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Wednesday, 15 August 2012

STOCK MARKET UPDATE: 16.08.2012



STOCK:
Karachi Stocks Up 21.65 Points:
KARACHI, Aug 16: The KSE-100 index was at 14992.58, up 21.65 points. (today 11.49 am) 

August 15, 2012
5 TOP GAINERS  &  LOOSERS:

Unilever Food
Rs 137.50
Mithchells Fruit
Rs (12.50)
Colgate Palmolive
Rs 66.00
Exide Pakistan
Rs (10.73)
Siemens Pakistan
Rs 30.00
Atlas Battery
Rs (7.82)
Indus Dyeing
Rs 13.67
National Foods
Rs (6.00)
Sanofi-Aventis
Rs 10.00
Linde Pakistan
Rs (4.99)

Pakistan stocks hit four-year high; rupee strengthens
ISLAMABAD: Pakistan’s main stock market closed at a four-year high on Wednesday as investors cheered the central bank’s decision to cut its key policy rate, dealers said.
The Karachi Stock Exchange benchmark 100-share index gained 58.95 points, or 0.4 per cent, to close at 14,970.92, its highest close since April 2008. The volume of shares traded was 135.996 million.
“The positive trend in the market is because of the cut in the discount rate by the State Bank (of Pakistan) last week,” said Shuja Rizvi, a trader at Al-Hoqani Securities.
“The rise we saw today was a continuation of the rally on Monday.”
The State Bank of Pakistan in its monetary policy announcement on Aug 10 lowered its key policy rate from 12 per cent to 10.5 per cent.
In the currency market, the rupee strengthened slightly to close at 94.32/39 to the dollar, compared with 94.42/48 on Monday. Financial markets in Pakistan were closed on Tuesday for the Independence Day holiday.
Overnight rates in the money market closed lower at 8.50 per cent, compared with 10.40 per cent on Monday.

KSE- Index gains 59 points at 14,970.93
KARACHI, Aug 15: Shares continued to add value on the Karachi Stock Exchange, where the KSE-100 index gained 58.96 points to close at 14,970.93 points on Monday.
Market participants continued to celebrate the hefty cut of 1.50 per cent in policy rate by the SBP in its monetary statement last week.
Stock broker Haji Ghani Haji Usman lauded the central bank’s decision, saying that it would help improve liquidity and enable companies to raise finances.
The index now just a stone’s throw from the coveted 15,000 level, many market players were sanguine that the market could cross the mark in next couple of sessions.
The silence on the political front was a relief and major companies had started to issue, generally cheerful quarterly results.
On Monday the big event was the much-awaited results of Lucky Cement.
Contrary to the concerns of many analysts that the company may not be able to spare cash for dividend, Lucky announced Rs6 per share and a huge improvement in top and bottom line.
Other results were also mainly positive. Traders said that with nothing else to distract their attention, investors were just watching the results and payout, which was why KESC that posted the first profit for the latest quarter again stood the second among volume leaders and the two other main active cement shares DG Khan and Lafarge followed with brisk activity.
Among the local participants, mutual funds bought equity worth $3.76 million, while individuals were major sellers.
Mohammad Rizwan, Senior Manager Equity Sales at Topline Securities, commented that despite last days of Ramazan, volumes remained healthy, particularly in cement stocks as leaders, since investors’ continue to show interest in the stocks that are expected to stand as the chief beneficiary of the significant discount rate cut by the central bank.
Other factors that boosted investors’ confidence were improving relations with US and decreased political noise.
Ahsan Mehanti at Arif Habib Corp stated that the bullish activity continued on strong valuations after SBP slashed discount rates by 150bps in policy announcement on August 10. Strong earnings announcement by Lucky Cement renewed foreign interest in blue chip stocks. It played a catalyst role in bullish sentiments despite fall in global stocks and commodities on weak economic data.
Hasnain Asghar Ali COO at Escorts Capital stated that while the gains continued to come in mainly in E&P sector stocks turnover failed to match the pace set by low priced stocks, such as the Fauji Cement and KESC.
Various other stocks from lower tier categories besides providing trading opportunities to the active participants, added volumes, thus keeping the market men active throughout the session.
Deep discounts may offer opportunities mainly to the new entrants and even the existing investors who might want to shift from fixed income securities.
Judicial hearings have already kept the likely entrants cautious, in case of confrontation as is being speculated the rise in volatility may disallow the momentum mainly on volumetric activity to continue, analyst said.
The KSE-30 index rose by 25.02 points to 12,885.03 points. Among the 294 stocks that came up for trading on Monday, 137 were gainers and 133 losers.
Turnover shrank a bit to 174 million shares, from 195 million shares traded last Friday.
Trading value stood down by Rs2 billion to Rs4.7 billion, from Rs6.7 billion and market capitalisation increased by Rs15 billion to Rs3.820 trillion, from Rs3.805 trillion.On the active list, Fauji Cement with volume of 40m shares stood ahead of the rest, gaining 39 paisa to Rs6.59.
It was followed by KESC with 25m shares, up by 73 paisa to Rs6.00. DG Khan Cement added 17 paisa to Rs49.34 on 16m shares; Lafarge Pakistan increased by 36 paisa to Rs5.01 on 14m shares; Jah.Sidd.Co slipped 37 paisa to Rs15.17 on 6m shares; PTCL rose by 47 paisa to Rs14.10 on 5m shares.
FDI falls 50.3pc in July
KARACHI, Aug 15: Foreign direct investment fell 50.3 per cent to $42 million in the first month of 2012-13, compared with $84.7 million in the same month last year, the central bank said on Wednesday.
Foreign private investment, which includes foreign direct investment and foreign portfolio investment, rose 28.2 per cent to $70.8 million in July 2012, compared with $55.3 million in July last year. FPI increased mainly due to a rise in foreign portfolio investment which received net inflows worth $28.8 million last month, compared with a net outflow of $29.4 million in July last year.
The country’s main stock index (KSE) has managed to restore back local investor confidence, which has led to an increase in volume in the previous few months, that has also helped Pakistan re-emerge on the radar of foreign investors.Total foreign investment, which includes foreign private investment and foreign public investment, totaled $91 million in July, compared with $56.4 million in the same month last year.
Out of the total foreign private investment, US was on top of the list, with an investment of $30.9 million, mostly coming from foreign portfolio investment, which stood at $26.7 million, followed by United Arab Emirates, which made an investment of $11.8 million in July.
Some outflows were also witnessed in July, as Sweden withdrew $5.1 million and UK withdrew $2.2 million.
The power sector had a net investment inflow of $2.1 million in July mainly in the thermal sector, compared with a net outflow of $4.8 million in the same month last year, while telecommunications witnessed a net outflow of $0.4 million.
The country’s worsening economic environment has put-off long-term investors especially with the prevailing energy crisis, while analysts said that the deteriorating law and order situation and political instability continued to be the biggest hurdles for FDI.

