Best Cure for Hiccups?

Posted on 02.12.07 by Tanveer Sultan @ 2:49 pm    

“No matter how strong a bull may be, there is a time when it gets tired”, I said in my article “How Much Bull Can you Take”. My sentence reflected the market situation last week. (Behold, for my next trick I shall make Chirac disappear!) I mentioned that the bullish trend would continue and it is going to be a week of correction. It wasn’t exactly a correction of the magnitude I’m still expecting but it was definitely a hiccup that required more than a glass of water to abate. Though on the day market was a bit rough and the index showed fluctuation of about 175 points, Tuesday ended with a positive note. Correction, nevertheless, it was, in principle.

OGDCL – POST-GDR AND 2ND IPO

Posted on 02.06.07 by Tanveer Sultan @ 11:34 pm    

OGDCL was listed on GDR on December 18, 2006 at a price of US$ 1.89/share, which accounts approximately to Rs. 113.40 (the exchange rate being Rs. 60/US$ 1). Moreover, GoP also launched 20 million shares from its holdings in the company in what is a secondary public offering and what is termed a second IPO in mid-January of this year at a price of Rs. 110/share.

Market capitalization of the company currently is Rs. 588 billion. The share capital of the company is Rs. 43.01 billion divided into over 4.3 billion shares of Rs. 10 each. Out of the total shares, at just over 95% shares are held by GoP, the rest are with the general public. The public offering will marginally reduce GoP’s holdings in the company to 94.56%. Public holdings would increase 5.44%.

How Much Bull Can You Take?

Posted on 02.06.07 by Tanveer Sultan @ 12:27 pm    

Last week was another good one for the stock markets; KSE-100 index gained about 500 points. The bulls ran rampant. The trend which started mid-January continued. The index gained more than 1, 000 points overall straight away, without any correction. The index, which started rising mid-January, is now above 11, 500 points. TNA, people: Total Non-stop Action.

What Happens When Beasts Roam the Earthen Markets

Posted on 02.01.07 by Tanveer Sultan @ 10:52 am    

Needless to say, a stock market is a very interesting playground; things change quite quickly and decisively. A few days ago we saw a bearish trend in the market and now the trend has changed to bullish. These were the levels and prices where everyone was selling and leaving the market; now, everyone’s back on the wagon again, everyone wants to buy and make money.

Last week the bullish trend continued. The Index crossed 11,000 points once again. There was an overall increase in 464 points in KSE-100 index. Though it was the last week of January trading, buying was strong in that it did not affect the pursuant bullish trend. On Wednesday and Thursday, the Index increased by 150 and 175 points respectively.

ENGRO: POST-BoD ANALYSIS

Posted on 01.23.07 by Tanveer Sultan @ 4:45 pm    

BOARD MEETING:
The Board of Directors (BoD) of Engro Chemicals Limited (Engro) was scheduled for Saturday 20 Jan. 2007 to approve the 2006 full-year results. However the results were announced on 22 Jan. 2007 at 10:00 am. Circumspect though it may seem, bear with me.

2005 DISCLOSURES:Profit after Tax (PAT): Rs. 2, 320 million
Earnings per Share (EPS): Rs. 13.79
Payout: Total cash dividend of Rs. 6

2006 EXPECTATIONS:
PAT: Rs. 2, 350 million, with expected growth of 1%
EPS: Rs. 13.94
Payout: Rs. 4 to 5

ANNOUNCED RESULTS:
Profit: Before taxation = Rs. 3, 444.656 million; PAT = Rs. 2, 547.3 million
EPS: Rs. 15.47
Payout: The company has announced final cash dividend of 30% i.e. Rs. 3 each share while the interim dividend was 60% i.e. Rs. 6 each. This makes the total of 90% i.e. Rs. 9 each share for the year 2006.

The (Passed) Winds of Change - Part 2

Posted on 01.23.07 by Tanveer Sultan @ 11:06 am    

Again, here’s my take on the news. I think the three more important ones, that directly pertain, hence affect, the Karachi stock exchange, are:

1. The release that Prime Minister Shaukat Aziz is to postpone the decision to levy Capital Gain Tax for the next year.
2. The Sindh Government’s decision to discontinue stamp duty on electronic transfer of shares. [This proposal was in the last budget (June 2006). The duty was Rs. 0.01 per share.]
3. The opposition and disfavor of the Public Accounts Committee toward the privatization of Pakistan State Oil (PSO).

The (Passed) Winds of Change: Part 1

Posted on 01.22.07 by Tanveer Sultan @ 3:30 pm    

The reports by the agencies below that came around mid-December have been issued pertaining to our present economic condition and a look into the future. SBP primarily touted foreign investments for last half year, drooling from the prospects of privatizations in the couple of years to come. And, as usual, there was some news directing the path of KSE. Let’s have a brief look on the reports first.

Recovery After Crash

Posted on 01.22.07 by Tanveer Sultan @ 2:41 pm    

After the index breaking the 9,900 level last month, started to rise gradually. When such a crash comes there is a level where short sellers start profit taking, so there is a slight change in the trend. Secondly the prices came on the lower level that they attracted the individuals to buy shares. As the future contracts for December were over and new month started so a fresh buying in Jan contracts was obvious. Another factor in my opinion which played the most vital role in supporting the index was the news that Prime Minister has postponed the decision to levy capital gain tax for next year. This made the institutions to come to the market for fresh purchasing. We saw that the index gained about 250 points in two days.

Commentary on December 2006 Stock Crash

Posted on 01.04.07 by Tanveer Sultan @ 4:42 pm    

In the past two years we have seen some tremendous highs and lows in the stock market. Yet again we witness a major decline in the index. It all started in mid-December 2006, the causes being:

• Oil and Gas Development Corporation (OGDC) listing and undervalued sale of Global Deposit Receipts (GDRs);
• Selling in the banking sector due to acquisitions, and;
• Primarily, suspension of Callmate (CTTL) shares’ trading and the six times its pad up capital stuck in the continuous finance (CFS) and Badla market.