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Closing Bell: When the Music’s Over

August 13, 2020 (MLN): The benchmark KSE-100 index ended the trading session on Thursday with a 182.44 point or 0.45 percent decline to close at 40,290.74.

The capital markets opened higher on the last trading day of the week but the verdict of the GIDC case left the markets on the rocky ground ahead of the long weekend as investors took them as cues to book profits which brought the index down.

The Supreme Court canceled all the petitions against GIDC levy and ordered the companies to pay the outstanding GIDC amount of Rs. 417 billion in monthly installments.

Throughout the session, Fertilizer sector felt the heat of the SC’s decision on GIDC.

Another notable highlight in today’s session was the announcement of the MSCI quarterly index review wherein no changes were witnessed regarding Pakistan in both Standard Index and Small Cap Index.

Besides this, the Askari bank has posted its net profits of Rs 4.97 billion (EPS: Rs 3.94) during 1HCY20, showing an increase of 58.75 % against net profits of Rs 3.13 billion.

The Index traded in a range of 664.50 points or 1.64 percent of the previous close, showing an intraday high of 40,563.16 and a low of 39,898.66.

Of the 95 traded companies in the KSE100 Index, 36 closed up 58 closed down, while 1 remained unchanged. The total volume traded for the index was 342.13 million shares.

Sector-wise, the index was let down by Fertilizer with 201 points, Inv. Banks / Inv. Cos. / Securities Cos. with 27 points, Commercial Banks with 19 points, Textile Composite with 19 points and Automobile Parts & Accessories with 11 points.

The most points taken off the index were by FFC which stripped the index of 114 points followed by ENGRO with 44 points, MCB with 27 points, EFERT with 26 points and DAWH with 24 points.

Sectors propping up the index were Technology & Communication with 30 points, Oil & Gas Marketing Companies with 29 points, Power Generation & Distribution with 22 points, Oil & Gas Exploration Companies with 18 points and Cement with 14 points.

The most points added to the index was by TRG which contributed 37 points followed by HUBC with 22 points, BAHL with 20 points, SNGP with 15 points and HASCOL with 13 points.

All Share Volume decreased by 35.03 Million to 556.15 Million Shares. Market Cap decreased by Rs.22.94 Billion.

Total companies traded were 419 compared to 405 from the previous session. Of the scrips traded 179 closed up, 220 closed down while 20 remained unchanged.

Total trades decreased by 19,522 to 164,361.

Value Traded decreased by 3.11 Billion to Rs.19.35 Billion

CompanyVolume

Top Ten by Volume

Unity Foods60,265,500
Hascol Petroleum50,870,000
Un ity Food(R)50,641,500
Worldcall Telecom33,450,500
TRG Pakistan32,343,500
Pakistan Refinery15,912,000
Maple Leaf Cement Factory12,425,500
Engro Polymer & Chemicals12,274,500
Sui Northern Gas Pipelines12,125,000
Pak Elektron11,791,000

 

SectorVolume

Top Sector by Volume

Vanaspati & Allied Industries110,907,300
Technology & Communication81,137,100
Oil & Gas Marketing Companies73,057,516
Cement44,817,180
Power Generation & Distribution30,144,089
Fertilizer28,375,187
Commercial Banks28,022,065
Chemical24,227,890
Refinery22,128,700
Cable & Electrical Goods17,925,150

 

 

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GIDC verdict review – Fertilizer Sector to bear the...

August 13, 2020 (MLN): The Supreme Court of Pakistan today gave its verdict on the long-pending issue of GIDC, thereby passing judgment in favor of the government. The apex court also ordered the companies to pay the outstanding GIDC amount of Rs. 417 billion

It is pertinent to mention that the companies have paid a total of 282 billion so far out of the total Rs. 722 billion charged to them by the state, with the remaining Rs. 440 billion being accrued.

Another interesting point to note here is that out of the three possible scenarios discussed previously, this verdict falls within the ‘100% payment’ option.

While the decision was not taken in the favor of the industry, the court, however, directed the government to not levy further GIDC on the companies on account of under-utilization of the funds collected previously.

‘We restrain the Federal Government from charging Cess which power of the Federal Government shall remain suspended until the Cess-revenue collected and that which is accrued so far but not yet collected is expanded on the projects’, the judgment said

Discussing the impact of this decision on the financial wellbeing of the companies, AKD Securities stated that the fertilizer sector, which is likely to suffer the largest brunt, will see an approx. the outflow of Rs. 110 billion. This constitutes around 26% of the total GIDC payment. The impact will be even worse for companies such as FFC and FFBL in terms of earnings, as the former is already suffering from loss in non-core income on short term investments while the latter is facing significant liquidity issues.

