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Wednesday, 29 August 2012

STOCK MARKET UPDATE: 30.08.2012



STOCK:
Karachi Stocks  Up 74.23  Points:
KARACHI, Aug 29: The KSE-100 index was at 15224.54, Up 74.23 points.  (Today: 11.10  am)

August 28, 2012
5 TOP GAINERS  &  LOOSERS:

Rafhan Maize
Rs 100.00
Colgate Palmolive
Rs (57.23)
Nestle Pakistan
Rs 48.00
Mithchells Fruit
Rs (13.00)
Bata Pakistan
Rs 47.98
Sanofi-Aventis
Rs (11.88)
Indus Motor Com
Rs 8.47
Tri Pack Films
Rs (5.67)
Pak Gum & Chem
Rs 8.44
Clariant Pak
Rs (5.50)

KSE-Profit-taking shaves off 83 points
KARACHI, Aug 29: The bears charged on the Karachi stock market on Wednesday knocking off 83.17 points from the KSE-100 index, which settled at 15,151.31 points.
Most market participants did not express distress, saying that it was only natural that the investors should resort to profit-taking, following gigantic gains of 200 points in the last two trading sessions.
The market started out on a dismal note for there was not much to cheer either in the news bag or the incoming corporate results.
The sentiments were further dampened by the news that the Competition Commission of Pakistan had some reservations on the development related to ICH (international clearing house), which sent shares in telecommunication sector especially PTC spinning down, which hit the lower lock. The selling soon spread to other sectors.
For all the enthusiasm of the brokers and traders, some signs were ominous: The steep drop of 100 million shares or 32 per cent in volume to 204 million shares on Wednesday, compared to 312 million shares traded the previous day. Trading value dipped by Rs3.07 billion to Rs4.208 billion, from Rs7.225 billion the previous day.
Yet the more worrisome issue noted on Wednesday was the closing of index below the day’s lowest level of 15,127.91 points.
That made many wonder if the market was set to slide. However, most market participants took the decline for the day in stride.Ahsan Mehanti at Arif Habib Corp said that the stocks closed lower on profit-taking post major earning announcements at KSE. Consolidation in blue-chip stocks, uncertainty in global stocks and commodities, security concerns in the city and concerns for rising circular debt played a catalyst role in bearish sentiments at KSE.
Hasnain Asghar Ali, COO at Escorts Capital, stated that despite the automated roll-over window for future trades, the bulls in order to catch a breath took the overlapping period as an excuse for allowing technical adjustment. Consolidation was noted in
some frontline stocks which had given out satisfactory stock and cash dividends while other stocks rallied in anticipations of healthy corporate profitability.

Traders could continue to enter into short term based while the funds capitalising on the opportunities surfacing due to availability of stocks on deeper discounts could pick up stocks, letting index rise higher.
However, law and order situation along with economic and financial vulnerability coupled with political volatility were impediments.
Among the 317 stocks that came up for trading on Wednesday, 177 were losers, 113 gainers and 27 closed unchanged.
Market capitalisation fell by Rs23 billion to Rs3.861 trillion, from Rs3.883 trillion on Tuesday.
The biggest losers for the day were Colgate Palmolive, down by Rs57.23 to Rs1296, followed by Mitchell’s Fruit Farms lower by Rs13 to Rs360. The two big gainers included Rafhan Maize up by Rs100 to Rs3,885 and Nestle Pakistan higher by Rs48 to
Rs4,050.

Again bulk of the volume was noted in small cap stocks, with trading in seven stocks out of 10 priced below their par value.
PTCL which had been the maximum gainer for several days reversed its role to touch the minimum low of 91 paisa to Rs16.38 on 34m shares.
Pace (Pakistan) rose by 33 paisa to Rs3.10 on 16m shares, Telecard Limited shed 23 paisa to Rs2.44 on 15m shares, WorldCall Telecom slipped by 45 paisa to Rs2.71 on 12m shares and TRG Pakistan slid by 7 paisa to Rs4.04 on 11m shares.
NIB Bank was lower by four paisa to Rs2.40 on 10m shares, Jah Sidd Co was up 13 paisa to Rs15.60 on 8m shares, Fauji Cement slipped 18 paisa to Rs6.71 on 7m shares, D.G. Khan Cement added 30 paisa to Rs52.10 on 7m shares and Treet Corp (ROL) was
up by 21 paisa to Rs2.73 on 6m shares.


