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Tuesday, 10 July 2012

STOCK MARKET UPDATE: 11.07.2012

STOCK:


Karachi Stocks Up 2.89 Points:
KARACHI, July10: At the close of trading, the KSE-100 index was at 14180.99, up 2.89 points.
July 10, 2012
5 TOP GAINERS  &  LOOSERS:

UniLever Pak
Rs 70.91
Nestle Pak
Rs (13.63)
Unilever Food
Rs 59.89
Pak Gum & Chem
Rs (3.80)
Colgate Palmolive
Rs 30.18
Indus Motor Co
Rs (3.23)
Mitchells Fruits
Rs 13.75
Burshane LPG
Rs (2.69)
Island Textile
Rs 8.21
Ibrahim Fibres
Rs (2.37)
Equity market suffers mild losses
KARACHI, July 10: Stocks posted minor loss of 5.20 points on Tuesday with the KSE-100 index closing just a shade below the previous day’s level, at 14,374.34 points.
The market started on a firm note and for most of the day bulls remained in charge. At mid-day however, shares took a plunge into the red, only to rise again. The day witnessed a tug of war between the bulls and the bears with weak pulls from the either side.
The disturbing aspect was the low volumes as most retail investors remained on the sidelines. The second and third-tier stocks that had generated activity in the market in the previous months were again ignored.
Market participants were holding out hopes of a possible initiative to boost volumes in the upcoming meeting of the bourse officials with the SECP team headed by the chairman scheduled for Thursday.
The figures releases by the National Clearing Company of Pakistan showed that local institutional investors had run into profit-taking through the sale of shares worth around $2 million; individuals mad a small buy of $0.53 million but foreign investors brought some cheer to the market on Tuesday with net purchases of stocks worth $1.17 million.
The expectations of high-dividend yield shares led by cement sector were in demand both by the local and foreign fund managers, ahead of the upcoming corporate results. Investors had an eye on the economic numbers but yawned at the mention of current political events.
Ahsan Mehanti, a regular commentator said that the stocks closed lower amid profit-taking in the corporate earning announcements session at KSE.
Institutional support was witnessed in blue chip stocks on improvement in Pak-US relations and speculations ahead of SECP chairman visit to KSE. Limited foreign interest amid uncertain global markets played a catalyst role in bearish activity at KSE.
Samar Iqbal, equity dealer at Topline Securities, stated that profit-taking in key stocks led index to close slightly negative.
However, cement stocks continued to shine on the board with DGKC and Lucky in the lead of gainers.

The KSE-30 index shed 5.27 points, about the same as that of the 100-share index. The market capita-lisation was down by Rs1 billion to Rs3.661 trillion on Tuesday, from Rs3.662 trillion the previous day.
Volume of business stood at 83 million shares compared to 90 million shares traded on Monday with the trading value down from Rs3.801 billion to Rs3.782 billion.
The biggest losers for the day were Nestle Pakistan down by Rs13.63 to Rs4,067.15, followed by Pak Gum & Chemical declining by Rs3.80 to Rs132.95. Among the highest gainers, UniLever Pak rose by Rs70.91 to Rs7,373.41 and Unilever Food up by Rs59.89 to Rs2,809.82.
In all, 371 stocks came up for trading on Tuesday with 137 losers, 121 gainers and 113 closing at their previous values.On the 10-most actively traded list, D.G. Khan Cement led with the highest volume of 12m shares, the stock up by 14 paisa to Rs43.60.
On the second slot stood the Engro Foods Limited with 9m shares posting a gain of Rs2.53 at Rs73.31 on 9m shares, Jah Sidd Co slipped 13 paisa to Rs14.11 on 6m shares, Lucky cement added 39 paisa to Rs124.42 on 4m shares and Fatima Fertiliser was down 8 paisa to Rs25.33 on 3m shares.
Nishat Mills lost 48 paisa to Rs51 on 3m shares, Azgard Nine also gave up 39 paisa to Rs6.44 on 3m shares, Adamjee Insurance rose by Rs2.32 to Rs63.57 on 2m shares, Fauji Fertiliser Bin Qasim stood down by 35 paisa to Rs41.97 on 2m shares and Engro Polymer was up by 14 paisa to Rs10.25 on 2m shares.
Although not among the top volume leaders, stocks in Colgate Palmolive shot up by Rs30.18, Bata Pakistan posted gains of Rs6.61 and Pakistan Oilfields added Rs4.40.

