KARACHI STOCK MARKET NEWS

News : The loss of ready board leverage is shrinking volumes and since the brokers’ livelihood depends to a great extent on the speculators and day traders, the slowdown in income stream is cause for concern. But the trouble is that 104 brokers had stood up in revolt against the age-old prevalent ‘badla’, CFS or more attractively named CFS Mk-II. They could not possibly step back and admit that it was a mistake to discard the bad ‘badla’, before introducing an investor-friendly and acceptable alternative…While stock brokers have sought comments and suggestions from the fraternity in regard to the proposed new product, a consultative committee formed by the Securities and Exchange Commission of Pakistan (SECP), under the chairmanship of Aftab Ahmed Diwan, the COO of Central Depository Company of Pakistan (CDC), has also feverishly worked to develop and distribute the contours of its version of a new product of ‘Margin Financing’ (MF)….On Friday, the SECP told stakeholders to submit comments by June 25th, on the first report on ‘Margin Financing’ released by the SECP’s consultative group on capital markets…. Dawn

Market Low : 6,980.03 High : 7,078.07

Market Close : 7,039.73 – 12.04 points down

The new Budget for the Fiscal year 2009-10 announced yesterday has proved to be a non-event for the stock exchanges in Pakistan. While there are some benefits for the textile and cement sector (reduced FED on cement from Rs900 per metric ton to Rs700 per metric ton.), a 16 percent federal excise duty (FED) would be charged on fees charged by banks, stock brokers and insurance companies. More details will follow…

Pakistan will scrap a 0.02 percent capital value tax (CVT) on the purchase of shares while imposing a new tax on brokers’ commissions, a government adviser said on Sunday… Aaj News

The text of the Budget speech of Minister of State for Finance and Economic Affairs, Hina Rabbani Khar in the National Assembly here on Saturday: The Nation

The KSE-100 index has been getting fucked shapeless since last Friday and is down nearly 400 points on rumours of brokerage houses being taxed in the upcoming budget. The market has not closed at this index level since March 31st and could continue to get buggered further downwards. The absence of a ‘leverage ‘ product ( like badla ) is not helping matters either.

News : The Dow Jones Indexes, a leading global index provider and the Federation of Euro-Asian Stock Exchanges (FEAS) plan to launch the Dow Jones FEAS Indexes on Friday (June 05), which will include the Karachi Stock Exchange (KSE). According to information sent to KSE on Wednesday, this is the first time that indexes are created to measure the performance of companies across the Euro-Asian region. The three indexes that are being launched on June 05, are a composite, and two regional sub-indexes. The Dow Jones FEAS Indexes are designed to underlie index-linked investment products such as funds and structured products. The Dow Jones FEAS Composite Index currently includes component stocks of 10 of the 32 member states of the Federation of Euro-Asian Stock Exchanges.

The exchanges are: Abu Dhabi (UAE), Amman (Jordan), Bahrain (Kingdom of Bahrain), Belgrade (Serbia), Bulgaria (Bulgaria), Istanbul (Turkey), Karachi (Pakistan), Macedonia (Republic of Macedonia), Muscat (Oman), and Zagreb (Croatia)…Aaj News

The CGT issue seems to need further clarification ( see below ) as its appears to be buggering the market sentiment and the market takes a dump every time there is any mention of taxation in any news article.

News : The exemption of capital gains tax on stock exchanges would continue up to June 30, 2010, as per the provisions of the Income Tax Ordinance 2001. FBR officials told Business Recorder on Monday that the Federal Board of Revenue (FBR) would not touch this exemption in the coming budget under clause-110 of Part-I of the Second Schedule of the Income Tax Ordinance 2001…..Aaj News

The Competition Commission of Pakistan (CCP) on Monday ordered the Karachi Stock Exchange (KSE) to initiate a unified trading platform with Lahore and Islamabad bourses.“Refusal on the part of KSE cannot continue,” read the CCP order in KSE’s violation of Section 3 of the Competition Ordinance 2007…This shall eliminate the present distortion of competition, and ensure availability of and access to the best price of commonly listed securities to all investors in order to restore competition in the market.
In the event of non-compliance, KSE will be liable to pay a penalty of Rs50 million at the end of the six-month grace period and thereafter an additional penalty of Rs250,000 per day if non-compliance continues… The News

Market Low : 7,194.23  High : 7,328.46

Market : 7,210.34 — 66.27 points down

The Karachi Stock market closed on yet another positive note today with an enormous volume of 316.2 million shares were traded . It was mainly the garbage "penny" stocks like NIB, Worldcall and TRG that accounted for 75 million odd. The market closed plus despite OGDC and the big "P’s " trading down and is skating on very thin ice now with no real correction in the last 775 points.

