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Wednesday, 8 August 2012

STOCK MARKET UPDATE: 09.08.2012

STOCK:
Karachi Stocks Down 19.13 Points:
KARACHI, Aug 09: The KSE-100 index was at 14725.10, Down 19.13 points.(today 11.13 am)
August 8, 2012
5 TOP GAINERS  &  LOOSERS:

UniLever Pak
Rs 148.00
UniLever Food 
Rs (65.00)
Rafhan Maize
Rs 100.00
Millat Tractors
Rs (10.84)
Wyeth Pak
Rs 24.75
Habib Bank Ltd
Rs (2.86)
Indus Dyeing
Rs 16.73
Ismail Industries
Rs (2.62)
Exide Pak
Rs 11.28
Linde Pak
Rs (2.28)

Karachi Stock Market: KSE 100-index crosses 14,700-level
KARACHI, Aug 8: Stocks rallied at the Karachi stock market on Wednesday with the KSE-100 index posting a gain of 71.90 points to cross the 14,700 level and close at 14,744.14 points.
The market moved sideways in the last two sessions despite uncertainty over the outcome of the high profile judicial case, as investors did not retreat, which was an indicator that just a trigger was needed for fresh buying.
Volume stood at 59.75 million shares, twice as much from Tuesday’s turnover of just 45 million shares.
The decision to hand down the charge sheet to the prime minister by the Supreme Court was in line with market expectations.
The delay in further action also provided the much needed breathing space for the market to focus on the positive factors.
The State Bank is due to unveil its monetary policy statement on Friday and there are hopes of a cut in the discount rate.
The undervalued E&P sector, which is also the heaviest weighted sector, started the rally and the positive sentiment trickled towards other sectors as well such as cement and the fertilizer sector.
Foreign investors also continued to accumulate shares as their net buying was $0.58 million on Wednesday.
KESC also announced a profit of Rs2.8 billion which surprised most investors and spurred buying into the stock. Almost a quarter of the day’s turnover was due to buying of KESC shares which led it to close up 81 paisas.
Ahsan Mehanti at Arif Habib Corp said that the stocks closed bullish amid institutional interest in blue chips ahead of major earning announcement. Furthermore, the recovery in global stocks also helped lift share values, despite concerns for circular
debt in the energy sector and possible losses caused to industries due to power outrages.

Hasnain Asghar Ali, COO at Escorts Capital commented that gainers were the banking sector followed by E&P, fertilizer and cement. The market seemed to have ignored the show cause notice by the apex Court and its likely repercussions.
However, investors may choose to on the sidelines amid uncertainty on the economic and political front, an analyst said adding that healthy cash dividends in frontline stocks could keep the local participants, particularly the retail investors active.
The KSE-30 index rose by 66.85 points to 12,692.31 points. KSE-100’s trading value increased by Rs693 million to Rs2.699 billion, from Rs2.006 billion. Market capitalisation saw an addition of Rs16 billion to Rs3.764 trillion, from Rs3.748 trillion.
The biggest gainer for the day was UniLever Pak, up by Rs148 to Rs8,548 but Uniliver Food showed the greatest fall by Rs65 to Rs2,825.
In the 291 stocks that were traded on Wednesday, 183 advanced, while 81 declined.
Among the volume leaders, KESC was on top with 18m shares, up by 81 paisa to Rs4.49. DG Cement rose by Rs94 to Rs47.26 on 6m shares. Maple Leaf Cement rose 42 paisa to Rs7.28 on 5m shares and Lafarge Pakistan edged higher by 9 paisa to Rs4.74 on 4m shares.
Hub Power Company declined by 47 paisa to Rs45.43 on 4m shares, Jah Sidd Co was up by 28 paisa to Rs14.73 on 3m shares, PTCL added 18 paisa to Rs13.97 on 3m shares, Quice Food (right) again hit the upper limit of Re1 to Rs3.24 on 3m shares,
Adamjee Insurance shot up by Rs2.51 to Rs68.81 on 2m shares and Fauji Fertiliser soared by Rs3.04 to Rs116.38 on 2m shares.

KSE-100 index to adopt free-float methodology
KARACHI: Karachi Stock Exchange (KSE) is planning to shift KSE-100 Index to free-float methodology shortly with an objective to make KSE indices more qualitative and in line with global standards.
The KSE-100 Index is currently being computed using full market capitalization weighted methodology. A market capitalization based index maintained by KSE, it was introduced in 1991 and comprises 100 companies selected on basis of sector representation and highest market capitalization, which captures over 85% of total market capitalization of the companies listed on the exchange.
In view of its wide acceptance among investors KSE-100 is granted to be pulse of Pakistans stock market.
KSE has arranged a presentation on August 9, 2012 in its auditorium which will outline modalities of Free-Float Migration, benefits for members, investors, Fund managers and its implications.
Company News:
1) Privatised KESC makes maiden profit: KARACHI, Aug 8: The Karachi Electric Supply Corporation (KESC) posted net profit for the financial year June 30, 2012 at Rs2.6 billion, which translated into earning per share (eps) at Re0.11. It represented a complete turnaround from net loss of Rs9.4 billion or loss per share at Rs0.39 the previous year.
The results were announced at the stock exchange at nearly the fag end of trading session. The sudden surge in fortune for the power utility, gave investors a pleasant shock.
Over the years, consumers and investors have loved to hate the power utility that doesn’t provide uninterrupted power to consumers and instead of disbursing dividends has kept asking shareholders for cash in right issues as a matter of yearly ritual.
The results were, therefore, greeted warmly by the investors, who carried the price of the KESC stock up by 81 paisa to Rs4.49 on a huge turnover of 18 million shares. The volume of business in the KESC stock accounted for nearly a quarter of all shares traded at the bourse on Wednesday.
The accounting figures showed that earning before interest, tax, depreciation and amortisation (EBITDA) amounted to Rs17 billion and reflected five-fold rise from Rs3.5 billion the previous year.
A cursory glance at the figures showed that the major item that pushed the utility into profitability was the ‘tariff adjustment’ that shot up by to Rs70 billion for the latest year, from Rs45 billion last year.
Revenue grew to Rs93 billion, from Rs86 billion. Expenses incurred in generation, transmission and distribution were lower by Rs1 billion to Rs13 billion for 2012, from Rs14 billion last year, which could allude to a slight reduction in Transmission and
Distribution (T&D) losses that has been the bane of business for the power utility.

