STOCK MARKET OF PAKISTAN

POL Earnings Expectation HY’09

2009-02-26T20:59:00.000-08:00

POL Earnings Expectation HY'09

Pakistan Oilfields Limited (POL) is expected to declare its financial result for HY'09 today. We expect the company to post net income of Rs. 4.10 billion (EPS: Rs. 17.33) during this period as compared to Rs. 3.72 billion (EPS: Rs. 15.72) in HY'08, depicting an increase of 10.2% y-o-y. Our full years earnings expectation for the stock is PAT of Rs6.35 billion (EPS: Rs26.84) as compared to Rs8.62 billion (EPS: Rs36.43) in FY'08. We expect the company to declare cash dividend of Rs14.0 for FY'09

Credit to private sector falls by 47 per cent

2009-02-25T10:53:00.000-08:00

Credit to private sector falls by 47 per cent

Private sector credit off-take in 7MFY09 fell to Rs. 140 bn against Rs. 264 bn in the same period last year. The decline in private sector credit off-take can be attributable to the tight policy stance adopted by the central bank which significantly raised the weighted average lending rates. During more than seven months, the broad money (M2) growth was just 1.48 per cent compared to 6.17 per cent during the same period last year. Since the inflation is still above 20 per cent and unemployment is on rise, the economy looks to enter into the state of stagflation. This is a stage when an economy has high inflation rate along with high unemployment. SBP estimates economy to grow by 3.7% this fiscal but the steep fall in the credit supply to private sector shows that the economic growth might fall further as some independent economists say the GDP growth could be around 2 to 2.5%.

OGDC Earnings Expectation HY’09

2009-02-24T10:31:00.001-08:00

OGDC Earnings Expectation HY'09

The company is expected to announce its result for HY'09 on Thursday, February 26, 2009. Our earnings expectation for the company for HY'09 is Rs. 32.08 billion (EPS: Rs. 7.46) Net income vs. Rs. 24.00 billion (EPS: Rs. 5.58) in the same period last year, depicting an increase of 33.7% y-o-y. We also expect the company to announce second interim cash dividend of Rs. 2.0 per share, in addition to Rs2.0 per share declared earlier. Our full year's expectation is profit after tax of Rs. 64.16 billion (EPS: Rs. 14.92) as against Rs49.61 billion (EPS: Rs11.54) in FY'08. We also expect the company to make full year's dividend payout of Rs10.0 per share for FY'09 as compared to DPS of Rs. 9.50 in FY'08.

HBL - Earnings expectation 2009

2009-02-20T10:25:00.001-08:00

HBL - Earnings expectation 2009

HBL is going to announce its full year result tomorrow. We estimate the bank to post handsome earning growth of 61.7% YoY to post PAT of Rs. 13 billion (EPS: Rs. 17.14). The handsome growth in earnings is attributable to lower provisioning by the banks against NPLs as compared to CY08. Total provision against NPL's is likely to stand at Rs. 4.5 bn against Rs. 8.16 bn depicting a decline of 44%. In 4QCY08, the bank is expected to post PAT of Rs. 3.39 bn (EPS: Rs. 4.47) against loss of Rs. 1.17 bn in 4QCY07 (LPS: Rs. 1.54). We expect cash dividend of Rs. 5 per share with possible bonus of 10%.

Stock Market News

2009-02-20T10:22:00.001-08:00

Stock Market News

Distribution of dividends: insurance companies asked to recognize impairment as of December 31, 2008

Insurance companies have been asked to recognize 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 finalization of accounts. However, the impairment has to be accounted @ 25% per quarter in 2009. This may have a negative impact on the profit available for distribution by the insurance companies on account of significant fall in share prices during 2HY of CY'08.

Stocks reviewed in last three weeks

After witnessing a sharp fall of 48 percent post lifting of the floor, Pakistani stocks have rallied in the last three weeks, up 22%, on the back of good corporate announcements and improved sentiment amongst local investors. As a result, in 2009 thus far, compared with MSCI Asian Emerging markets average decline of 3%, Pakistan market has posted a decline of 1% in the US dollar terms. Pakistan market currently trades at a discount of 43% on average Asian PE, far higher than historical average discount of 30%.

Textile exports drop creating fear of big layoffs:

The data released by FBS revealed that the textile and clothing exports dipped by 3.79 per cent to $5.827 billion in 7MFY09 as against $6.056 billion over last year despite depreciation of rupee, which should have made Pakistan's textile and clothing products more competitive. Imports of textile machinery dropped by 41% indicating the fact that textile manufacturers are not making any investment to increase their competitiveness. However export of non-textile products soared by 24.5% which helped to offset some of the decline in the textile exports. Total non-textile exports stood at $5.062bn in the period against $4.066bn recorded in 7MFY08.

Oil import bill soars by 26 per cent

Total oil import bill went up to $6.436bn in 7MFY09 against $4.995bn in the same period last year. The surge can be accountable to decline in Rupee-dollar parity. Rupee depreciated by 30% since July 08 which will add up to the import bill as there is no letup in the quantity demand of oil imports. A similar impact has been witnessed in the import bill of food items and agricultural products during the months under review. The food import bill is up by 20.52 per cent to $2.468 billion in July-Jan period this year against $2.048 billion over the last year. However significant decline was witnessed in some groups like transportation (decline of 41.72%) and telecom (decline of 47.7%)

Pakistan Stock Market News

2009-02-18T22:39:00.001-08:00

Pakistan Stock Market News

Talks deadlocked on deemed duty replacement

Talks between oil refineries and the government over the issue of replacing deemed duty with processing fee have met a deadlock as the refineries have refused to accept processing fee offered by government from US$3.5 to US$5 per barrel crude oil, and demanded raise in deemed duty from 7.5% to 10%. Oil refineries were receiving more than US$10 per barrel through deemed duty when the global oil prices stood at US$147 per barrel. At the current 7.5% the refineries earned average deemed duty of US$8.6 per bbl during 8mths'09, as per our estimations. And at the current crude price of US$40-36/bbl, the deemed duty stands at US$4.53/bbl, significantly better then the proposed US$3.5/bbl processing fee for NRL & PRL and US$5/bbl for ATRL and BOSI.