News : The Securities and Exchange Commission of Pakistan (SECP) has decided to discontinue CFS Mk-II and Deliverable Futures products in the best interests of the capital markets in Pakistan. The effective date of the discontinuation is Wednesday, April 8th. CFS Mk-II will be phased-out in 3 working cycles of 22 business days. Therefore, the complete phase out will be completed in 66 working days. Starting from Apr 8, 2009, no fresh take-up in CFS Mk-II shall be allowed. Furthermore, no new contracts will be opened in the Deliverable Futures Market from April 20th…. The Nation

Market Low : 7,518.93  High ; 7,689.15

Market Close : 7,635.88 – 116.95 points up.

News : The Securities and Exchange Commission of Pakistan (SECP) is likely to announce its decision regarding phasing out existing CFS Mk-II and to introduce new products in one or two days… Aaj News

Market Low : 7,385.08  High : 7,583.39

Market Close : 7,518.93 – 86.05 points up

The Continuous Funding System (CFS) committee has proposed to ban the existing CFS Mk-II and Deliverable Futures in the country’s stock exchanges with immediate effect. The committee has proposed to introduce Cash Settlement Futures (CSF) and other investor-friendly products of international standards.The CFS committee in its meeting held here on Monday decided that the final proposal in this regard would be sent to the Securities and Exchange Commission of Pakistan (SECP) during this week for approval...Aaj News

The Karachi Stock market had a successful week boosted by corporate results and the news of its possible re-inclusion in the MSCI Frontier Index. Successfully breaking 6,000 this week, the market took a breather and witnessed profit taking by Friday’s close. Next week should see the market remain tight with results from Pakistan Telecommunication Company, Oil & Gas Development Company, Pak Oilfields, Hub Power,  and United Bank Limited.

Dividends :  The profit after tax of Habib Bank Limited (HBL) has increased by nearly 55 percent to Rs 15.614 billion translating into an earning per share of Rs 20.47 in the year ended December 31, 2008 as compared to PAT of Rs 10.084 billion and EPS of Rs 13.18 earned in the corresponding period in 2007… Aaj News

DG Khan Cement (DGKC) has announced its results for the first-half of financial year 2009 (1HFY09). The company booked profits of Rs127 million (earnings per share of Rs0.5) versus Rs330 million (EPS of Rs1.3) in 1HFY08, depicting a decline of 61 per cent.Despite a jump of 79 per cent in sales revenue on account of higher local cement prices and cement exports, profits remained under pressure largely due to a significant jump in administrative and financial expenses… The News

News : The committee on CFS agreed to phase out the CFS Mk-II product from the local bourses, it is reliably learnt. The high-level committee constituted by Securities and Exchange Commission of Pakistan (SECP) met here on Saturday and reviewed the CFS Mk-II in its entirety including risk management, eligible securities and margin requirement.The meeting was presided over by the committee head Shehzad Naqvi, CEO of the Royal Bank of Scotland (RBS). The committee representatives from the three stock exchanges, National Clearing Company of Pakistan Limited, Mutual Fund Association of Pakistan (Mufap), Pakistan Banks Association (PBA) and senior securities market professionals/stakeholders attended the meeting… the committee reviewed the CFS Mk-II and agreed to phase out this product with the approval of the apex regulator. The committee will meet again sometime next week to finalise a proposal, which would be sent to the SECP for approval….Aaj News

Insurance companies have been asked to recognise the impairment in valuation of investment as of December 31st, 2008 for the purpose of distribution of dividend. In a circular issued by Insurance Division of the (SECP), insurance companies are allowed to value investment in Available-For-Sale (AFS) category at the purchase price and treat the impairment in valuation, at the end of the year, as temporary for finalisation of accounts. However, the impairment has to be accounted @ 25 percent per quarter in 2009…. Aaj News

The week began at 5,573 and the Karachi stock market dipped down below 5,400 on fears of the accounting process for all companies for their last quarter results. On Friday the index rose 3.5% on the news that the SECP had relaxed the the accounting treatment for equity securities under the International Accounting Standard ( IAS) (see article below) . Now that the issue has been clarified and the relaxation given until Dec.31st 09, there should be a boost in the market in the coming week across the board. Results for next week include MCB, PSO, & ICI Pakistan.