Karachi Stock Exchange  appoints Market Maker
KARACHI, Aug 29: The Karachi Stock Exchange took a step forward in promoting the derivatives market by appointment of Market Maker (MM) in Stock Index Futures.
At a press conference held on Wednesday, KSE Managing Director Nadeem Naqvi explained the modalities, terms and conditions of the Market Making Agreement signed with the brokerage firm, AKD Securities Ltd. The bourse had accepted the role of MM in KSE-30 based Stock Index Futures. It had also committed to execute a minimum of 100 contracts daily and up to 500 contracts within six months.
The KSE MD said that Stock Index Futures Contracts were launched as the central element of derivatives segment, yet the lack of liquidity was the biggest hurdle in their development, which included Cash Settled Single Stock Futures and Stock Index Futures. The MM would provide and execute the above mentioned contracts with quantum in value traded expected to grow more than five-fold to Rs32.5 million per day, from Rs 6.5 million per day in six months’ time. He said that the bourse hoped to introduce ‘options’ in the next phase.
Present on the occasion, AKD Securities CEO Farid Alam discussed the role of MM in detail. He said that the MM would be useful for speculators; hedgers and arbitragers. While volatility would be reduced, volumes would take a leap, he said.
Naqvi said that the Securities and Exchange Commission of Pakistan (SECP) had provided supportive role and expressed gratitude from KSE to the Commission for granting approval for wavier of basic deposits in Stock Index Futures and Cash Settled Single Stock Futures.
“The SECP had also approved regulations governing Exchange Traded Funds (ETFs), rightsising of margining regime for (Margin Trading, Stock Lending and Borrowing) and approving pro market amendments in regulation of governing Market Making at
KSE, in the best interests of Capital Market Development in the country,” he said.

In regard to other developments, the KSE MD said that Lahore Stock Exchange’s (LSE) request to allow KSE-30 Index based Futures trading at Lahore Stock Exchange was approved by the KSE Board. The KSE and Bombay Stock Exchange (BSE) were in advanced stage of talks over cross listing of indices on Futures Contracts. The recent circular from the Reserve Bank of India (RBI) allowing Pakistani individual and corporates in Indian company shares was a welcome development and should help in accelerating the cross listing process between KSE and BSE, he said.
“Discussions with Dubai Financial Market (DFM) and Abu Dhabi Securities Market for cross listing of benchmark indices had also taken place,” Naqvi stated, adding: “liquidity begets liquidity”.
He mentioned that the biggest challenge in derivatives had always been to kick start the market. Citing the Indian example, he stated that those markets took half a decade and their derivative market remained moribund until BSE appointed Market Makers.

Company news:
ICI profit falls: KARACHI, Aug 29: ICI Pakistan posted after tax profit at Rs462 million for the half year ended June 30, 2012, representing earning per share (eps) at Rs5 per share.
The board which met on Wednesday declared interim cash dividend at Rs3.50 per share. The earnings were down by 52pc over the similar period last year. Operating results for 1H12 at Rs748 million were lower by 32pc over the corresponding six months of the previous year “mainly due to reduction in unit gross margins in the PSF business because of lower demand and margin shrinkage across the entire polyester chain,” ICI said on Wednesday.
The company said that rising cost of alternative fuels resulted in additional cost of Rs348m compared to same time last year. “In addition, the company also incurred a one-off expense of Rs124m relating to demerger of Paints business”, ICI said.

MOHAMMED SALEEM MANSOORI

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