Pakistan clears $517m Eurobond payment

The country made entire payment due on Eurobond amounting to $517 mn indicating the country's ability to meet its external obligations after it was able to stem its external imbalances. Pakistan launched the five-year $500 million Eurobond on February 12, 2004, due in 2009, which was a successful return of the country to the international capital markets after a gap of five years. The bond was oversubscribed by 5 times when it was launched with price of 370bps above US Treasury (3.046 %) to yield 6.75 %. However under the current global economic scenario any new issue will be unattractive.

Net foreign inflows fall 12.7pc in 7MFY09

Foreign investment fell to around $2.23 bn in 7MFY09 as compared to $2.25 bn in the same period last year mainly due to outflows in portfolio investment. Total foreign portfolio investment outflows were recorded at $356 mn as compared to net inflows of $0.4 mn during 7MFY08. FDI however keep its upward momentum with increase of 1.3% to stand at $2.58bn in the period. High FDI reflects international investors' confidence in the country fundamentals with population of 160 mn of which majority lies in the working age. Details showed that foreign direct inflows came from various regions and countries. The trend of inflows did not change except that inflows from the North America witnessed a sharp fall.

STOCK MARKET NEWS

2009-02-16T22:08:00.001-08:00

OMCs raise furnace oil price by Rs 737 per ton

Furnace oil price has gone up by Rs. 737 per ton from Rs. 27,415.44 to Rs 28,152.44 per ton due to rising demand and low supply. Furnace oil is a high margin product for OMCs and commands over a significant potion of their sales volumes. This rise in furnace oil prices will have a positive impact on the revenues of OMC who are already struggling on account of rising debt and inventory losses.

Rs 75 billion TFC for Pepco planned

Rising circular debt has engulfed the private sector power companies as well, hindering their power generation capacity. These public sector power companies have developed large payable amounts to IPPs, who in turn owe money to their fuel suppliers. To reduce the magnitude of this circular debt, Pepco will float TFC's of Rs75b as part of its strategy to settle Rs160b. The TFC for three to four years is expected to be launched this week. The MoF officials say that the TFC will bail PSO out of circular debts, as all its debts will be shifted to Pepco. The government has decided to pay 50% of circular debt by the end of this month and remaining outstanding payment will be made by June 2009. This would ease cash flow problems for OMCs and IPPs, as well as reduce their finance cost.

PPIB receives 10 bids for 1,191MW power generation

The project, which will be implemented by the end of this year, requires investment in tune of $1.42 bn. The encouraging response by investor reflects the attractiveness of the power sector which is currently facing demand-supply mismatches. This was in continuation of the 'Fast Track Private Power Projects' initiative of the government. The initial phase of the process has already resulted in project solicitations of 780 MW of rentals expected to come on line by the end of this year. A fast track independent power producer (IPP) of 172 MW is expected by mid 2010, while three other IPP proposals of 964 MW are under evaluation, which are expected to be commissioned in 2010/11.

SECP rule relaxation likely to boost stocks

2009-02-16T13:04:00.001-08:00

SECP rule relaxation likely to boost stocks

SECP granted relaxation in the accounting treatment for equity securities held by the companies under the head 'Available for Sale' (AFS) as required under International Accounting Standard "Financial Instrument: Recognition and Measurement" (IAS 39) on Friday. Under the IAS 39, investments by companies held under AFS category had to be adjusted to Profit and Loss account incase of impairment of fair value of investment below its carrying value. Under the relaxation offered through an SRO, the impairment in fair value of investment will be taken into 'equity' account rather than P&L. The move will benefit companies multiple sectors particularly banking, insurance and mutual funds and modarabas which have heavy investments in equity market.

OGDCL AND PPL DISCOVERY AT QADRIPUR DEEP NO. 1

2009-02-16T09:06:00.001-08:00

Impact of discovery at Qadirpur Deep No.1

Oil & Gas Development Company Limited (OGDC) has made a medium sized gas discovery at Qadirpur Deep 1 located at Ghotki, Sindh. OGDC being the operator of the field has 75.0% share, whereas other joint ventures include PPL with 7.0% share, KUFPEC with 8.5% share and PKP with 9.5% share. This is the fourth discovery by the company during the current fiscal.

The size of the discovery according to initial testing is 4.28mmcfd of gas. Production from this well is likely to start from September 2009. This new discovery is likely to have a per share impact of Re0.03 and Re0.02 on the FY'10 earnings of OGDC and PPL respectively.

Impact of discovery at Qadirpur Deep 1
	OGDC	PPL
Old EPS FY'10	15.14	31.57
New EPS FY'10	15.17	31.59
Impact (Rs/share)	0.03	0.02

National Refinery Limited - Earnings expectation HY’09

2009-02-15T04:11:00.001-08:00

National Refinery Limited - Earnings expectation HY'09

National Refinery Limited (NRL) is expected to declare its financial result for HY'09 on February 14, 2009. We expect the company to post net income of Rs.548 million (EPS: Rs.6.86) during this period as compared to Rs.1.97 billion (EPS: Rs.24.73) in HY'08, depicting a decrease of 72.3% on y-o-y basis. The decline is primarily due to inventory losses given to the fall in crude oil prices. Our full years earnings expectation for the stock is profit after tax of Rs.2.69 billion (EPS: Rs.33.63) as compared to Rs.6.0 billion (EPS: Rs.75.10) in FY'08, showing a decline of 55.2%. We do not expect the company to declare any interim cash dividend; however our final per share cash dividend expectation (to be declared at the end of the year) is of Rs.13.50 for FY'09 (similar to the payout ratio for FY05).