The Securities and Exchange Commission of Pakistan (SECP) has granted relaxation in the accounting treatment for equity securities held by the companies under the head ‘Available for Sale’ as required under International Accounting Standard "Financial Instrument: Recognition and Measurement" (IAS 39)…According to details issued by the SECP, the relaxation is valid till December 31, 2009 and has been granted in the light of representations from various stakeholders including Mutual Funds Association of Pakistan (MUFAP), Insurance Association of Pakistan (IAP), Pakistan Banking Association (PBA), Leasing Association of Pakistan (LAP), Modaraba Association of Pakistan (MAP), Karachi Stock Exchange (KSE) and the corporate sectors….The final decision on this issue was taken by both regulators unanimously and simultaneously so that the uncertainty that had recently been generated on this issue should come to an end as many companies were in the process of finalising their annual accounts and half yearly accounting statements, the SECP said…. Aaj News

The Chairman of the Federal Board of Revenue (FBR) Ahmed Waqar has said that a fund worth Rs75 billion is being set up to bail out Pakistan State Oil (PSO) from the financial crunch….Chairman FBR said that the fund would be constituted by the end of this month, which would help PSO pay its debts and further make payments to refineries… The News

The board of directors of the Karachi Stock Exchange (KSE) has decided that the stock market will start its normal trading on Monday without ‘floor’ strictly in accordance with the directive of the Securities and Exchange Commission of Pakistan (SECP). This decision was taken at an emergent meeting of KSE board of directors here on Saturday evening.

The board decided that the "floor rule" will be removed from Monday (December 15) and the market will start its normal trading with five percent upper and lower locks…. Source : Aaj News

Sensibly for once , the KSE-100 index will remain "frozen " and the "floor" will not lift until November 15th as the required support funding is not ready.

Managing Director Karachi Stock Exchange (KSE), Adnan Khan Afridi has said that the lower cap on the benchmark KSE-100 Index should be kept intact till the equities market support funds are released.Speaking at a press conference after a meeting with the Prime Minister’s Adviser on Finance, Shaukat Tareen here on Sunday Adnan Khan Afridi said the prices floor will continue to be placed at KSE till there is stability in the share market… The News

The government has established a Rs 20 billion open-end fund to be injected into the stock market for providing a soft landing to the market on its opening on October 27, 2008. The government has also given Rs 30 billion guarantee to foreign investors, who would avail put options. The Securities and Exchange Commission of Pakistan (SECP) on Wednesday gave formal approval for establishing the required fund. These decisions were taken in a meeting between the Securities and Exchange Commission of Pakistan (SECP) and the Board of Directors of the three stock exchanges ie KSE, LSE and ISE, under the chairmanship of Razi-ur-Rahman Khan Chairman SECP…The NIT is in the process of finalising the finer details for smooth operation of the said Fund. The Fund is expected to provide a soft landing to the market on its opening on October 27, 2008. The fund will invest in seven state-owned entities namely Oil and Gas Development Company Limited, Kot Addu Power Company Limited, Pakistan Petroleum Limited, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Pakistan State Oil Company Limited and National Bank of Pakistan. In addition to the market operation of the fund, the fund is being provided with a Rs 30 billion GOP guarantee to enable it to write put options on the seven state-owned entities detailed above…Aaj News

The KSE-100 index traded less an one million shares today! It seems a total waste of time to keep the market open at the moment, but at least the "floor" has been kept and will be reviewed in mid-October. Short selling has been banned for the October future contract. The market will be closed for a holiday 2moro.

