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Wednesday, 5 December 2012

STOCK MARKET UPDATE: 06.12.2012



STOCKS
Karachi Stocks Up 57.11 Points:
KARACHI, Dec 06: The KSE-100 index was at 16732.81, up 57.11 points. (@ 12.27 pm today)

December 5, 2012
 5 TOP GAINERS  &  LOOSERS:

Mithchells Fruit
Rs 17.50
Indus Dyeing
Rs (30.00)
Shezan Int’l
Rs 6.96
Sanofi Aventis
Rs (18.00)
Salfi Textile
Rs 5.84
Bhanero Textile
Rs (9.50)
IGI Insurance
Rs 4.58
Exide Pak
Rs (9.00)
Engro Foods Ltd
Rs 4.34
Blessed Textile
Rs (5.85)
Stocks add 26 points to overnight gains
KARACHI, Dec 5: Stocks ended at a new record high on Wednesday amid hopes of a cut in interest rates. However, pressure was witnessed once the index reached 16,700 points as investors opted to book profits, brokers said.
The Karachi Stock Exchange (KSE) 100-share index ended 0.15 per cent, or 25.55 points, to record high of 16,675.70 points.
The index made an all-time high at 16,700.02 but could not sustain those levels.
Turnover, however, increased to 234.13 million shares, compared with 193.05m shares traded on Tuesday. Trading value also rose to Rs5.6 billion from the previous day’s value of Rs4.9bn.
Market capitalisation stood at Rs4.178 trillion, compared with the previous session’s Rs4.17tr.
“Index closed at highest close, led by oil and banking stocks amid speculations ahead of SBP policy rate announcement next month,” said Ahsan Mehanti of Arif Habib Ltd.
Consumer price index for November stood at 6.93 per cent year on year, down 0.39pc, month on month, depicting a deflationary trend, which has raised hopes that the central bank will continue to loosen its monetary policy when it meets this month.
Analysts are expecting a cut of at least 50 basis points to 9.5pc.
“Selling in PTCL (Pakistan Telecommunication Co Ltd) after PTA withdrew its previous notification regarding Suspension of Interconnection Circuits was the main limelight of today’s trading. Similarly FCCL (Fauji Cement) also remained under pressure after sponsors intimated that they have sold 330m shares in the market. On the other hand, Engro Foods closed at upper limit, thanks to institutional buying,” said Samar Iqbal, a dealer at Topline Securities Ltd.
According to reports, Fauji Foundation has sold 330m shares of Fauji cement so far.
The energy sector, which was the star performer on Tuesday, may remain under pressure as heavy weight Oil and Gas Development Co Ltd shed Rs1.17 to Rs188.99, Pakistan Oilfields fell 18 paisa to Rs422.08 and Pakistan Petroleum Ltd ended 57 paisa lower at Rs175.77.
Foreign investors sold shares worth a net $1.03m on Wednesday, compared with buying equities worth a net of $1.457m the previous day, bringing the total for the month to a net outflow of $1.19m. Banks were the major sellers in the market as they sold equities worth $5m.
The biggest gainer was Mitchells Fruit which rose Rs17.50 to Rs367.50, followed by Shezan International which ended Rs6.96 higher at Rs446.96.
Indus Dyeing witnessed the biggest loss for the day as it shed Rs30 to Rs590 followed by Sanofi-Aventis Pak which shed Rs18 to close at Rs357.
The KSE-30 index ended 0.12pc, or 16.01 points, higher at 13,503.65 and out of the 369 companies traded, the value of 164 increased, 193 decreased while 12 remained unchanged.
Among the 10-top traded stocks, PTCL fell 87 paisa to Rs17.01 on turnover of 27.19m shares, Jahangir Siddiqui Co Ltd gained 29 paisa to Rs18.77 on 23.92m shares and Lotte PakPTA gained marginally by 3 paisa to Rs7.23 on 16.63m shares.
Fauji Cement ended lower by 89 paisa at Rs6.82 on 14.22m shares, Byco Petroleum gained 65 paisa to Rs10.67 on 8.25m shares and Telecard Ltd ended 31 paisa lower at Rs2.51 on 7.94m shares.
Azgard Nine gained 7 paisa to Rs8.68 on 7.66m shares, Engro Foods Ltd closed Rs4.34 higher at Rs91.30 on 6.74m shares and Engro Polymer rose 44 paisa to Rs11.06 on 6.05m shares.
SuiNorth rose Rs1.24 to Rs26.18 on 5.98m shares.
Stocks at KSE attain new peak: KARACHI: The prices of equities at Karachi Stock Exchange (KSE) hit a record high for the second straight session, supported by arise in shares of Engro Foods and gas companies on Wednesday.
The Karachi Stock Exchange's (KSE) benchmark100-share index surged as high as 16,699.54 in intraday trading. It closed at 16,675.70, up 0.15 percent or 25.55 points.
The market has hit record highs in six of the last seven sessions, and was up 25 percent since mid-June.
Jahangir Sidiqui rose 1.57 percent, or 0.29 rupee, to 18.76 per share, while Engro Foods was up 4.99 percent, or4.34 rupees, to 91.30 per share.
PTCL fell 4.86 percent, or 0.87 rupees, to17.04 per share.
"Institutional buying supported Engro ... and banks gained on hopes of better-than-expected results," said a stock dealer.
The market also found support from expectations that the State Bank of Pakistan will cut its discount rate this week after government data showed inflation under control.

