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Thursday, 2 May 2013

STOCK MARKET UPDATE: 03.05.2013



STOCKS
Karachi Stocks Up 52.11 Points:
KARACHI, May 02: At the close of trading, the KSE-100 index was at 19034.53, up 52.11 points.
 (Today 3rd April- Market is 111.19 Up@ 1056 am)

May 02, 2013

 5 TOP GAINERS  &  LOOSERS:

Rafhan Maize
Rs 222.62
Bata (Pak) XD
Rs (20.28)
Nestle Pak. XD
Rs 70.00
Island Textile
Rs (17.67)
Wyeth Pak
Rs 63.04
Fazal Textile
Rs (10.00)
Shezan Inter.
Rs 25.17
Abbott Lab. XD
Rs (6.51)
Sanofi Aventis
Rs 20.29
Blessed Tex.
Rs (5.25)
Equities cross 19,000-barrier
KARACHI, May 2: As was expected the KSE-100 index finally crossed over the barrier of 19,000 points on Thursday to close at 19,034.53 points, posting gains of 52.11 points.
Investors were encouraged over the events on May 1 holiday, when the Chief of Army Staff assured that election would be held on time. The investor interest remained focused on the last leg of the difficult journey to elections on May 11.
Yet, several analysts pointed out that the country’s bourse was performing in line with global bullish trend in stocks as S&P 500 on the Wall Street had also peaked to all-time high, Australian shares closed at its highest level in five years; Indian shares were at one and half month high.
In the South Asian markets, Indonesia and Malaysia had hit historic high.
Analysts at Arif Habib Equity sales pointed out that the KSE had notched up gains of 52 points on Thursday despite the adverse development in telecom sector where the Competition Commission of Pakistan had imposed hefty fines on LDI operators.
The move depressed the sentiment in telecom shares led by PTC which made a low of Rs17 before closing at Rs17.46 at the end of the session.
Analysts suggested that the benchmark having achieved the target of 19,000 points, investors should reevaluate their portfolio.
Ovais Ahsan, analyst at JS Global stated that a large allocation to equity funds by a government institution over the week ensured interest in the market while result season also continued to invite investor interest in blue chip names.
This was corroborated by the figures released by the National Clearing Company of Pakistan on Thursday, which showed massive purchases worth $2.54 million by ‘mutual funds’ that day, which augmented the consistent net buy by the funds over the last week.
Foreign portfolio investment on Thursday stood at $1.11 million.
In the market report for the month of April, Abdul Azeem analyst at Invest Capital mentioned that net foreign inflows stood at $28 million in Apr-13 translating into a cumulative amount of $98m for CY13TD.
With the increase of 5.2pc MoM (939pts) KSE-100 reached its all-time high level of 18,982 at the end of month (April 2013) on closing basis. However, the average daily shares traded dropped by 11pc MoM to 176m shares as activity thinned in the third tier shares.
Better than expected corporate results mainly in cement, textile and some of the banking scrips were the major factors behind the rising trend in the index during April.
Other analysts maintained that resilience of the market was evident by the KSE gains in April regardless of a deteriorating law and order situation. Sentiments were fairly robust during results season.
Volume of trade on Thursday was 147m shares, a quarter lower than the Tuesday’s turnover at 195m shares.
Trading value declined by Rs694m to Rs4.178bn, from Rs4.872bn. Market capitalisation rose by Rs23bn to Rs4.687 trillion, from Rs4.664tr.
Among the 10-top volume leaders, Fauji Cement with 26m shares gained 24 paisa to close at Rs9.10, TRG Pakistan added 64 paisa to Rs10.18 on 20m shares, PTCL dipped by 46 paisa to Rs17.46 on 8m shares, Wateen Telecom declined 24 paisa to Rs5.04 on 7m shares,
Maple Leaf Cement was up by 25 paisa to Rs18.79 on 6m shares, Soneri Bank gained 41 paisa to Rs7 on 5m shares.