STOCK MARKET NEWS

2009-02-09T21:56:00.001-08:00

Pakistan Stock Market in the News

Economy and Oil

The WB mission, which visited Pakistan last month, had sought commitment from the government not to accumulate the PDC on petroleum products even if the oil prices in the global market shot up in future; thus passing the full impact on the consumers. The agreement has been inked between the two parties. Due to the subsidies provided by the government on POL and energy products has resulted in inter circular debt which has gone above Rs300 billion by the end of Nov'08. By eliminating the PDCs to the consumers the cash flow problems that the OMCs are experiencing will be removed completely in future.

Trade deficit jumps to $10.727 billion

The country's trade deficit has jumped to US$10.72 billion in 7mths'09, with 3.5% increase against US$10.35 billion of the corresponding period of last year. Exports registered growth of 8.02%, while imports grew by 5.77%. 83.5% of exports were from cement, chemicals and rice, whereas 95% of imports were on account of petroleum, fertilizer and wheat. Trade deficit was at US$1.16 billion in January 2009 against US$2.064 billion in January of last year. Surge in trade deficit on Y-o-Y basis was mainly due to costly imports of oil, fertilizer, wheat and other essentials and decline in textile sector's dyeing exports. Severe shortages of gas and power and rupee devaluation were other major reason for low exports by textile and other major industries. The shrinking imports and exports due to the global economic scenario will ultimately result in the reduction in value of trade deficits resulting in to favorable balance of payments.

Inflation eases to 20.52pc

Inflation continued its downward trend on account of significant easing of food inflation and stability in oil prices. Headline inflation as measured by CPI was down by 42 bps from the previous month. Y-o-Y CPI eased at 20.52% down from 23.34% witnessed during Dec 2008. Core inflation however remained sticky and witnessed Y-o-Y growth of 18.9%. Average inflation for the Jul 08-Jan 09 period was recorded at 23.85%. Govt. estimates average headline inflation to stand at 20% for FY09.

Consensus on available for sale (AFS) impairment losses

During the meeting of ICAP with various stakeholders, a consensus was reached on the issue of impairment losses incurred in available for sale securities (AFS). Accordingly any impairment loses on AFS investments under IAS-39 should not be routed through profit and loss account, and instead, be taken to equity directly. This bodes well for companies with huge investment portfolios particularly in equity market which had been battered in CY08. KSE 100 index fell by a staggering 58.3% more because of the extraordinary conditions which prevailed in the market. The move will particularly favor banking and insurance scripts which have significant exposure in stock market.

If you have any query or question please contact our research analysts:

Muhammad Ijaz stockmarketpk@gmail.com

"MCB - Earnings expectation"

2009-02-09T11:10:00.000-08:00

"MCB - Earnings expectation CY’09"

"MCB" Bank will declare its full year results on 10th Feb, 2009. The bank is expected to post PAT of Rs. 15.027 billion (EPS of Rs. 23.92) down by 1.56% from the previous year. In 4QCY08 the bank is expected to post PAT of Rs.3.40 billion (EPS of Rs. 5.42) resulting in a Y-o-Y decline of 15.3%. We expect the bank to announce final cash dividend of Rs.3 per share taking the full year payout to Rs.12 per share. The company is likely to announce bonus issue (20-25%) as well; as it has to increase it’s paid up capital to Rs. 10 billion by 2010. The current paid up capital of the company stands at Rs. 6.282 billion.

Fauji Cement Production Enhancement.

2009-01-24T04:51:00.000-08:00

According to the company, FCCL is set to build the largest cement manufacturing plant in the country with a capacity to produce 7,200 tons of clinker per day. The Company had entered into contract with a world renowned cement plant manufacturing firm Polysius AG ( Germany ) to supply state of the art plant and machinery to produce 7200 tons per day of clinker. Additional production of cement by FCCL will help stabilize the cement prices in the local market

Banks shift to invest in T-bills

2008-12-18T10:45:00.000-08:00

Banks shift to invest in T-bills

In the auction yesterday, SBP was able to sell treasury bills worth Rs70.543 billion while the target was set for Rs70 billion which means the SBP succeeded in attracting banks’ investment. The Banks, however, were still investing for short-term paper of three-month tenure. They bought three-month t-bills for Rs66.337 billion while the rest was invested for six months. No bid was offered for 12 months. Banks are investing in lower maturity instruments so that they can reinvest in case of further policy rate hike by the Central Bank. The shift in banks investment to T-bills which are offering attractive cut-off yield of 13.85% p/a (3 months) will help the government to meet its budgetary requirement from the banking system rather than the inflationary borrowing which it makes from the Central Bank. However shift in banking strategy to invest in government securities or other security papers will result in lower private sector credit flow.

Oil producers pull lever for huge output cut

2008-12-18T10:44:00.000-08:00

Oil producers pull lever for huge output cut

OPEC, supplier of more than 40% of the world’s oil, agreed to cut production quotas by a larger- than-expected 9% from current output quota of 27.3 million barrels a day to revive prices as a global recession reduces demand for crude. Opec and non-Opec oil exporters took action on Wednesday that could remove up to 2.6 million barrels of oil from the market in a bold bid to boost prices and producers' incomes. Crude oil fell as low as US$39.88 a barrel in New York , the lowest since July 2004, on skepticism OPEC will adhere to its new agreement and after a government report showed rising U.S. crude stockpiles. Russia , the biggest oil exporter outside of OPEC, has also pledged to curb exports too, as it did a decade ago when oil sank toward $10 a barrel. Despite the cut in oil production the crude oil prices could not be revived thus sending a signal of economic slow down in major oil importing countries.

Pakistan to be dropped from MSCI emerging markets index this month:

2008-12-12T09:00:00.000-08:00

Pakistan to be dropped from MSCI emerging markets index this month:

According to the MSCI this is due to the floor mechanism which had resulted in total closure of Pakistani equity market. The MSCI international equity indices are constructed and managed with an objective of being fully liquid from the perspective of international institutional investors. However the statement issued says that if the floor mechanism is removed and in due course the index resumes its normal trading pattern then it may be allowed to be traded again. Removal from MSCI in addition to the downward rating by moody’s and S&P is another blow to the confidence of the already worried investors.