Pakistani stock market slightly down
KARACHI: Pakistan’s main stock market closed slightly down on Tuesday after market gains in the previous session prompted selling.
The Karachi Stock Exchange benchmark 100-share index dropped 5.21 points, or 0.04 per cent, to close at 14,374.33 on volume of 65.46 million shares.
“Profit taking in key stocks led to the index closing slightly negatively,” said Samar Iqbal, a dealer at Topline Securities.
Brokers asked to open CDC accounts
KARACHI, July 10: With 55 days remaining to the deadline of Sept 3 by which the stock exchanges in Pakistan are to be demutualised, the regulators are streamlining rules and regulations and procedural requirements.
A notice released to the members (brokers) by the Karachi Stock Exchange on Tuesday, stated that under the Stock Exchanges (Corporatisation, Demutualisation and Integration Act), the statutory status of the KSE would change from company Limited by Guarantee to Company Limited by Shares.
Out of the total shares which shall be allocated to the members of the Exchange, the 40 per cent  shall be transferred to Members’ respective Central Depository Company (CDC) accounts and in pursuance of Section 9(2) of the Act, the remaining 60 per cent of the total shares shall be held in KSE participant account of the CDC, whereby these (60 per cent) shares shall be held in the sub-account of initial shareholder in manner that each sub-account shall hold 60 per cent of the shares allotted to each initial shareholder.
“In view of the above and as advised by the SECP in this regard; the members not maintaining an active CDC account are advised to either open (1) a CDC participant account/or (2) an investor account with CDC so that the 40 per cent shares that are to be issued in the name of the initial shareholders (members) are credited in their respective CDC accounts,” the KSE notice stated, asking members to comply with requirements latest by July 16, 2012.
An official of the bourse explained that 40 per cent of the shares of the paid-up capital of the KSE (the capital is currently being worked out by valuers) would pass on to the members own accounts, while the remaining 60 per cent would be in blocked account of the members with the CDC, for sale to strategic investors and the public in initial public offering (IPO) in the ratio of 40:20.
Following the demutualisation, the board of directors of the exchange would comprise 11 members with six nominations by the apex regulator, the SECP; four directors representing members with trading rights and the bourse managing director as the 11th member on the board. That would be a departure from the current five directors elected by the members (representing brokers); four nominated by the SECP and the MD as the tenth member.
An interesting situation could emerge in the two-year period between the completion of demutualisation and the timeline given for sale of shares to the strategic investors. “Effectively, the stock exchanges would be run by the SECP during those two years,” said a member who asked not to be named. But he did not either clarify whether it would be good or bad for the exchange.
SECP imposes fines on violators
ISLAMABAD, July 10: The Securities Market Division (SMD) of the SECP took enforcement actions for non-compliance of prevalent regulatory framework by the market participants during June 2012.
A penalty of Rs100,000 was imposed on Pearl Capital Management (Pvt) Ltd, a member of Karachi Stock Exchange (KSE), for execution of wash trades in its proprietary account.
Sakarwala Capital Securities Ltd, also a KSE member, was issued a warning against inappropriate business conduct.
In an effort to protect the investors’ interest the SMD imposed a fine of Rs300,000 on Equity Master Securities (Pvt) Ltd, a member of Lahore Stock Exchange, for provision of financing from private sources to its clients and inability to deliver proper trade confirmation reports.
Owing to the regulatory non-compliance, a warning letter was issued to the CEO of Quice Foods Ltd for violation of the KSE Listing Regulations.
In addition, 34 orders were issued under Section 224 of the 1984 Companies Ordinance to the directors/beneficial owners of listed companies for late filing of returns of beneficial ownership and penalties were imposed.
Notably among them being Ansari Sugar Mills, Colony Sarhad Textile Mills, Dewan Farooq Motors Ltd, IBL Health Care Ltd, Ismail Industries Ltd, J.K Spinning Mills, Kohinoor Mills Ltd, Nishat (Chunian) Ltd, Pakgen Power Ltd, Pakistan Synthetics Ltd, Premium Textile Mills, Ruby Textile Mills Ltd, Samin Textile Ltd, Shadman Cotton Mills Ltd and Sitara Chemical Industries Ltd.