Going by the official document issued by the SC, as a concession, the outstanding amount shall be recovered in twenty-four equal monthly installments starting from 01.08.2020 without the component of late payment surcharge. This means that the impact of outflow on the earnings of these companies will be realized in the short to medium term.

The Cement Sector, on the other hand, is likely to see minimal impact on its financials as only three cement companies, namely LUCK, MLCF, and DGKC, will face the brunt of the verdict. According to AKD, the outstanding amounts for these companies stand at Rs. 4-5 billion, Rs. 0.4-0.5 billion, and Rs. 1-1.12 billion, respectively. It is reasonable to mention that Luck and MLCF are both well to do companies, which makes them capable enough to make the payments. DGKC, on the contrary, might have to take on short to medium-term loans to pay off the outstanding taxes.

With regards to the chemical sector, the report said that verdict might take a toll on EPCL, which is currently undergoing major CAPEX investments, which means that it will have to resort to taking short-term loans. However, provided that the deadline for payments is eased, the internally generated funds of the company will suffice to cover the outstanding payments.

It is being widely held that the concerned parties will go for a new petition of the verdict. However, the probability of that happening is quite low, as rightfully pointed out by Al Habib Capital Markets, as the case involves several parties and it may be difficult for the aggrieved party to get everyone on the same page. In other words, some companies who are financially sound might be willing to clear their dues and not get involved in the fuss all over again, whereas those with the minimal financial backup will try to file a review petition. A report by Insight Securities has also pointed out a possibility of a ‘settlement’, whereby affected parties may reach a consensus with the state.

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PMEX Commodity Index closes almost flat

August 13, 2020: On Wednesday at Pakistan Mercantile Exchange Limited, PMEX Commodity Index shed only 2 points to close at 4,934-mark. The traded value of Metals, Energy, and COTS/FX was recorded at PKR 14.749 billion and the number of lots traded was 19,042.

The major business was contributed by Gold amounting to PKR 11.043 billion, followed by Silver (PKR 1.879 billion), Copper (PKR 504.113 million), NSDQ 100 (PKR 323.192 million), Platinum (PKR 272.755 million), Currencies through COTS (PKR 269.717 million), DJ (PKR 196.643 million), Crude Oil (PKR 161.883 million), Natural Gas (PKR 85.205 million) and SP500 (PKR 12.958 million).

In agriculture commodities, one lot of Cotton amounting to PKR 0.525 million was traded.

Press Release

Waves Singer Pakistan Ltd to increase Authorized Share Capital...

August 13, 2020 (MLN):  The Board of Directors of Waves Singer Pakistan Limited, in their meeting held today on 13 August 2020, have approved the increase  in Authorized  Share  Capital  of the  Company from PKR 2,000,000,000/- to  PKR 3,000,000,000/- subject to the completion of necessary corporate and regulatory formalities.

In their meeting, BoDs also approved appointment of Mr. Adnan Afaq as Chairman of the Board and Mr. Haroon Ahmad Khan as Chief Executive Officer of the Company with effect from August 11, 2020 for a term of next three (03) years.

The Board also approved the amendment in the Object Clause and other clauses of the Memorandum of Association (MOA) to add development of Affordable Housing Projects and all related Real Estate development activities in to the Principal lines of business of the Company subject to the approval of Shareholders and Securities and Exchange Commission of Pakistan "SECP" and other relevant authorities.

To obtain approval of Special Resolutions from the Shareholders with respect to above-mentioned alteration/amendments in the MOA of the Company, an Extraordinary General Meeting ("EOGM") of the Company will be held on September 09, 2020.

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Overseas investors pour Rs.1.79 billion net in domestic market...

August 13, 2020 (MLN): Overseas investors purchased net Rs.1.79 billion worth of securities during the week ended August 7, 2020, whereas last week, the accounts observed a net sale of Rs.1.69 billion.

According to a weekly report on Specially Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan, the gross sale of securities during the week was recorded at Rs.11.1 billion, which is around 50 percent lower than the figures recorded last week. Similarly, the total purchase of securities stood at Rs.12.9 billion, which is 37.2 percent lower than the prior week.

Over the week, the overall purchase of securities declined by Rs.7.68 billion while the net sale of securities tumbled by Rs.11.16 billion.

Apart from this, the inflow of remittance into these accounts stood at Rs.6.26 billion, while its outflow has been reported at Rs.5.83 billion.

The closing balance of SCRA was recorded at Rs.29.77 billion, which marks a decline of Rs.1.35 billion over the week.

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