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Thursday, 19 July 2012

STOCK MARKET UPDATE: 20.07.2012

STOCK:

Karachi Stocks Down 48.57 Points:
KARACHI, July 19: At the close of trading, the KSE-100 index was at 14548.02, down 48.57 points.
July 19, 2012
5 TOP GAINERS  &  LOOSERS:

Wyeth Pak
Rs 26.14
Mitchells Fruit
Rs (15.83)
Unilever Pak
Rs 19.75
Bata Pak
Rs (10.18)
Clariant Pak
Rs 8.08
Island Textile
Rs (10.13)
Abbott Lab
Rs 6.97
Akzo Nobel
Rs (5.33)
ICI Pak
Rs 6.93
Millat Tractor
Rs (4.95)
Karachi Stock-Index loses 28 points on profit-taking
KARACHI, July 19: Stocks were marginally down on Thursday, snapping a three-session winning streak. The KSE-100 index shed 28.38 points to close at 14,568.21 points, conceding a little from two weeks of strong gains.
Traders attributed it entirely to profit taking, particularly after the 151 points run up in index on Wednesday.
The volume in terms of shares traded stood slightly lower to 165 million shares on Thursday, from 168 million shares the earlier day, yet the trading value declined by Rs877 million to Rs4.567 billion, from Rs5.444 billion, representing a larger participation of low-valued shares.
The heavy-weight oil and gas sector saw several scrips lose value but mostly in smaller amounts. OGDC was down 0.96 paisa, which alone could account for more than half of the day’s decline. Foreign buying continued, albeit at a low pace. On Thursday foreign portfolio inflow amounted to $0.58 million.Abid Ali Habib, former director KSE said that the early morning news from Washington that US House of Representatives had voted for an amendment that could block up to $650 million in proposed payments to Pakistan unless the country lets coalition forces resume shipment of war supplies across its territory, sent shivers across the stock market. Pakistan has budgeted $1.34 billion on account of Coalition Support Fund (CSF) reimbursement for the current fiscal. US has not released the amount yet and investors feared that if the CSF was stalled the country’s weak economy could take a blow. Abid said that the concern kept investors nervous who postponed fresh buying and decided to take profit. But he said that the results reporting season was a big blessing and as hefty dividends were expected from some blue chip scrips, the decline on Thursday was mild. He reiterated that the positive outcome of last week’s SECP-KSE meeting where several market-friendly measures were declared made stock investment attractive. In particular he mentioned the permission for intra-day short sale, which could boost volume.
Samar Iqbal, equity dealer at Topline Securities commented that after gaining for three consecutive days, profit taking was witnessed at local bourse. Though volumes improved but these were concentrated amongst three stocks JSCL, ANL and JSIL. Cement sector remained active however its share price performance was mixed.
“Stocks closed bearish amid institutional profit taking across the board on concerns for Pakistan military aid cut by $650m by US, rising fiscal deficit over 8.5 per cent of GDP and security issues in the city”, says Ahsan Mehanti at Arif Habib Corporation. He said that concerns for Moody’s downgrade of foreign and local currency bond ratings and Pakistan Banks deposit ratings affected the investor sentiments despite strong corporate earnings outlook.
The KSE-30 index stepped down by 37.06 points to 12,628.16 points. Market capitalisation slipped by Rs4 billion to Rs3.720 trillion, from Rs3.724 trillion. Among the 376 active stocks on Thursday, 151 closed in positive territory, 140 in negative and 85 remained unchanged. The biggest gains were noted in Wyeth Pak Limited up by Rs26.14 to Rs901.13, while the heaviest loss was in stock of Mitchell’s Fruit Farms, down by Rs15.83 to Rs300.94.
On the volume leaders’ list, Jah Sidd Co was again in the lead with 33m shares, up by 74 paisa to Rs16.40.
It was followed by Azgard Nine down 4 paisa to Rs7.18 on 14m shares; JS Investments gained 61 paisa to Rs10.02 on 11m shares; DG Khan Cement lost 51 paisa to Rs45.17 on 9m shares; Engro Foods was lower by 27 paisa to Rs69.02 on 7m shares and Arif Habib Corp added 27 paisa to Rs33.78 on 6m shares.
Pak Reinsurance closed at the ‘upper circuit’ with maximum gain of Re1 to Rs19.19 on 5m shares; Lotte PakPTA was up by 8 paisa to Rs7.63 on 5m shares; Lafarge Pakistan inched up by 2 paisa to Rs4.91 on 5m shares and Lucky Cement gained 39 paisa to close at Rs129.48 on 4m shares.
SECP penalises 15 companies
ISLAMABAD, July 19: The Enforcement Department of the SECP has penalised auditors/directors of 15 listed and non-listed companies for failing to discharge their duties in accordance with the law.
The department during May and June initiated various regulatory and punitive actions against directors and auditors of companies with the aim to safeguard interests of minority shareholders.
During this period, proceedings were initiated against auditors of 20 companies who reportedly failed to discharge their duties as per requirements of law.“Seventeen cases have been finalised and penalty has been imposed on 15 auditors while warnings
have been issued in two instances,” an official of the SECP said.

Besides, the department ordered investigation and inspection into the affairs of four companies after it was noted that the companies were involved in long-term suspension of operations, mismanagement of affairs, non-payment of dividend and non-provision of information to the members of companies.
“In order to protect the rights of minority shareholders, the department identified eight violations of unauthorised inter-corporate financing and initiated proceedings against the directors of these companies,” the SECP has said.
The directors of four companies have been penalised while directors of 2 companies have been strictly warned to ensure compliance.
In addition, directors of 2 companies have been penalised on account of abuse of powers while in 10 instances directors were penalised for misstating facts to shareholders.
The department initiated legal proceedings against companies for depriving shareholders of their right to participate in the affairs of the companies by not holding or delaying annual general meeting of companies.
In this regard, directors of 2 companies were penalised and penalty was imposed where the company failed to disclose material information to shareholders regarding proposed sale of property in the statement of material facts annexed with the notice of
annual general meeting.

During the period under review, 138 show-cause notices were issued and 136 cases against directors and statutory auditors were concluded. Proceedings were initiated owing to breach of relevant provisions of law related to unauthorised inter-corporate financing, late/non-submission of quarterly accounts, improper preparation of annual financial statements, non-submission of consolidated financial statements, misstatements of financial statements, authorisation of financial
statements, misuse of powers by directors and failure by auditors to abide by their respective statutory duties.

Meanwhile seven companies, failing to file their annual audited accounts with the SECP, have been penalised, and penalty has
been imposed on directors of 25 companies for non-conforming with the requirements of the law regarding authorisation and issuance/circulation of annual financial statements.

MOHAMMED SALEEM MANSOORI

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