Stock exchanges to remove floor on 15th

2008-12-12T08:55:00.000-08:00

Stock exchanges to remove floor on 15th
The longest ever closure of the stock market in the world is finally set to open on Monday, the 15th of December 2008 after 100 days of freezing the KSE-100 index at 9,144 point level. The move came after the failure of the apex regulator to offer any sort of support fund for providing a soft landing to the market. The immediate impact of the removing of floor will be significant selling pressures in the some of the key stocks bringing significant reduction in their prices. The key concern here is however the investment of around Rs. 11 billion in the ‘badla’ system but those brokers which were vociferous campaigners for the ‘floor’ to be in place have decided to swallow the bitter pill as it has bring more damage to the market. The imposition of the floor has led to the removal of MSCI Pakistan Index from the MSCI Barra.

Ismail Industries acquires 20 percent BoK shares:

2008-12-01T10:51:00.000-08:00

Ismail Industries acquires 20 percent BoK shares:

Ismail industries now holds 20% of the stake on Bank of Kyber (BoK) by investing Rs1 billion. Through this acquisition the company has diversified into
the financial market

10 percent cut in taxes for car makers suggested:

2008-12-01T10:50:00.000-08:00

10 percent cut in taxes for car makers suggested:

The Ministry of Industries and Production has recommended 10% r
eduction in taxes for local car manufacturers, to be considered by
the ECC. Automobile production has come to a halt with local car
sales plunging by 51% at 19,066 units in the Q1’09. Among major
players, massive drop was witnessed in INDU's sales units with 64%
decline at 4,659 units that is followed by PSMC which registered
48% decline in sales volume over the same period of FY’08.
This could provide support to the ailing auto sector due to weakening
demand. There are, however, reports that FBR is unwilling to give
any concession to the auto sector with the argument that if the
government accommodates one sector all industries would also demand
the similar concessions in which case the sector may end up not
receiving any relief.

Cement export via Gwadar:

2008-12-01T10:47:00.000-08:00

Cement export via Gwadar:

manufacturers turn down government proposal:

The cement manufacturers have turned down the government's proposal to
export cement through Gwadar, because they termed it a costly and
unsustainable activity due to high cost of transportation.
APCMA also confirmed that cement manufacturers had rejected the
proposal due to unsupportable infrastructure at Gwadar port and rise
in cost. The exporters said that they are already exporting cement at
lowest margin due to high competition in the world market and
shrinking construction industry in the Middle East and UAE. Cement
export through Gwadar would put additional burden of some US$6-8 per
ton cement, which is unsuitable for the industry. However, he added
that if the government agreed to pay some subsidy on cement export
and provided facilities at Gwadar, then APCMA would consider the
proposal.

Government not to tax agriculture income says Tarin:

2008-11-29T09:33:00.001-08:00

Government not to tax agriculture income says Tarin:

Adviser to PM on Finance has said that the government is not planning to impose tax on agriculture as there is no pre-condition from the IMF. However in order to meet the tax to GDP ratio to 15% in a few years the government will have to bring as many sectors as possible in the tax net. The government plans to impose taxes on real estate and stock market as well. For agriculture sector taxes may burden the already struggling sector.

Shelving of QGF sell-off to cost government $1 billion:

2008-11-29T09:27:00.000-08:00

Shelving of QGF sell-off to cost government $1 billion:

The federal government has abandoned the idea of divesting Qadipur Gas Field on the pretext that it was being opposed by the workers and opposition parties - a decision that would cost one billion dollars to the federal kitty. Earlier the government had decided to sell off 37% of its share in the Qadirpur gas field for about US$2 billion; however the total value of its assets is of over US$7 billion. This bodes positive for OGDC as, Qadirpur is the second largest gas field after Sui, with OGDC having 75% stakes in it. The field provides 50% of the gross gas revenues for OGDC.

Pakistan gets $3.1bn first tranche of IMF loan

2008-11-29T09:18:00.000-08:00

Pakistan gets $3.1bn first tranche of IMF loan

The country received its first tranche of $3.1 bn of IMF loan yesterday as per the spokesman of SBP. This will help to shore up the forex reserves which as per the week ended November 22nd has declined to $6.6 billion. The inflow will help stabilize the Rupee Dollar parity and will give enough liquidity to ensure that the country is able to meet its external obligations for some months to come. However as per the IMF the country needs in excess of $13 billion in the current fiscal to meet its external obligations including the yearly debt services of around $3.5 billion. IMF has pledge around $4.7 billion for the current fiscal while the rest of the amount the Fund envisages will be met by other bilateral and donor institutes.

Forex reserves fall to $6.6bn

2008-11-29T09:01:00.000-08:00

Forex reserves fall to $6.6bn

The reserves fell by $ 40 million in the week ended November 22nd to stand at $6.6 billion. The SBP own reserves fell to $3.44 billion from $3.46 billion a week earlier, and reserves held by commercial banks were $3.16 billion compared with $3.18 billion. Earlier SBP received its first tranche of $3.1 billion from IMF and the reserves numbers will show a healthy increase in the figures for the week ended December 4th.

Why Lehman Bros went bust; what it means for you

2008-10-05T13:02:00.000-07:00

Why Lehman Bros went bust; what it means for you

Lehman Brothers is no more. Merrill Lynch has gone down the Bank of America maw. AIG too could go belly up. With a doubt, these developments in America are the most shocking events to have hit global financial markets. So where did it all begin? And what does it mean for the Indian stock markets? Find out. . .
What is (or was) Lehman Brothers?
America's fourth-largest investment bank Lehman Brothers Holdings Inc has filed the biggest bankruptcy petition known to mankind.
The 158-year-old firm was founded by brothers Henry, Emanuel and Mayer Lehman, Jewish immigrants to the US from Germany, in 1850. Henry set up a general store in Alabama in 1844 and was later joined by his brothers. In 1850 they set up the merchant bank in New York after having made money in railway bonds. So what went wrong?

