STOCK MARKET UPDATE: 28.11.2012

STOCK

Karachi Stocks Up 94.29 Points:
KARACHI, Nov 27: At the close of trading, the KSE-100 index was at 16,364.77, up 94.29 points. 

(Today Market is 137.11 Up @ 12.01 pm)

November 27, 2012

 5 TOP GAINERS  &  LOOSERS:

Unilever Food	Rs 190.00	Linde Pak	Rs (3.38)
Bata Pak	Rs 74.55	Noon Pak	Rs (2.28)
UniLever Pak	Rs 50.00	Liberty Mills	Rs (2.25)
Island Textile	Rs 35.50	Shifa Int’l Hospital	Rs (2.00)
Fazal Textile	Rs 10.40	PICT	Rs (1.81)

Bulls toss KSE 100-index to new high

KARACHI, Nov 27: Stocks galvanized at the stock market on Tuesday, with the fiery bulls tossing the KSE-100 index up by 94.29 points to all-time high at 16,364.77 points.
The Pakistani equity market which has already reaped an enviable return of 46 per cent in the current year continues to outperform all major world and regional markets. Yet there are no signs of abatement in market’s relentless climb.
Traders said that the sharp spurt in stock prices on Tuesday was seen across-the-board with cement and textile scrips in the forefront.
Unlike the past several weeks when side board or second and third tier scrips had continued to dominate day’s trading, shares on other heavy-weight counters such as oil and gas also came up for brisk buying on Tuesday.
Attock Petroleum and Pakistan State Oil were in the limelight which saw upward spiral in prices by Rs8.30 and Rs7.79, respectively. The market volume increased by 22 per cent to 318 million shares on Tuesday from 260 million shares the previous day and the trading value jumped by 87 per cent to Rs6.9 billion from Rs3.7 billion.
“The day proved to be investors, traders and brokers’ delight,” said a market guru who asked not to be waylaid by the KSE-100 index. “There are scores of stocks that are still very much under-valued and a further climb cannot be ruled out,” he said.
Yet the timid and the nervous investors were caught between the greed to amass gains and a deep feeling of unease at such dizzy heights. Even the analysts espousing caution since last week, were bewildered by the strong market gains on Tuesday.
Some thought it could be late buying triggered by investors’ relief as the Muharram holidays passed off generally in peace.
Foreign investors bought equities in the net sum of $0.80 million on Tuesday, taking the current month portfolio investment to $29.7 million. Among the local participants, mutual funds decided to take profit through sale of $3.58 million worth shares. Individuals were net buyers of stocks valued at $1.5 million.
Analyst Hasnain Asghar Ali stated that with various front line stocks still trading at attractive levels the local equity market was likely to invite fresh flows both from local and off-shore corridors.
Equity dealer Samar Iqbal stated that renewed buying was seen in cement stocks amid expectations of earnings growth in quarter ended Dec over the earlier quarter. The dealer attributed rejuvenation in textile stocks to improving margins.
Commentator Ahsan Mehanti said that the higher textile sector exports on EU relaxations and speculations on rate cut ahead of SBP policy to be announced next month played a catalyst role in bullish sentiments at KSE despite concerns for higher fiscal deficit and lower banking spreads.
The news flow was mixed; the central bank noted that the repatriation of dividends and interest income outpaced the inflow of investments made by the foreigners in the first four months of the current fiscal year exerting pressure on already dwindling foreign exchange reserves.
On the other hand, the Planning Commission of Pakistan released Rs90.4 billion under its Public Sector Development Programme (PSDP) for infrastructure development and social sector projects.
The market value of all 573 listed stocks (market capitalisation) stood at Rs4.1 trillion on Tuesday. The margin between the gainers and losers was narrow with 195 stocks closing in green and 179 in the red.
Among the 10-top traded stocks, Fauji Cement charged from the front with volume of 32 million shares, down 13 paisa to Rs6.90. The monopoly utility provider KESC saw turnover of 28 million shares, up by 73 paisa to Rs6.56. The third and fourth slots were also taken by cement stocks as D.G. Khan Cement with volume of 20 million shares gained Rs1.96 to Rs55.40 and the second-tier Maple Leaf, after fluctuating wildly, settled at Rs16.61 on 16 million shares, adding 17 paisa to the stock’s overnight value.