In a statement released by the KESC, CEO Tabish Gauhar seemed to exude enthusiasm: “Seven years after privatisation, KESC has achieved an important milestone of becoming a profitable entity.”
The power utility chief stated that during the seven years, KESC had witnessed “an unprecedented $one billion shareholders equity investment, major overhauling of its technical resources, wide ranging capacity, efficiency improvements and an effective management.” He contended that those much needed interventions had enabled KESC to get back on the sustainability track.
Gauhar conceded that the profit of Rs2.62 billion seemed insignificant when compared with the financial investments made.
Yet, he said, it represented a step towards ‘sustainable future’.
The CEO observed that during the last few years, KESC was successful in arranging substantial funds for its development project from IFC, ADB, OEKB and other local financial institutions.
“That coupled with the capital injection has enabled KESC to add over 1000 megawatts of new and efficient generation capacity and significantly enhance its transmission and distribution capacities,” he said, but made a claim that at least the consumers were likely to take with disdain: “Efficiency gains have really helped the company improve its operating performance over the last few years.”
Gauhar said that the jump out of the red was significant as lenders, investors and business partners would have greater faith in KESC’s ability to deliver. And that in turn would help KESC position itself favorably in the investors’ community and help the utility generate funds for future mega projects.
Gauhar identified those projects as coal conversion and new coal fired projects. But the best of the statement was in the end: “We will continue to focus on reduction in cost of generation, reduction in distribution losses and improvement in our quality and service to our customers,” the KESC CEO said.

2) MCB Bank declares dividend: KARACHI, Aug 8: The Board of Directors of MCB Bank has declared second interim cash dividend of Rs4 in addition to first interim of Rs3 already paid, the bank said in a statement.
The bank posted outstanding results in first half of this calendar year with 7 per cent increase in both profit before tax of Rs17.2 billion, and profit after tax of Rs11.3 billion while non-markup income increased by 25 per cent to Rs5.2 billion and net markup income was reported at Rs20.9 billion.—PPI
3) SECP registers 315 companies: ISLAMABAD, Aug 8: The Securities and Exchange Commission of Pakistan (SECP) registered 315 companies in July, which is an increase of almost 10 per cent compared to 288 companies registered in the corresponding period of previous year.
The new incorporations during the month include 257 private, followed by 19 single-member, 4 public unlisted companies, 5 non-profit associations and one company each as foreign company, limited by guarantee under Section 43 and trade
organisation.

The services sector has the highest new incorporations: 43, followed by trading with 36, construction with 27, Hajj and Umrah services with 23, food and beverages with 16, IT with 15, education with 14, communications with 11 and tourism with 10 companies.
The highest company incorporation was witnessed at the Company Registration Office (CRO) in Lahore: 110, followed by Islamabad and Karachi CROs registering 80 and 70 companies respectively. The remaining CROs of Peshawar, Multan, Quetta and Faisalabad registered 12, 7, 6 and 3 companies respectively.
The authorised capital and paid-up capital of 315 companies is Rs3.06 billion and Rs459m respectively. During the month, 98 companies increased their authorised capital with the aggregate authorized capital increment of Rs4.70 billion and 117 companies raised their paid-up capital with the total paid-up capital increment amounting to Rs11.88 billion.
4) Inquiry against PSO begins: ISLAMABAD, Aug 8: The Competition Commission of Pakistan (CCP) has began a probe into allegations that the Pakistan State Oil (PSO) is forcefully selling lube oil to its cartage contractors by deducting the price of such products from the payments due for cartage services.
The inquiry was initiated after the commission received several complaints from some PSO cartage contractors.
Given the potentially anti-competitive nature of such actions, CCP has started to probe the matter in detail and solicited PSO’s response in the matter. However, despite a reminder, the reply is still awaited.
Forced sale of products may constitute an anti-competitive practice prohibited by the Competition Act, 2010.
The practice of forced sales, which places unrelated obligation on trading parties for the conclusion of contracts, is barred under law and can amount to a prohibited agreement/practice or an abuse of dominance under the Act.
It would be pertinent to mention that CCP has consistently strived to promote competition and curb anti-competitive behavior in Pakistan economy.
MOHAMMED SALEEM MANSOORI

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