Lehman Bros, which till June 2008 had not reported a quarterly loss even once, had earlier survived many an economic crises, like railroad bankruptcies of the 1800s, the Great Depression in the 1930s, and the collapse of Long-Term Capital Management in the 1990s.
Thus the collapse of the giant investment bank came as a major shock for the entire world markets that plunged after Lehman filed a Chapter 11 petition with US Bankruptcy Court in Manhattan.
The $613 billion (some estimates put the size at $639 billion) bankruptcy thus throws up the question: why did the Wall Street giant go bust? Here's why. . .

Why did Lehman Brothers go bankrupt?
The giant investment bank succumbed to the sub-prime mortgage crisis that has rocked the United States and the global economy. Lehman was strangled by a massive credit crisis and fast plummeting real estate prices.
The gargantuan $60 billion loss in bad real estate loans forced the bank to file for bankruptcy.
However, the fall of the 158-year-year institution that started cotton trade in US before the American Civil War and financed the railroad that built a nation, got hit by a large dose of bad luck, pride, arrogance and greed. Primarily, the pride of its chief executive office Richard Fuld.
But there were more reason. Check out what they were. . .

Lehman's collapse was also triggered by the refusal of other banks to do business with it because of its complex and, at times, opaque ways of trading. Housing loans made by the bank to people with little support made these loans very risky, and when interest rates rose, these borrowers could no more repay Lehman. This led to huge losses, the extent of which is not yet clear.
Thus other banks stopped trading with Lehman. This led to it losing almost all business and triggered its fall.
The final straw for Lehman was the fact that both Barclays Plc of the United Kingdom and Bank of America Corp pulled out of takeover talks. BofA bought out Merrill Lynch for $50 billion.
However, Barclays has now said that it is in discussions with Lehman Brothers about buying certain assets of the stricken US investment bank.
"Barclays confirms that it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclay's shareholders," Britain's third largest bank said in a statement.

When other banks do not want to buy Lehman, why is Barclays interested?
Barclays wanted to buy Lehman out at a discount, so to speak. But when Lehman CEO Fuld decided that his bank was worth much more than what Barclays had apparently offered, Barclays stepped back.
Now that Lehman has filed for bankruptcy, its assets are available fairly cheap. However, the biggest problem is to take on Lehman's enormous liabilities.

How far is the CEO of the company responsible for Lehman's fall?
Wall Street analysts believe that it was the 'hubris' of Richard Fuld, the 62-year-old CEO of Lehman, who did not take the telltale signs of impending doom very seriously. Fuld, nicknamed The Gorilla for his foul temper, intimidating presence and tough talk, rejected many bids to save Lehman because he thought that the sinking giant was much bigger than Wall Street was giving it credit for, and wanted to get more price for the sale of the company.
Analysts say if the bank was sold just a week before it went kaput, it could have been saved the ignominy of a bankruptcy, but Fuld was far too adamant to see reason. Result: the end of a 158-year-old financial giant.
Could the United States government helped, like it helped Bear Stearns in May this year, and Fannie Mae and Freddie Mac earlier this month?
The US government could have helped, but US Treasury Secretary Henry Paulson said that it would not use up any more taxpayer dollars to bail out Lehman Brothers as it would lead to investment banks getting away with their gambling ways. Paulson had bailed out Fannie Mae, Freddie Mac and Bear Stearns, saying that if the government had not done so, the US housing loan market would have collapsed leading to gigantic losses for hundreds of banks all over the globe that have invested in US property.
Paulson, however, believes that a brokerage major like Lehman, which does not have a direct connection with ordinary people who have taken on home loans, need not be bailed out as it would not cause any systemic damage to the US economy.
Will everyone in Lehman lose their jobs?
The bankruptcy administrators, PricewaterhouseCoop ers, feels that as Lehman's operations were essentially centralized at New York, the folding up of the investment banker in the US will have a telling impact on all its operations globally.
Over 5,000 employees in the UK have already lost their jobs, while about 20,000 in the US might as well forget going back to their work stations. About 2,500 Lehman employees in India too face the axe.

Will the whole bank be liquidated?
Unlikely, at least for now. The US Chapter 11 that deals with bankruptcy says that PwC, the administrators, can go about taking its time to find good offers and buyers for Lehman's 'least affected businesses.'
The entire exercise can take months before all of Lehman's assets are sold, given the complexities linked to the bankruptcy.

What about the Bank of America and Merrill Lynch deal?
Merrill Lynch's buy out by Bank of America is also a shocking development. ML, saw the writing on the wall once it guessed that Lehman was going bust, and decided to sell out before it actually has to file a bankruptcy petition..
What about the insurance giant AIG?
The world's largest insurer, American International Group, has been downgraded by credit rating agencies and is racing against time to find a multi billion dollar infusion to stay afloat. US Federal Reserve officials and two leading banks, JPMorgan Chase and Goldman Sachs, were negotiating to put together $75 billion package to save the insurance giant to stave off crisis.
AIG has sought $40 billion in bridge loan to stave off the crisis. But the Fed rebuffed the request. AIG's ills came to fore, when three leading credit rating agencies - Standard and Poor's Moody's and Fitch - lowered the company's credit scores.

Who could be the next to fall?
Some Wall Street analysts, reports The Guardian, name Washington Mutual as the next financial major to 'find itself in serious trouble.'
However, the even bigger worry is whether the world's largest securities firms, Goldman Sachs and Morgan Stanley, would be able to survive this brutal financial crisis. But many say that these two gaints will not melt down as they have 'done a better job of spreading their bets across world markets and are also more diversified, less leveraged and have managed such risks much better.'