News : The board of directors of Karachi Stock Exchange (KSE) on Thursday decided to keep the market floor in place, however didn’t give an exact date for its removal or further review as was practiced earlier.A statement issued by KSE after the meeting of board of directors didn’t explicitly mentioned the decision taken on market floor and just stated: “All stakeholders including KSE would like the market to return to normal trading parameters at the earliest.”…the market floor could be lifted sometime in mid of October following introduction of a fresh fund, being worked out by the government to stabilise the stock market.The size of the fund is yet to be announced, however it has been decided in principle to create this fund and it might be in the range of Rs 20 to Rs 30 billion,” sources disclosed… Daily Times

The open bidding for the sale of a minimum of 90 percent shares of Hazara Phosphate Fertilizers (Private) Limited (HPFL) here on Thursday received the highest offer of Rs 1.34 billion by the Pak American Fertilizers Limited, Lahore at the rate of Rs 70 per share for 100 percent shares… Daily Times

Market Close : 9,184.15 — 6.60 points down.

A lacklustre day at the Karachi Stock Exchange with only 7.6 million shares traded. It seems the market was waiting for the result of today’s meeting re: continuing the 9,144 "floor" for the KSE-100 index. Wisely, it has been granted to continue until the next review on September 25th as removing it at the moment would tear the market a new arsehole.

News : The floor mechanism set on share prices on August 27th’s closing level is most likely to be removed on October 06, 2008, sources said. The Board of Directors of the Karachi Stock Exchange held an emergent meeting here on Tuesday to review its earlier decision ….The KSE board observed that some progress had been made on providing a ‘cooling period’ to market participants, facilitating buy-back of shares by listed companies, reforming of CFS Margining System and providing institutional/liquidity support like Equity Market Opportunity Fund (EMOF) and other sources to the market… The board also decided to review progress and announce a date for removal of ‘floor’ in its meeting to be held on Thursday, September 25, 2008. Sources said that the board would give at least a seven-day notice period for removing the floor… Aaj News

Market Low : 9,265.82 High : 9,305.73

Market Close : 9,279.62 — 16.61 points down

Foreign selling and margin calls led to the KSE-100 index getting yet another bashing today with a low of 8,999 and closing down at 9,144. The market has been fucked shapeless in the last few sessions with prices on the board that one hasn’t seen for years. Apparently the KSE held an emergency meeting to try and freeze the index at todays close (details below).This measure should stem the rot for the moment.

Dividends : Adamjee Insurance : 15% Cash EPS : 29.33

Nishat Mills : 25% Cash EPS : 38.38

Bank of Punjab : -4.97 EPS

News : The Pakistani Stock Exchange authorities on Wednesday set a floor of 9,144 points for the Karachi Stock Exchange (KSE) index for Thursday, following heavy losses in recent days, the exchange said. The stock market has fallen for six consecutive sessions since August 20 and has lost 43 percent since hitting a record high of 15,739.28 points on April 21.“The continuous sharp decline in share prices can have implications for the wider financial system,” the board of directors of the KSE said in a statement. “With this in mind, the board decided to place a floor, based on the closing prices of securities on Wednesday,” it said. “The individual security prices will remain free to trade within the normal circuit breaker limits, but not below the floor price level as mentioned,” it said. … Daily Times

Saudi authorities have assured the Pakistan delegation that the Saudi oil facility against deferred payment will be started very soon…"We fully understand it’s not a time of procrastination, it’s time of action," the Saudi minister was quoted as saying during his talks with the Pakistani team members who met him on Wednesday. According to sources, the Saudi minister has assured the Pakistan team that oil facility will be started "as early as possible". The sources believed that the facility is likely to come into effect in the next few days…Aaj News

Trading in Arif Habib Investment Management Ltd. will start from 2moro. The market lot of the company will be 100 shares of Rs.10/- each and the symbol will be AHIML .

Market Low : 8,999.36 High : 9,430.29

Market Close : 9,144.93 — 285.36 points down

The market opened up and made a high of 11,061 and closed lower at 10,919 after some profit taking set in. Volumes were relatively higher with 147.1 million shares traded. The KSE-100 index has now risen over a 1000 points in the last 3 days and could well correct 2moro.

It appears that Nawaz, like a spoilt child, has thrown a hissy fit & walked out of the coalition meeting threatening to quit the coalition unless his demand that the old CJ be restored. As he (NS) is such an arsehole, we would certainly be better off without him. That fact that opinion polls show that he is the most popular person in the country does not say a lot for us as a nation ! Foreign papers were quick to pick up on the fact that the coalition’s talks amounted to nothing as Nawaz is adamant that the judges issue is resolved on his terms. Perhaps they should remind their readers that this is a man who had the Supreme Court stormed by his thugs while PM several years ago, therefore all his sanctimonious bullshit about the judiciary seems absurdly hypocritical.