KSE hits record high on rate-cut hopes

KARACHI: Stocks rose to a record high near 16,400 points on Tuesday, driven by a spike in cement stocks and expectations that the central bank will cut rates at next month's meeting.
The Karachi Stock Exchange's (KSE) benchmark 100-share index surged to a record high of 16,375.36 in intraday trading. It closed at 16,364.77, up 0.58 percent or 94.29 points from the previous session.
"Renewed buying was see in cement stocks amid expectations that their December results would be better than the last quarter," said a dealer.
The market also found support from expectations that the State Bank of Pakistan will cut its discount rate at next month's monetary policy meeting.
D.G. Khan Cement rose 3.65 percent, or 1.95 rupees, to 55.39 per share, while Karachi Electric rose 12.01 percent, or 0.70 rupees, to 6.53 per share. (Reuters)
Company news:
PSO sets sights on place in Fortune-500: ISLAMABAD, Nov 27: Pakistan State Oil plans to convert itself into a fully integrated energy firm starting from oil and gas production, shipping, refining and transportation and stop signing fresh contracts for furnace oil supplies for power sector.“Within two years, PSO would become the country’s number one company, turn into a regional player in four years and become a global Fortune-500 firm in six years to trade internationally,” PSO Chief Executive and Managing Director Naeem Yahya Mir said at a news conference on Tuesday.
He said despite being the country’s largest fuel supplier and market leader, PSO currently operated in a very limited area of marketing where profits were saturated because distribution and marketing sector earned only less than 20 per cent of the entire supply chain.
Mir explained that oil and gas exploration companies earned over 60 per cent of profits as production cost hovered $1-$3 per barrel of crude oil that was being sold at $110 barrel per barrel. Shipment industry made another 8 per cent of the revenue, followed by 12 per cent by refining sector and 20 per cent by marketing and distribution sector.
He said the leading state-oil companies of the world like Petrobras, Petronas, Petrochina and Indianoil had become global players because they were integrated oil companies with control over the entire supply chain from crude and gas production to separation of liquid gas, LNG, exports through tankers and pipelines, supply to retail network, storage and refining.
He said PSO had decided not to enter into fresh contracts for furnace oil supplies because furnace oil was a waste of energy.
“Pakistan’s power sector is using 180cs fuel that is of very poor quality, not used anywhere in the world, despite losing up to $80 per ton. We have to convert to 380cs fuel that has better viscosity and output, by improving blending and ultimately setting up modern refineries,” he added.
He said Pakistan’s entire refining sector was obsolete and outdated that was developed in 1960s and their configuration was causing enormous losses to the country.
Pakistan’s refineries produced only 90 per cent value of the crude which needs to be dismantled and modified.
“We have to enter into entire supply chain from production to refining, shipment and transportation to reduce cost of production”, he said. Under the same model, the PSO had recently signed a contract with Pakistan National Shipping Corporation for a joint business model under which PSO would bring crude from abroad only through PNSC.
He said Pakistan imported 6.6 million tons of furnace oil, 3.5 million tons of high speed diesel and 1.5 million tons of motor spirit which would convert PNSC into a mega firm if it was able to cater to PSO’s shipments.
He said as an international professional, he did not mind if some people make money out of shipping business but this money should go into the hands of Pakistani companies and citizens instead of flowing it into the pockets of foreign firms and individuals.
Mir, who had worked Kuwaiti oil firms at senior positions for more than two decades, said Pakistan made a big mistake 15 years ago when it entered into contracts with Kuwaiti firms for delivery of oil in Pakistan unlike India that ensured delivery of oil at Kuwait ports and utilised its own, although poorly managed ships for shipment to India.
Resultantly, as Pakistan kept on losing foreign exchange to foreign firms for oil shipments, India developed its shipping industry to a stage that its professionals ruled the global energy firms.
“Recently PSO invited proposals for consultants and received four bids from top global firms all having Indian consultants”.
He said the PSO would set up its own refinery in Khyber Pakhtunkhwa where fresh discoveries of crude oil were coming up and establish a huge storage facility at Hub in Balochistan through a joint venture with a Middle Eastern firm for strategic diversion of oil supplies from Port Qasim where facilities were congested.
Responding to questions over recent deals for fuel supplies without tending and bidding process, the PSO chief claimed no violation of rules had been committed but said “the public procurement rules are bottlenecks and you need flexibility for faster development”. Explaining, he said the application of PPRA rules were benefiting only cartels of select players.
Giving two examples, he said he did away with application of ‘war premium insurance’ that was an unnecessary add-on insurance cost that should apply only in case of closure of the straits of Hormuz or India moved its forces to Pakistani borders which was not the case at present. This would provide a saving of about Rs450 million annually.
Likewise, four contractors were designing PSO contracts for a specific product of petrol involving additives like oxygenate that was not required in Pakistan.
He said he had removed the condition that would provide a saving of about 15 paisa per litre of petrol and Rs600 million per annum.
He said Pakistan imported low quality 87Ron petrol and paying extra premium on that despite the fact that better quality 91Ron petrol was available cheaper and more firms were ready to supply without premium.
ICIBL services: LAHORE, Nov 27: Invest Capital Investment Bank Ltd (ICIBL) has planned to start car financing as well as leasing services for small and medium enterprises.
Talking to journalists, banks CEO Khawaj Naveed said on Tuesday that the present management of the bank had successfully brought ICIBL back to growth track.
In 2010 and 2011 respectively, the bank had declared Rs2.69, and Rs1.53 EPS losses. It managed to declare 0.03 paisa EPS during the last quarter of 2012.
Mr Naveed said that Zahidjee Group had acquired the major shareholdings and management control of the bank from July 2011 with 56.80pc shareholdings.

Resume: Asim Textiles shares trading restored

MOHAMMED SALEEM MANSOORI