) moved the Supreme Court on Tuesday seeking a direction for the government to clear circular debt in the energy sector.
“Clearing a total of Rs61.4 billion outstanding dues will help ensure continued availability of electricity from the IPPs,” the petitions said.
A three-judge bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Jawwad S. Khwaja and Khilji Arif Hussain admitted the petitions for hearing and ordered the court office to fix the matter for July 10.
“Why will we not hear the case when the entire country is clamouring for electricity,” observed the chief justice.
The petitions have been filed by Liberty Tech, Orient Power, Atlas Power Limited, Nishat Power, Nishat Chunian, Saif Power, Halmore Power and Sapphire Electric for the payment of outstanding dues of Rs11.131 billion, Rs4.121 billion, Rs10.478 billion, Rs9.661 billion, Rs10.899 billion, Rs5.722 billion, Rs2.415 billion and Rs6.974 billion, respectively.
These companies which had earlier invoked the sovereign guarantees filed the petitions to initiate legal action domestically, instead of approaching the international arbitrators.
The federal government through the ministries of water and power and finance, National Transmission and Despatch Company (NTDC), Private Power and Infrastructure Board (PPIB), National Electric Power Regulatory Authority (Nepra), Water and Power Development Authority (Wapda), Pakistan Electric Power Company (Pepco), Central Power Purchasing Agency (CPPA), the State Bank of Pakistan (SBP) and Independent Power Producers Advisory Council are respondents.
The petitions questioned whether the failure of the government to honour its sovereign financial guarantees to IPPs was not an act of mis-governance fraught with grave consequences for the wellbeing and prosperity of Pakistan.
The IPPs sought a court declaration that the right to available capacity and energy under the power purchase agreement is conditional upon timely payment and that the NTDC be permanently restrained from levying any liquidated damages at any time. The petitioners requested the court to restrain the respondents from treating them as defaulters of bank loans.
The petitions said the looming energy crisis was bound to have a devastating impact on the economy already reeling from a series of blows due to reckless governmental actions, some planned and some consequential.
“The entire nation has borne witness to the manner in which the functioning of industry as a whole has been crippled by electricity shortages leading to drastic falls in production, reduction in exports, increased inflation, greater unemployment triggering frustration and violent crime in urban centres to the accompaniment of anodyne official statements and lack of any remedial action.”
The principle cause of this crisis, the petitioners said, was the issue of circular debt which had devastated the companies operating in the power sector, and indirectly affected all major sectors of the economy.
Over the past two decades, they said, different governments had failed to meet the energy requirements of the country and on account of factors, including mis-governance and poor policy making, the governments had been unable to provide the necessary support and infrastructure required to alleviate the key problems plaguing this most important facet of government.

MOHAMMED SALEEM MANSOORI

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