News : After the Real Estate Investment Trusts (REITs), the Securities and Exchange Commission of Pakistan (SECP) is offering another development in this regard with the introduction of Private Equity and Venture Capital Funds (PE&VCF)…To foster the growth of these investment vehicles in Pakistan, significant incentives have already been provided by the government on the fiscal side in the Finance Act 2008. These include tax-free status for the fund up to 2014 and reduced capital gains tax rate of 10 percent as against 35 percent on sale of assets and shares of a private company to a PE&VC Fund….The PE&VCF will be an unlisted closed-end unit-trust fund open only to high net worth individuals and institutions. The fund will provide equity for seed/start-up capital, expansion, buyout as well as turn around although primarily to private companies, however, it can venture into privatisation deals as well. The management company or the FMC will be an NBFC licensed by the Commission to undertake the PE&VC Fund Management Services with a paid-up capital requirement of Rs 30 million. The promoters, directors and key executives of the FMC will have to comply with the fit and proper criteria made part of these regulations by the Commission. The minimum fund size has been fixed at Rs 250 million. The minimum number of investors has been fixed at five with a minimum subscription amount of Rs 10 million per investor that can only be raised through private placement. The fund is not allowed to list and has a maximum fixed life of fifteen years…. Daily Times

Market Low : 10,719.62 High : 11,061.45

Market Close : 10,919.06 — 199.43 points up.

The KSE-100 index slid further downwards today on selling based on the "new" political agenda of the pathetic coalition govt.’s announcement to impeach P.Mush. The market has now fallen nearly 6,000 points since its all time high of 15,676 on April 18th, about 38%. At a time when the rupee is hitting newer lows and the economy is fucked (to put it mildly), the government should focus on strengthening its economy more than its failed politics and its pathetic inability to decide on anything in the last 5 months. With Greasy Z & Non Sequitur spending most of their time in Dubai and London, & the wet PM Manuel (think Fawlty Towers) at the helm of our non-government, its hardly suprising that there has been massive local & foreign selling in the market as they can’t be taken seriously. There is currently no need for impeachment which will rock an already unstable boat even further, there are far greater problems being faced in the country. If the Govt is so worried that they will be dissolved & are therefore clutching at the impeachment straw, they should do a better fucking job of being a Govt. The next stop on the slippery slope is yesterday’s low of 9,556 followed by support at 9,360.

Dividend : Pakistan Petroleum Ltd. : 10% Bonus EPS : 26.12

Pakistan Petroleum Ltd (PPL) on Wednesday reported a 17.9 percent jump in full-year net profit, fuelled by higher well-head gas and crude oil prices and strong growth.In a statement to the Karachi Stock Exchange (KSE) PPL, which operates Pakistan’s largest gas field, posted a net profit of 19.77 billion rupees ($273 million) in the year to June 30. This compared with a net profit of 16.77 billion rupees for the previous year… Aaj News

News : The Privatisation Commission here on Wednesday decided to complete privatisation of SME Bank, Hazara Phosphate Fertilizers Limited (HPFL), National Power Construction Company (NPCC) and Heavy Electrical Complex (HEC) by September 2008. Completion of all necessary arrangements for Global Depository Receipts (GDR) of Kot Addu Power Company (KAPCO) was ordered for its listing in October 2008… Daily Times

The Securities & Exchange Commission of Pakistan (SECP) and Karachi Stock Exchange have agreed to expedite the demutualisation process in a way to get the KSE corporatised and demutualised by December 31, 2008. This was decided in a meeting on the demutualisation of the Karachi Stock Exchange on Wednesday at SECP’s Karachi Office convened by SECP Chairman Razi-ur-Rehman Khan…. Business Recorder

Market Low : 9,634.33 High : 10,042.47

Market Close : 9,678.82 – 363.64 points down

The Karachi Stock market’s opening was delayed this morning as a meeting was being held to discuss whether the index would be frozen at 9500 and other emergency market issues. As expected the SECP refused to freeze the market at 9,500 and the market dipped down to 9,556 and recovered rapidly towards the close to close up at 10,042. The market was boosted by the news re: wellhead gas prices increasing by 35% in the Sui field. This boosted the energy sector and therefore the market. The meeting between Zardari and Sharif amounted to fuck all as usual, and there will be another one 2moro. The next upward resistance is 10,250.