What do Indian markets fear?
The fall of two global financial behemoths -- Lehman Brothers and Merrill Lynch -- is expected to dent India Inc's ability to raise resources via the equity route.
Experts feel that such events significantly increase the risk perception, which in turn will put all future investments by institutional investors such as pension or endowment funds, on the back burner.
While the public issue market has already dried up, the private equity funds are also becoming conservative in terms of pricing. This is resulting in either inordinate delays in concluding deals or transactions being called off.
There are many instances of private equity fund managers refusing to go ahead with deals after signing the term sheet. Sources said that a leading fund conducted due diligence on two companies in the last fortnight but did not close either deal primarily because of the developments in the US, their home country.
The crisis faced by Merrill Lynch and Lehman Brothers is expected to have a cascading effect on PE firms too.

Will it hit the Indian growth story?
The ongoing financial sector crisis in the United States and its repercussions on developed markets worldwide will result in lower capital inflows into emerging markets like India, economists and government officials said today.
At the same time, they called for the government to make it easier for Indian companies to borrow overseas by easing the restrictions that have been imposed in the past to reduce excessive liquidity in the system and control inflation.
This will, in turn, lead to a slowing in investment growth in the months ahead. As lending gets tighter and investment flows dry, corporate India will find it more dfficult to raise both equity and debt.
Technology firms are shivering
Lehman Brothers' bankruptcy filing may well prove to be the last straw for Indian IT firms, which were expecting the second half of FY09 to be better. As a result of the US financial market crisis, analysts do not expect Indian IT firms to sign any significant contracts in the banking, financial services and insurance (BFSI) space in the months to come.
While IT firms do not disclose client-specific details, it's estimated that Lehman Brothers has outsourced deals amounting to anywhere between Rs 550 crore and Rs 700 crore (annually) to numerous IT firms, including majors like Tata Consultancy Services, Satyam Computer Services and Wipro. Lehman Brothers, say sources, works with 14 services providers in India - Wipro and TCS being the largest. It also has investments in a few IT firms. It's not clear if these holdings will be liquidated to raise funds.
Moreover, the sources add that Lehman Brothers' unit in India has issued termination letters to a majority of its 2,500 employees.

What kind of investment does Lehman have in India?
Lehman does not have direct large holding in the Indian stock markets. These holdings are estimated at around $200 million, including Participatory Notes. This figure is not enough to cripple the Indian stock markets.
But Lehman has exposure to the Indian stock market through special purpose vehicles. This exposure to real estate stocks is said to be of about $1.5 billion, enough to shake up the markets.

Why Lehman Bros went bust; what it means for you
September 16, 2008

Lehman Brothers is no more. Merrill Lynch has gone down the Bank of America maw. AIG too could go belly up. With a doubt, these developments in America are the most shocking events to have hit global financial markets. So where did it all begin? And what does it mean for the Indian stock markets? Find out. . .
What is (or was) Lehman Brothers?
America's fourth-largest investment bank Lehman Brothers Holdings Inc has filed the biggest bankruptcy petition known to mankind.
The 158-year-old firm was founded by brothers Henry, Emanuel and Mayer Lehman, Jewish immigrants to the US from Germany, in 1850. Henry set up a general store in Alabama in 1844 and was later joined by his brothers. In 1850 they set up the merchant bank in New York after having made money in railway bonds. So what went wrong?

Lehman Bros, which till June 2008 had not reported a quarterly loss even once, had earlier survived many an economic crises, like railroad bankruptcies of the 1800s, the Great Depression in the 1930s, and the collapse of Long-Term Capital Management in the 1990s.
Thus the collapse of the giant investment bank came as a major shock for the entire world markets that plunged after Lehman filed a Chapter 11 petition with US Bankruptcy Court in Manhattan.
The $613 billion (some estimates put the size at $639 billion) bankruptcy thus throws up the question: why did the Wall Street giant go bust? Here's why. . .

Why did Lehman Brothers go bankrupt?
The giant investment bank succumbed to the sub-prime mortgage crisis that has rocked the United States and the global economy. Lehman was strangled by a massive credit crisis and fast plummeting real estate prices.
The gargantuan $60 billion loss in bad real estate loans forced the bank to file for bankruptcy.
However, the fall of the 158-year-year institution that started cotton trade in US before the American Civil War and financed the railroad that built a nation, got hit by a large dose of bad luck, pride, arrogance and greed. Primarily, the pride of its chief executive office Richard Fuld.
But there were more reason. Check out what they were. . .

Lehman's collapse was also triggered by the refusal of other banks to do business with it because of its complex and, at times, opaque ways of trading. Housing loans made by the bank to people with little support made these loans very risky, and when interest rates rose, these borrowers could no more repay Lehman. This led to huge losses, the extent of which is not yet clear.
Thus other banks stopped trading with Lehman. This led to it losing almost all business and triggered its fall.
The final straw for Lehman was the fact that both Barclays Plc of the United Kingdom and Bank of America Corp pulled out of takeover talks. BofA bought out Merrill Lynch for $50 billion.
However, Barclays has now said that it is in discussions with Lehman Brothers about buying certain assets of the stricken US investment bank.
"Barclays confirms that it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclay's shareholders," Britain's third largest bank said in a statement.

When other banks do not want to buy Lehman, why is Barclays interested?
Barclays wanted to buy Lehman out at a discount, so to speak. But when Lehman CEO Fuld decided that his bank was worth much more than what Barclays had apparently offered, Barclays stepped back.
Now that Lehman has filed for bankruptcy, its assets are available fairly cheap. However, the biggest problem is to take on Lehman's enormous liabilities.

