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Tuesday, 8 January 2013

STOCK MARKET UPDATE: 09.01.2013



STOCKS
Karachi Stocks Up 143.11 Points:
KARACHI, Jan 08: At the close of trading, the KSE-100 index was at 16645.76, up 143.11 points.


(Today Market is 42.73 Up@ 11.32 am)

January 08, 2013

 5 TOP GAINERS  &  LOOSERS:

Millat Tractors
Rs 28.75
Siemens Pak
Rs (7.10)
Unilever Pak
Rs 25.01
PICT
Rs (5.62)
Sapphire Textile
Rs 9.22
JDW Sugar
Rs (5.43)
Pak Gum & Chem
Rs 7.00
National Foods
Rs (3.10)
Indus Motor Co
Rs 6.98
Biafdo Industries
Rs (3.06)
Stocks recover 143 points
KARACHI, Jan 8: Stocks recovered some ground on Tuesday as investors accumulated shares on attractive valuations and on hopes of strong corporate profits, which are due to be announced in the coming days, dealers said.
The KSE 100-share index ended 0.87 per cent, or 143.11 points, higher at 16,645.76 points. It traded in a relatively broad range as it made an intra-day high and low at 16,654.64 and 16,502.65, respectively.
But investors remained cautious and stood on the sidelines amid political uncertainty.
“Investors continued to remain wary from the uncertain political path ahead as volumes fell to 47-week low and remained confined to mid-capped stocks,” said Samar Iqbal, a dealer at Topline Securities Ltd.
Turnover decreased further to 86.79 million shares, the lowest since over 10.5 months, compared with 95.48m shares traded on Monday. But trading value rose to Rs2.69 billion from Rs2.41bn in the previous trading session, and the market capitalisation stood at Rs4.17 trillion, higher than Monday’s Rs4.13tr.
The market was supported by buying in heavyweight Oil and Gas Development Co Ltd which gained Rs1.90 to close at Rs189.40 and also MCB Bank which ended Rs3.30 higher at Rs207.98.
Dealers said investors were hesitant to indulge in fresh buying amid talks between Pakistani and International Monetary Fund officials.
The visiting delegation of IMF that has led to various speculations linked to the purpose of visit, that includes assessment of financial strength regarding pay back of SBA, coupled with volatility linked to million march did restrict the intra-day day traders as reflective in the overall volume that struggled to reach 100 million,” said Hasnain Asghar Ali from Escorts Capital Ltd.
According to reports, the Fund Mission led by Jeffrey Franks, is expected to analyse Pakistan’s ability and capacity to repay its outstanding loans to the Fund and other creditors without the possibility of a default.
However, foreign investors were active on Tuesday, buying on lower levels as they bought shares worth a net $1.71 million compared with buying shares worth a net $1.31m on Monday, bringing the total for this month to $22,789.61.
Companies were the major buyers in the market as they bought equities worth $1.44m. The biggest gainer was Millat Tractors which ended Rs28.75 higher at Rs603.75, followed by UniLever Pakistan which closed Rs25.01 higher at Rs10,000.
Siemens Pakistan witnessed the biggest loss as it shed Rs7.10 to Rs615 followed by Pakistan International Container, which fell Rs5.62 to close at Rs215.19.
The KSE-30 index ended 0.87pc, or 117.81 points, higher at 13,601.52. Out of the 319 companies traded, the value of only 237 increased, 58 decreased while 24 remained unchanged.
The second and third tier companies dominated the 10 most active traded stocks: Maple Leaf ended 83 paisa higher at Rs15.50 on turnover of 19.97 million shares, Askari Bank gained Rs1 to Rs18.84 on 6.52m shares and Byco Petroleum rose 24 paisa to close at 13.71 on 4.93m shares.
Jahangir Siddiqui Company Ltd ended 23 paisa higher at Rs15.11 on 4.76m shares, Nishat Chunian rose Rs1.38 pm Rs35.66 on 3.8m shares and Fauji Cement increased marginally by 6 paisa to Rs6.32 on 2.02m shares.
Bank of Punjab rose 12 paisa to Rs8.9 on 2m shares, TRG Pakistan gained 34 paisa to Rs5.42 on 1.9m shares and Fauji Fertiliser ended 40 paisa to Rs117.29 on 1.71m shares. NIB Bank ended unchanged at Rs2.4 on 1.55m shares.