Dividends : Hubco Power Co : 10% Cash EPS : 2.25

Pakistan Petroleum Ltd. (PPL) is due to announce its results 2moro.

News : The wellhead prices have broadly risen by 10-35 percent on the back of higher Arab Light Crude Oil and HSFO prices in the last 6 months…OGRA has issued new gas wellhead prices for the period 1HFY09 (Jul-Dec 2008) of 12 major gas producing fields out of 49,…Well head gas prices in the country are fixed on half yearly basis in January and July every year, depending on the average Arab Light crude and HSFO prices during first six months of the preceding seven months period. The Arab Light average during this period stood at $98.4/barrel versus $75.2/barrel in the last six months, depicting a massive growth of 36 percent…Wellhead price of Sui has been increased by 35% under this revision, as there is no cap on the wellhead pricing of this field. Pakistan Petroleum Limited (PPL) with a 100% stake in Sui is the primary beneficiary of this revision. The field contributes around 64% in PPL’s total gas production… Daily Times

The “roll-over facility” shall now be allowed on the release of CFS MK-II transactions by financee at any point of time during the entire contract period. Moreover, such roll-over facility shall also be allowed on the “force release” of CFS MK-II contract ie, on the 23rd business day of such contract. The said changes are also catered in the CFS MK-II system and this facility will be available from August 6th, 2008…Margin eligible securities: KSE has revised the list of margin eligible securities. Deposit against exposure margins, market-to-market losses (where applicable) and special margins in the revised list of securities will be implemented effective from August 18th… The News

Hub Power Company Limited (HUBCO) on Monday announced that it has acquired 75 per cent controlling interest in Laraib Energy Limited (LARAIB) and will be setting up country’s first hydropower project by an independent power producer (IPP).The project is an 84mw, run of the river hydropower generating complex being set up about eight km downstream of Mangla Dam, HUBCO said in a notice issued to Karachi Stock Exchange… The News

Upper Caps : PPL / BAFL

Lower Cap : AHL 

Market Low : 9,556.96 High : 10,042.47

Market Close : 10,042.47 – 189.29 points up

The KSE-100 index rose to make a high of 10,282 and then got raped again down to a low of 9,739 and closed down at 9,853. The market swung a total of 543 points from its high to its low and has closed at its lowest close since Dec.22nd 2006. Its seems that the Rs.5 billion worth of stock bought on Saturday did fuck all to stem the index’s continuous fall and the market has fallen a 1000 points in the last three trading sessions. The credit rating by S&P and Moodys due this week is said to having caused further panic selling today. It looks like the shorters have stepped in and could bash the index further down to 8700. The next downside support is 9700 followed by 9350. Oil fell below $120 for the first time in 3 months today.

News :  The Securities and Exchange Commission of Pakistan (SECP) has turned down the proposal to freeze the stock market on Monday’s closing level or index 9,500 points. In an emergency meeting held at the residence of SECP chairman on Monday night, the board of directors of Karachi Stock Exchange (KSE) and Securities and Exchange Commission of Pakistan Chairman Razi-ur-Rehman discussed different suggestions to support the market. Some of the members gave a suggestion to freeze the stock market on Monday’s closing level or index 9,500 points. Senior KSE members also attended the meeting and discussed the prevailing situation at the local bourses. However, the final decision is likely to be taken on Tuesday before opening the market as some of the senior members opposed this proposal… Aaj News

Market Low : 9,739.01 High : 10,282.78

Market Close : 9,853.18 – 318.21 points down

The KSE-100 index made a high of 11,173 , then dipped down to 10,979 and close up at 11,156. Total volume traded today was 111.9 million shares, still on the low side. Arif Habib Securities was the flavour of the day with 12.6 million shares traded. The market has closed above its first resistance of 11,100 and the next target is 11,400. The market is up by nearly 1000 points since Friday and after 4 days of green, there could be some weekend selling 2moro.