Company news:
1) Lucky Cement declares Rs6.78bn profit: KARACHI, Aug 15: Lucky Cement declared profit-after-tax (PAT) at Rs6.78 billion for the year ended June 30, which represented a hefty growth of 70.82 per cent over the earlier year’s net profit at Rs3.97 billion.
Earning per share (eps) jumped to Rs20.97 compared with Rs12.28 the previous year.
The board, which met on Monday, announced a cash dividend at Rs6 per share, which came as a pleasant surprise to many market participants who were expecting the company to skip cash and retain it for payment of purchase price of acquisition of ICI Pakistan.
A statement issued by the company stated that the profit was “highest ever” earned by the company.”
Net sales surged by 28.08pc to Rs33.323 billion from Rs26.018 billion in 2010-11.
The company attributed “record breaking” profit to higher sales volume in the domestic market coupled with better retention prices.
The local sales volume during the year registered a growth of 7pc to 3.72 million tons compared with 3.46 million tons last year.
However, export sales volume declined by 4pc from 2.25 million tons from 2.35 million tons mainly due to the “intentional focus” on the domestic market, which contributed the greater sum to the overall profitability of the company. The financing cost of the company took a sharp plunge to Rs253.23 million from Rs517.79 million, which helped produce healthy results.
The company stated that it undertook various capital expenditures which included new RDF/TDF plants and a new European origin Packing Plant for its Karachi Project. The alternative fuel (RDF/TDF) plants replaced up to 20pc of coal consumption with other cheap alternative fuels.
During the year, the project of electricity supply to Hesco was also completed whereby a grid station and 22km interconnection lines were installed, resulting in supply of electricity to Hesco with effect from July 1, 2012.
Lucky Cement also reported progress on its Joint venture investments for cement plant in DR Congo and grinding facility in Iraq.
During the year, the company also acquired approval of its shareholders for an investment of $ 4.0 million in 13.79pc share in 50MW wind farm project being set up by the group’s associated company, Yunus Energy Limited.
As a part of the group’s strategy to diversify its business interests, the company in consortium with other group entities acquired 75.81pc stake in ICI Pakistan, consisting of four segments of soda ash, polyester fiber, life sciences and chemicals, which, the company said, were integral to the economic fabric of the country.
The share purchase agreement was signed in Netherlands with the parent company of ICI Pakistan at a bid value of $152.50 million, payable in equivalent of rupees.
“The financing of this transaction has been planned in a manner to carry minimal debt on the books of the company,” the company statement said.

MOHAMMED SALEEM MANSOORI

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