Company News:
PPL to start drilling in Arabian sea: ISLAMABAD, Jan 8: The Pakistan Petroleum Limited, in collaboration with ENI, a foreign exploratory firm, is set to start drilling of a well in the Arabian Sea along Pakistani waters for discovery of oil.
The PPL has acquired exploration rights in a block located at 100km from Baghdad for oil exploration and it is hopeful about discovery of oil.
In a briefing to Senate Standing Committee on Petroleum and Natural Resources at the Parliament House, the PPL MD, Asif Murtaza, informed that drilling of exploratory well has already started in the block acquired in Iraq and there are bright chances of oil discovery.
In case of major success, the Pakistani company would benefit. The company is already working in Yemen on two blocks.
Regarding previous attempts made by the company to find oil from the sea, off Pakistani coast, the PPL MD informed the committee that in Mekran deep sea, some 12 exploration wells were drilled, but none succeeded.
The committee, which met with Senator Mohammad Yousuf in the chair, was informed that many foreign exploration companies still have interest in drilling of exploration well in Mekran Deep Sea. However, drilling has been delayed for one year due to various reasons.
Additional Secretary of Petroleum Naeem Malik informed the committee that drilling of an exploration well in deep-sea requires at least $100 million investment and foreign companies take decisions with due care.
The federal government recently announced new exploration incentives and the companies which would make first three discoveries in deep-sea would be given extra benefits with incentives to encourage more companies to come forward. The PPL MD informed that PPL is working in Zandan Block (Khyber Pakhtunkhwa) and is planning to acquire five more blocks in KPK as Tal Block area has great potential of discoveries.
To exploit un-conventional gas reserves in the country, some seven exploratory wells, eight appraisal wells, and 19 development wells have been planned in the next five years and the expected outcome would be 150bcf shale and tight gas production in the country.
He informed that shale gas and tight gas price approval has been sought from the regulator to speed up exploration activity. He further informed that some seven pilot projects have been planned for exploration of shale and tight gas reserves. He further informed that in Kirthar block, one exploratory well Rahman-1 is under way.
He informed that Hala, Kotri, Notari North, Jangshahi, Gambat and South blocks are potential areas for discovery of shale and tight gas reserves.
The committee was informed that PPL has geared up its seismic survey in the country and some 780sq kms were surveyed in 2011-12, while during the current fiscal year, some 1,400sq km have been surveyed.During the meeting, it was informed that District Kohlu (Balochistan) has huge gas reserves and due to law and order situation, exploration companies do not go there.
The committee was informed that the federal government was collecting 12.5 per cent royalty on gas production and the entire amount is transferred to provinces and if any provincial government is not spending the amount on welfare of its population or in the relevant district, where oil and gas have been found, it is their internal issue.
Nishat to set up subsidiary in US: KARACHI, Jan 8: Nishat (Chunian) Limited, a Mansha Group listed company, has decided to set up a wholly-owned subsidiary in the United States of America with an equity investment of $1 million.
The decision was made at a meeting of the board of directors held on Tuesday. The purpose of setting up a subsidiary is to promote the company’s textile marketing and trading.
“As per the approval of State Bank of Pakistan, the company will initially make equity investment of up to $0.10 million, along with the seed money of $0.10 million,” the directors told the investors.
They added that the investment would be raised up to $1 million, after taking necessary approvals from the SBP.
Another major decision taken by the board on Tuesday was to decide “in principle to reorganise, reconstruct and separate the investment from textile business of the company to more effectively manage its affairs keeping in view the best interests of the company shareholders.”
Accordingly, the board approved appointment of a consultants’ consortium to study the company’s business model and to recommend a ‘viable and workable’ proposal for consideration and approval of the board of directors.
Analyst Bilal Qamar at JS Global in a report on Nishat (Chunian) released on Monday stated that the company was expected to witness a turnaround in current financial year with 76 per cent growth in earnings in second quarter (2Q13), over the first quarter.
Strong core business performances, led by improved yarn exports and recognition of dividend income from the company’s subsidiaries were thought to be the key earning drivers in 2013.
The analyst pointed out that revenue generated by higher yarn demand from China has been the ‘story of the year’ for the spinning industry in Pakistan. With local prices set well below China’s support price, the local spinning industry has benefited from increased exports to China.
As per the latest figures provided by Pakistan Bureau of Statistics (PBS), cotton yarn exports have increased in five months of the current financial year (July-Nov) by 38 per cent over similar period of last year.
SBP allows Fauji to acquire Askari Bank: KARACHI: The State Bank of Pakistan has finally allowed the Fauji Foundation to acquire majority shares of the Askari Bank, banking sources told Dawn.
Established in 1991, the Askari Bank was being run by the Army Welfare Trust, but the bank came into trouble from the beginning of last decade.
“We have issued NOC to the Fauji Foundation that allows the foundation to acquire the Askari Bank,” said SBP spokesman Syed Wasimuddin.
Market sources said the Askari Bank would be jointly acquired by the Fauji Foundation, the Fauji Fertilizer and the Fauji Fertilizer Bin Qasim.
The price of shares has not yet been negotiated or finalised. The finalisation of prices would complete the acquisition of the Askari Bank.
The State Bank had granted approval to Fauji Foundation to commence due diligence of Askari Bank in January 2012. Bankers said the Askari Bank would find a better chance to grow since the foundation has strong footing in terms of assets and finance.
The bank faced tough times as its profitability was hurt during the last few years despite improvement in 2011.
The bank earned a profit-after-tax of Rs1.628 billion in 2011 which was 73 per cent higher than last year’s profit of Rs943 million.
The Askari Bank has a network of 245 branches and sub-branches, including 31 dedicated Islamic banking branches. As on Dec 31, 2011, the bank had an equity of Rs17.8 billion and total assets of Rs343.8 billion.
The Askari Investment Management Limited and the Askari Securities Limited are subsidiaries of the Askari Bank, primarily engaged in managing mutual funds and share brokerage, respectively.
A senior banker said one of the reasons for trouble of the Askari Bank was the non-performing loans which put pressure on the bank to adopt a cautious approach but it also hurt its profitability.
He said the scenario has not changed yet despite the fact that a stronger group, like Fauji Foundation, is going to take over the bank.
“Banking activities are extremely restricted these days in Pakistan and is limited only to raise deposits. Banks don’t lend money to market players for higher returns.
Instead, they put their money in government papers at lower returns,” said the senior banker.

Bankers said the large banks have enough room to remain profitable by just investing into government papers, but the middle and small size banks find it hard to use their money “smartly.”
Bankers said smartly means to lend money to the right borrower at a higher rate with minimum risk.
Banking analysts also believe that the Askari Bank would require aggressive approach to get its place back with higher profits and low infected portfolio.
PTCL: KARACHI, Jan 8: Pakistan Telecommunications Company Limited (PTCL) and Meezan Bank on Tuesday signed an agreement for provision of PTCL Wireless Broadband services.
Meezan Bank customers can now enjoy exclusive PTCL 3G EVO Wireless Broadband services along with the services offered by the bank, says a press release.

MOHAMMED SALEEM MANSOORI

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