Engro Corporation was again under pressure on gas supply issues with the stock taking a plunge of Rs2.22 to Rs132.02 on 5m shares and Dawood Hercules was up 72 paisa to Rs55.48 on 5m shares.
Elections optimism boosts Pakistani stocks: KARACHI: Pakistani stocks closed higher on Thursday due to emerging clarity and optimism about timely elections on May 11.
Fauji Fertiliser continued to rally after its result announcement while investors remained skeptical about Engro Corporation due to problems of gas supply, dealers said.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index ended 0.27 per cent, or 52.11 points, higher at 19,034.53 points.
Fauji Cement Company Ltd rose 3.05 per cent to 9.13 rupees.
In the currency market, the rupee ended at 98.34/98.40 against the dollar, stronger than Wednesday’s close of 98.39/98.44.
Overnight rates in the money market remained flat at 9 per cent.
Karachi Stock Exchange closes higher: KARACHI: Pakistani stocks closed higher on Thursday due to emerging clarity and optimism about timely elections on May 11.
Fauji Fertiliser continued to rally after its result announcement while investors remained skeptical about Engro Corporation due to problems of gas supply, dealers said.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.27 percent, or 52.11 points, higher at 19,034.53 points.
Fauji Cement Company Ltd rose 3.05 percent to 9.13 rupees
In the currency market, the rupee ended at 98.34/98.40 against the dollar, stronger than Wednesday's close of 98.39/98.44. Overnight rates in the money market remained flat at 9 percent. (Reuters)
Company News:
SECP draft rules allow dividends in share form: ISLAMABAD, May 2: The Securities and Exchange Commission of Pakistan (SECP) has framed new draft rules allowing the companies to give dividends in the form of shares of any other company – listed or unlisted.
The regulation still in draft stage is titled, ‘Distribution of Specie Dividend Regulations, 2013, which has been published in the official Gazette of Pakistan and placed at the Commission’s website for
public comments that can be submitted online on, by May 23, 2013.
‘The recognised practice in the capital markets of the country is to issue ‘bonus shares’ as dividends to the share holders,” said an official of the SECP, adding, “However, the unrecognised practice in terms of legal requirement also continue in the market where the shares of other companies are given as dividends.”
The official said the category is termed as ‘specie dividend’ that is form of dividend where shares of another company whether listed or unlisted.
These shares are held as investment by the issuing company and can be distributed among the entitled shareholders of the issuing company.
Though the distribution of shares of another company as dividend is an acceptable practice in the capital market as it is considered beneficial to both the issuing company and its shareholders, however there were no regulations in this regard, the official said.
“These draft Regulations have been developed after detailed study of practices in various international jurisdictions, keeping in view to mitigate the chances of fraud and deception by the issuer,” the officials added.
The draft regulation has specified that the issuing company can only distribute ‘specie dividend’ only once in two years.
“This is to ensure that the issuing company may not be forcibly inducting the investments of share holders indirectly into the entity whose shares are being given as specie dividends,” the official said.
The draft regulation covers broad parameters, regarding the eligibility conditions for declaration of specie dividend, and it is required to provide an independent valuation report for the securities to be distributed in case the company is unlisted.The draft regulation also contains conditions for distribution of specie dividend, and the requirement to provide a detailed information memorandum to shareholders for the securities to be distributed.
In order to ensure maximum investor protection and transparency it has been made a requirement that a company’s Articles of Association should explicitly permit the distribution of specie dividend and the company obtains the shareholders’ approval before any such distribution.
Besides the SECP has suggested in the draft to make strict monitoring of the non-listed entities whose shares were being given as dividend.
“Where securities of an unlisted company are distributed as specie dividend, listing of such securities shall be mandatory within a period of 90 days from the date of declaration,” the official said, and for this purpose a no objection certificate shall be obtained from the relevant
stock exchange(s) prior to declaration.

“In case such securities cannot be listed, the issuing company shall encash these securities at the option of the shareholders,” the official said.
He said that it is expected that promulgation of these draft Regulations would facilitate companies to distribute securities of other companies as ‘specie dividend’ subject to disclosure requirements and sufficient conditions for ensuring protection of investors. The SECP has said that since many companies in Pakistan are closely held, the distribution of securities as ‘specie dividend’ in a protected environment will help in broadening the investor base and depth of the market.

MOHAMMED SALEEM MANSOORI

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