News : The authorities have decided at a meeting held on Thursday that Equity Market Opportunity Fund (EMOF) would be an Open-End Fund. The EMOF  launched from Friday (today) would be injected in stock markets under NIT management when market is under pressure…The initial size of fund was declared at Rs20 billion, but owing to its attractiveness of being an open-end fund, the size might inflate to any level. The general public would also be able to invest in this fund and the National Investment Trust (NIT) would be announcing its daily NAV value and dividends,…NIT would form a separate board to manage the fund. The board would be meeting at least after every six months or in case of emergency too. Initially, EOBI has confirmed to pool Rs3 billion; State Life Rs2 billion and Rs2 billion by National Bank, besides other financial institutions and banks would share rest of funds, sources said. This fund would be invested in KSE 100-share Index instead of KSE 30-share Index as was informed earlier. The fund would not be invested in more than 50 companies… The News

Malaysia’s Maybank is set to buy another 5 percent of Pakistan’s MCB Bank as early as next month, in a deal estimated at $218 million,…Malayan Banking Bhd, Malaysia’s leading lender, bought a 15 percent stake in MCB Bank, Pakistan’s top lender, for $680 million in May. That deal included a clause whereby Maybank was obliged to buy up to another 5 percent of MCB Bank shares within one year of the first transaction. The price for this stake was then agreed at Rs 490 per share, plus holding cost, with the total price not exceeding Rs 510 per share. “The deal is very much on, the talks have started, and if all goes well, it should materialise sometime in August,” said a source close to the transaction.
A spokesman at Maybank declined comment. A spokesman at MCB Bank said any stake purchase by Maybank would be in line with the previous agreement, but he did not give a time frame for the new purchase…. Daily Times

Adamjee Insurance is likely to announce profit after tax of Rs 2.7 billion (EPS Rs 26) for the first half of the current year compared to Rs 1.18 billion (EPS Rs 11.6) in the corresponding period of last year, a growth of 125 percent, says a research report…“Exceptional growth in 2Q2008 profitability would mainly be attributable to a one-time capital gain of Rs 2.7 billion on account of MCB sell-off deal,”…. Daily Times

The United Arab Emirates (UAE) has recently raised the cement price by 15 percent due to its rising demand, mainly benefiting Pakistani cement industry, sources said on Thursday. Pakistan is the major cement exporter to the UAE, as it fulfils around 70 percent of the total demand of the product in the Emirates.After the rising cement prices in the face of huge demand in UAE, analysts see Pakistan as a primary beneficiary to flood the Arab markets with its product. It is likely to receive huge cement export orders shortly, they said…Source : Aaj News

Upper Caps : BOP / AICL / NBP / UBL / MCB / DGKC / NML / ATRL

Market Low : 10,979.07 High : 11,173.77

Market Close : 11,156.68 – 138.18 points up

After another dip down to 10,057, the KSE-100 index finally closed up with a reasonable gain of 140 points at 10,374. The Government has finally woken up to realize that the market has gone down nearly 35% in the last 3 months. This has resulted in a visit from the SBP governor at the KSE today and the Finance Minister will be visiting 2moro. A little too late one could say, but better late than never. A close above 10,500 would be supportive for the market.

Dividends : Engro Polymer : EPS : 0.83

News : State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar has said that despite multiple shocks, the country’s economy has managed to record economic growth of 5.8 percent in FY08, which is above the average growth trend of 5 percent observed between FY1991 and FY2008. During her first visit to Karachi Stock Exchange (KSE) here on Monday, she clarified that the central bank’s Prudential Regulatory Framework is largely supportive of exposures to the stock market, and that within the existing regulations, banks have the aggregate capacity of an incremental amount of Rs 40 billion to invest in the stock market, if they wish to do so. The SBP has also extended the deadline for banks’ total stock market exposure not to exceed 50 percent of their equity to June 30, 2009.
The SBP Governor was invited by the KSE Management to address a meeting of the KSE Board of Directors, stockbrokers and heads of commercial and investment banks… Aaj News

Upper Caps : AHSL / BAFL / DGKC / OGDC/ POL/ PSO / PPL /UBL / NBP amongst others

Lower Caps : MCB / BOP /

Market Low : 10,057.72  High : 10,374.30

Market Close : 10,374.30 – 139.52 points up

Friday saw the week ending with the KSE-100 index closing down yet again, at 11,695. After Friday’s meeting of the SECP & the stock exchanges, it has been decided that the locks will revert to their normal 5% up or down as of July 14th. Short selling will be allowed in the August futures contract (see the article below) Given the pattern of trading in the last 2 weeks, expect a lot of lower caps 2moro. Stock up on Vaseline and Pampers !