How far is the CEO of the company responsible for Lehman's fall?
Wall Street analysts believe that it was the 'hubris' of Richard Fuld, the 62-year-old CEO of Lehman, who did not take the telltale signs of impending doom very seriously. Fuld, nicknamed The Gorilla for his foul temper, intimidating presence and tough talk, rejected many bids to save Lehman because he thought that the sinking giant was much bigger than Wall Street was giving it credit for, and wanted to get more price for the sale of the company.
Analysts say if the bank was sold just a week before it went kaput, it could have been saved the ignominy of a bankruptcy, but Fuld was far too adamant to see reason. Result: the end of a 158-year-old financial giant.

Could the United States government helped, like it helped Bear Stearns in May this year, and Fannie Mae and Freddie Mac earlier this month?
The US government could have helped, but US Treasury Secretary Henry Paulson said that it would not use up any more taxpayer dollars to bail out Lehman Brothers as it would lead to investment banks getting away with their gambling ways. Paulson had bailed out Fannie Mae, Freddie Mac and Bear Stearns, saying that if the government had not done so, the US housing loan market would have collapsed leading to gigantic losses for hundreds of banks all over the globe that have invested in US property.
Paulson, however, believes that a brokerage major like Lehman, which does not have a direct connection with ordinary people who have taken on home loans, need not be bailed out as it would not cause any systemic damage to the US economy.

Will everyone in Lehman lose their jobs?
The bankruptcy administrators, PricewaterhouseCoop ers, feels that as Lehman's operations were essentially centralized at New York, the folding up of the investment banker in the US will have a telling impact on all its operations globally.
Over 5,000 employees in the UK have already lost their jobs, while about 20,000 in the US might as well forget going back to their work stations. About 2,500 Lehman employees in India too face the axe.

Will the whole bank be liquidated?
Unlikely, at least for now. The US Chapter 11 that deals with bankruptcy says that PwC, the administrators, can go about taking its time to find good offers and buyers for Lehman's 'least affected businesses.'
The entire exercise can take months before all of Lehman's assets are sold, given the complexities linked to the bankruptcy.

What about the Bank of America and Merrill Lynch deal?
Merrill Lynch's buy out by Bank of America is also a shocking development. ML, saw the writing on the wall once it guessed that Lehman was going bust, and decided to sell out before it actually has to file a bankruptcy petition..
What about the insurance giant AIG?
The world's largest insurer, American International Group, has been downgraded by credit rating agencies and is racing against time to find a multi billion dollar infusion to stay afloat. US Federal Reserve officials and two leading banks, JPMorgan Chase and Goldman Sachs, were negotiating to put together $75 billion package to save the insurance giant to stave off crisis.
AIG has sought $40 billion in bridge loan to stave off the crisis. But the Fed rebuffed the request. AIG's ills came to fore, when three leading credit rating agencies - Standard and Poor's Moody's and Fitch - lowered the company's credit scores.
Who could be the next to fall?
Some Wall Street analysts, reports The Guardian, name Washington Mutual as the next financial major to 'find itself in serious trouble.'
However, the even bigger worry is whether the world's largest securities firms, Goldman Sachs and Morgan Stanley, would be able to survive this brutal financial crisis. But many say that these two gaints will not melt down as they have 'done a better job of spreading their bets across world markets and are also more diversified, less leveraged and have managed such risks much better.'

What do Indian markets fear?
The fall of two global financial behemoths -- Lehman Brothers and Merrill Lynch -- is expected to dent India Inc's ability to raise resources via the equity route.
Experts feel that such events significantly increase the risk perception, which in turn will put all future investments by institutional investors such as pension or endowment funds, on the back burner.
While the public issue market has already dried up, the private equity funds are also becoming conservative in terms of pricing. This is resulting in either inordinate delays in concluding deals or transactions being called off.
There are many instances of private equity fund managers refusing to go ahead with deals after signing the term sheet. Sources said that a leading fund conducted due diligence on two companies in the last fortnight but did not close either deal primarily because of the developments in the US, their home country.
The crisis faced by Merrill Lynch and Lehman Brothers is expected to have a cascading effect on PE firms too.

Will it hit the Indian growth story?
The ongoing financial sector crisis in the United States and its repercussions on developed markets worldwide will result in lower capital inflows into emerging markets like India, economists and government officials said today.
At the same time, they called for the government to make it easier for Indian companies to borrow overseas by easing the restrictions that have been imposed in the past to reduce excessive liquidity in the system and control inflation.
This will, in turn, lead to a slowing in investment growth in the months ahead. As lending gets tighter and investment flows dry, corporate India will find it more difficult to raise both equity and debt.
Technology firms are shivering
Lehman Brothers' bankruptcy filing may well prove to be the last straw for Indian IT firms, which were expecting the second half of FY09 to be better. As a result of the US financial market crisis, analysts do not expect Indian IT firms to sign any significant contracts in the banking, financial services and insurance (BFSI) space in the months to come.
While IT firms do not disclose client-specific details, it's estimated that Lehman Brothers has outsourced deals amounting to anywhere between Rs 550 crore and Rs 700 crore (annually) to numerous IT firms, including majors like Tata Consultancy Services, Satyam Computer Services and Wipro. Lehman Brothers, say sources, works with 14 services providers in India - Wipro and TCS being the largest. It also has investments in a few IT firms. It's not clear if these holdings will be liquidated to raise funds.
Moreover, the sources add that Lehman Brothers' unit in India has issued termination letters to a majority of its 2,500 employees.

What kind of investment does Lehman have in India?
Lehman does not have direct large holding in the Indian stock markets. These holdings are estimated at around $200 million, including Participatory Notes. This figure is not enough to cripple the Indian stock markets.
But Lehman has exposure to the Indian stock market through special purpose vehicles. This exposure to real estate stocks is said to be of about $1.5 billion, enough to shake up the markets.

ACCOUNTS AND FINANCE JOBS 05-10-2008

2008-10-05T12:47:00.000-07:00

Accounts Officer required by a company at Sahiwal with B.com+3-5 Years Expereince. Max Age 35 Years.
Skills: Good in Financial control, credit and inventory management.
Apply before 08-10-2008
at

Box No. 102 C/O Daily Jang Lahore.