Furthermore, an order was issued against CEO of Quality Textile Mills Ltd under 246 of the 1984 Companies Ordinance for late filing of From A. Meanwhile to develop the regulatory framework in line with international practices, an amendment to the First Schedule to the 1984 Companies Ordinance was approved.
Through this amendment, the Transfer Deed has been revised and option of dividend mandate has been inserted for those shareholders who wish for direct credit of their dividend into their bank accounts.
Demutualisation: SECP rejects bourses’ plans
ISLAMABAD, July 10: The Securities and Exchange Commission of Pakistan (SECP) has rejected the key documents submitted by the three bourses related to implementation of demutualisation for not meeting the desired standards.
The SECP has asked the KSE, LSE and ISE to re-devise their five-year development plans and segregation of commercial and regulatory functions.
Sources in the SECP told Dawn on Tuesday that the three bourses had highlighted their expenditures, revenue generation and other issues that they foresee in coming years.
“But we want them to foresee the future — where do the stock markets see themselves after demutualisation in five years from now,” an SECP official said. Apart from asking these bourses to resubmit their business plans, the SECP has also directed them to devise strategies after consultations with their advisors on demutualisation.
“We have guided the exchanges to work out the plans as per their standing in Pakistani market,” the official said, adding that the Islamabad Stock Exchange has to work out for new avenues and not to trail behind the equity market only.
“The ISE cannot beat the KSE in the field of equity trade, however they can look for new ventures and develop expertise in TFCs, bonds or develop specialisation to promote linkages with international stock markets,” he remarked.
The SECP has also turned back the plan for segregation of commercial and regulatory functions submitted by these bourses.
“The exchanges have maintained the current system but under the demutualised scenario the brokers will not be having the trading rights but each of them will be shareholders of the stock market,” he observed.
He added that the exchanges had failed to understand that there could be issues related with conflict of interest with demutalised exchanges especially after self listing of the exchanges.
The corporate sector regulator has asked the stock markets to resubmit the revised documents as early as possible as the timeline for the implementation of the demutualisation of stock markets nears and the SECP seems to be under stress as July 21, 2012 is the date set for the approval of these documents.
August 20, 2012 is the deadline for action by the stock exchanges over the documents approved by the SECP and September 3, 2012 has been set as the final date for corportisation and demutualisation of bourses.
In a recent SECP Chairman Muhammad Ali strongly stressed for following the timeline and called upon the concerned officials to regularly issue notices to the exchanges that were failing to submit their required documents.
However, the new challenge being faced by the SECP is that the managements of three bourses have demanded more guidelines regarding segregation of regulatory and commercial functions which might take time for the completion of documentation.


Company news:
1)  Lucky Cement Sustainability Report: LAHORE - Continuing with the trend of fair and transparent practices, Lucky Cement has reported separately on its sustainability initiatives for the year 2010-2011, being the first time for the company to report independently on sustainability initiatives. Lucky Cement’s Sustainability Report
2)  Trading of Akzo Nobel shares: KARACHI –In accordance with the Scheme of arrangement for the reconstruction of ICI Pakistan (“the Scheme”) and to implement the provisions of the Scheme, the Board of Directors of Akzo Nobel Pakistan Limited have allotted shares of Akzo Nobel Pakistan Limited in the manner determined
3)  Soneri Bank wins award: KARACHI – Soneri Bank is proud to have been honoured by the CFA Association with the ‘2011, Best Bank of the Year’ award in the medium banks’ category. This accolade marks the Bank’s impressive and growing performance during the last year in transaction banking and the 
4)  UBL Funds announces payout: KARACHI – UBL Fund Managers announced final payout for the year/period ended June 30, 2012 from its open-end investment schemes. The Company announced a stock dividend of Rs 9per units of par value RS. 100 from its UCIF.USF: The Company announced Rs. 4.50 per unit of par value Rs. 100. While f
MOHAMMED SALEEM MANSOORI

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