News : Saudi Arabia has agreed, in principle, to defer payments for crude oil sales to Pakistan, expected to be worth about $5.9 billion during Pakistan’s 2008-09 financial year, The Financial Times reported on Saturday….Aaj News

The Securities and Exchange Commission of Pakistan (SECP) has reverted the upper and lower security-wise circuit breaker to 5 percent or Re 1, announcing strict monitoring of market activities, especially with reference to blank sales in excess of allowed limit and other market manipulations…. Aaj News

Market Low : 11,687.11 High : 11,773.12

Market Close : 11,695.82 – 77.30 points down

The Securities and Exchange Commission of Pakistan (SECP) has issued tentative regulations for Equity Market Opportunity Fund (EMOF) worth Rs50 billion which will be injected into the fast falling capital market to stabilise it in bad days…Next meeting on the fund formation is scheduled to be held on July 16th. The tentative regulations were made public following SECP and KSE meeting held here on Thursday with financial institutions, which are the only eligible investors to pool their funds in EMOF.

Next meeting on the fund formation is scheduled to be held on July 16. The tentative regulations were made public following SECP and KSE meeting held here on Thursday with financial institutions, which are the only eligible investors to pool their funds in EMOF.National Investment Trust Limited (NITL) will be given the responsibility to run this fund, while financial institutions ie banks and Development Financial Institutions (DFIs), state-owned institutions and semi-government companies would be its only eligible members.

If an agreement is inked between the SECP and the likely members of this fund, then this fund would be invested in the KSE 30-index stocks that are eligible for CFS and CFS MK-II. Fund allocation will be according to the weight of each eligible scrip as a percentage of total CFS value as of July 08, 2008. Listed securities of brokerage houses and their holding companies will not be eligible securities for investment.

The EMOF shall be utilised as 30 per cent of funds will be made available on Day one; 30 per cent on day two; 30 per cent on day three and 10 per cent of funds will be made available on Day four. Any unutilized funds shall continue to be made available till the fifth trading day.After phase one, if funds are still available, the EMOF will review its investment strategy and may reenter the market.On the other hand, EMOF shall divest its holdings when the share prices of any particular scrip exceed 20 per cent of their weighted average of last six months… The News
 

The Karachi Stock market continued its rise making a high of 12,499 and closed up at 12,430. The market has jumped up 1268 points in the last two sessions and there could be some lower caps creeping in, in a day or two. Volumes have increased with 192.7 million shares traded today.

News :  The government is arranging two tranches of Rs35 billion each for the payment of price differential claims (PDC) to oil marketing companies (OMCs) and refineries,…The ministry of finance has conveyed to the ministry of petroleum that it will very soon release two tranches of Rs35 billion each to the oil marketing companies and refineries under the head of price differential claims,…The PDC is a subsidy on POL products not passed on to consumers in fortnightly price revisions, but borne by the government to offset the effects of soaring petroleum prices. The PDC claims stood at Rs72 billion before the announcement of the federal budget earlier this month…The News

Most of the listed cement companies have registered huge losses from operations during the first nine months of the current fiscal year, industry sources say. They say that 85 percent of the listed cement companies have incurred losses amounting to Rs 5 billion during first nine months of the current fiscal. These losses occurred mainly due to rising cost of doing business and an imbalance in supply-demand phenomenon, resulting in depressed market prices,…Fauji, Lucky and Attock are the only three cement companies showing profit from operations worth Rs 2.4 billion… Daily Times

Pakistan Telecommunication Company Limited and the Karachi Stock Exchange signed a memorandum of understanding here on Wednesday, under which  PTCL would set up a high-speed network at the bourse. According to the agreement,  PTCL will deploy all necessary equipment to establish a ‘point of presence’ within the KSE building for laying a high-speed dedicated network called ‘KSE Connect’, especially developed for the stock exchange….KSE Connect would allow KSE members the facility to conduct real-time on-line trading from anywhere in Pakistan… Source : The News

Dubai’s Giladari Cement plans to invest around 3 billion rupees to establish a cement plant in the country with the capacity of producing 3300 metric tones per day…Work will commence on the plant next month and will be completed by November 2009… Source : Aaj News