Company news:
Fauji Foundation sells 330m Fauji Cement stock: KARACHI, Dec 5: The Fauji Cement offer of 638 million right shares, to shareholders at discount of 50 per cent (at Rs5 for the par value of Rs10) may have now brought windfalls for the parent company– Fauji Foundation.
The offer at 92 per cent was to be subscribed or renunciated by the shareholders by June 20, 2011. It was hugely under-subscribed. Figures available show that the individual shareholders opted for only 14,000 shares, paying Rs572,000.
Fauji Foundation itself took up 172 million shares, which amounted to 20 per cent of the offer. Yet as underwriters to the issue, Fauji Foundation, was obligated to pick up all the unsubscribed right shares, which amounted to a huge 465 million shares or 73 per cent of the offer. Including its own subscription, it meant Fauji Foundation having to saddle itself with almost 99 per cent of the shares on offer. It must have been painful for the Fauji Foundation at such a setback to its right issue. Instead of raising capital from the market for its new plant, the company had to convert its own cash into equity.
But that was June 2011, when investors’ sentiments in stocks were at low ebb. For the year 2010-11, the KSE was also able to mobilise comparative tiny funds amounting to Rs31 billion, which stood down to the lowest in seven years. The average traded price of the Fauji Cement stock in 2011 was at heavy discount–at Rs5.54. Besides the dullness of the stock market, the Fauji directors also preferred retention over distribution of profit to shareholders. As a result, the company had skipped payout in all the years, after paying Rs1.50 for the year 2006.
“Due to heavy investment in construction of new line, the company has not declared dividend for shareholders,” directors stated in their annual report for 2011.
With the turn of tide and a bull onslaught at the Pakistani capital markets, the KSE index of 100 shares has climbed to currently dodder at its all-time high 16,600 points and the stocks have this year to-date yielded fabulous return of 49pc, easily performing all regional and global equity markets. The retail and small investors in equities have been dangerously and indiscriminately dabbling in second and third tier scrips (penny stocks) which has triggered widespread trading in all sectors across the board. The share in Fauji Cement stock has climbed to Rs6.90; its high price was Rs7.40 in 2012.
A cursory glance at the current holdings show that Fauji Foundation has sold 330 million shares, since the beginning of the bull run. It is for that reason that in most trading days, Fauji Cement ranks among the three top traded scrip on the Karachi Stock Exchange.
What might have seemed a junk for the shareholders who decided to renunciate the 2011 huge right issue offered at half the face value, appears to have brought big bonanza for Fauji Foundation, which at the time of the offer was constrained to pick up the unsubscribed right. Even at the selling price difference of a rupee, Fauji Foundation could have made Rs330 million on profit-taking in offloading part of its huge holdings.
Fauji Cement Company is located at Jhang Bhatar, district Attock. The company claims to be a leading producer of the Pakistan Cement Industry and a major concern of the Fauji Foundation. Incorporated as public Limited Company, it started operations in 1997. For the last two years, June 30, 2011 and 2012, Fauji Cement recorded profit after tax at Rs 426 million (earning per share: Re0.52) and Rs553 million (eps:Re0.29). Total assets of the company amounts to Rs 14 billion.

MOHAMMED SALEEM MANSOORI

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