Production accountat required by Haseeb Waqas Group with B.Com+5-7 Years Exp in Distelly or chemicals or paint factory. agae Limit 25-35.

Apply at

Manager Human Resources
Haseeb Waqas Group of Companies.
108-B/1, M.M. ALAM Road, Gulberg-III, Lahore.

Email : careers@hwgc.com.pk

CHIEF ACCOUNTANT REQUIRED WITH B.COM+CA-INTER / ACMA + 8YEARS EXPERIENCE.

ACCOUNT OFFICER REQUIRED WITH B.COM+ACMA+3 YEARS EXPEREIENCE.

APPLY BEFORE 11-10-2008 AT

BY SURAJ FERTILIZER INDUSTRIES (PVT) LTD.
40-A, LAWRENCE ROAD, LAHORE TEL 111-777-123

CHARTERED ACCOUNTAT REQUIRED BY GROUP OF COMPANIESENGAGED IN STEEL BUSINESS APPLY WITHIN 7 - DAYS AT MANAGER ADMINISTRATION C/O P.O.BOX#855 LAHORE.

SENIOR ACCOUNTANT + ASS. ACCOUNTANT REQUIRED BY NLC FOR DETAIL VISIT WWW.NPJOBS.BLOGSPOT.COM

KSE POSITION:

2008-10-03T14:43:00.000-07:00

KSE POSITION:

KSE floor is major reason for price discovery mechanism. KSE board members unanimously
voted for current floor. The measures discussed between the SBP Governor, Ministry of Finance and the KSE are in our view likely to prove inadequate to drive upside in the
market. Likewise, a near term inflection point signaling a worthwhile entry point is
also not yet visible. For investors seeking exposure to the market we suggest only PPL and HUBCO.

BUY BACK OF SHARES BY OGDCL AND NBP

2008-09-11T13:11:00.000-07:00

BUY BACK OF SHARES BY OGDCL AND NBP

OUR ESTIMATE FOR UP SIDE POTENTIAL IN SHARES FURTHER STRENGTHED BY ANNOUNCEMENTS OF OGDCL AND NBP.

YOU MAY CHK OUR VIEW FOR BUYING OF SHARES.

SHARES HAVING MORE THAN 50% UPSIDE POTENTIAL

2008-08-31T12:55:00.000-07:00

SHARES HAVING MORE THAN 50% UPSIDE POTENTIAL

FOLLOWING ARE SHARES THOSE HAVE 50% OR MORE UPSIDE POTENTIAL.

APL POTENTIAL 54%
POL POTENTIAL 62%
PPL POTENTIAL 70%
NBP POTENTIAL 68%
ENGRO CHEM. POTENTIAL 69%
FFBL POTENTIAL 51%
HUB POWER POTENTIAL 74%
DGKC POTENTIAL 59%
LUCKY CEMENT POTENTIAL 69%

"THE BEST SHARES TO BUY PSO AND PPL"

2008-08-31T12:54:00.000-07:00

THE BEST SHARES TO BUY PSO AND PPL

AT THE MOMENT THE BEST SHARES TO BUY ARE PSO AND PPL AS UNDER
PSO CURRENT PRICE RS. 279.99 AND FAIR VALUE RS. 510, IT MEANS PSO HAS 81% UPDSIDE POTENTIAL.

PPL CURRENT PRICE RS. 212 AND FAIR VALUE RS. 360, IT MEANS PPL HAS 70% UPDSIDE POTENTIAL.

ON THE BASIS OF ABOVE POTENTIAL, I RECOMMEND TO BUY PPL AND PSO

"FAIR VALUE OF LUCKY CEMENT" RS. 90

2008-08-23T14:02:00.000-07:00

"FAIR VALUE OF LUCKY CEMENT" RS. 90

AS PER LATEST DEVELOPMENT AT CEMENT SECTOR AND ESPACIALLY ON LUCKY CEMENT END, WE SUGGEST LUCKY CEMENT FAIR VALUE OF RS.90. WE SUGGEST BUY.

FAIR VALUE MILLAT TRACTORS RS. 287

2008-08-12T09:05:00.000-07:00

FAIR VALUE MILLAT TRACTORS RS. 287

AS PER LATEST DEVELOPMENT PLANS BY MILLAT TRACTORS, IT IS EXPECTED MILLAT TRACTORS FAIR VALUE IS RS. 287.

FAIR VALUE OF HUBCO RS 34

2008-08-11T10:28:00.003-07:00

FAIR VALUE OF HUBCO IS RS 34 DUE TO HIGHEST PAYOUT

FAIR VALUE OF HUBCO RS 34

2008-08-11T10:28:00.001-07:00

FAIR VALUE OF HUBCO IS RS 34 DUE TO HIGHEST PAYOUT

FAIR VALUE OF PPL PAKISTAN RS. 374

2008-08-11T10:20:00.000-07:00

FAIR VALUE OF PPL PAKISTAN RS. 374

FAIR VALUE OF PPL PAKISTAN IS RS. 374 DUE TO ITS HIGHEST GROWTH AND CURRENT TREND OF CRUDE OIL PRICES

REVISED FAIR VALUE OF SHARES

2008-08-10T06:06:00.000-07:00

WE HAVE REVISED FAIR VALUE OF FOLLOWING SHARES AS UNDER

SHARE REVISED FAIR VALUE
MCB 310
BAFL 50
AKBL 41
NIB 11.50

"BUY" SHARES" AT KSE ON FAIR "VALUE OF SHARES" BASIS

2008-08-06T09:47:00.000-07:00

""BUY SHARES" AT "KSE" ON "FAIR VALUE OF SHARES" BASIS

"SHARES" "CURRENT PRICE" "FAIR VALUES"

"APL" 264 412
"PSO" 330 512
"OGDCL" 105 138
"POL" 265 440
"PPL" 99 287
"UBL" 69 97
"DGKC" 47.98 61

KEEPING ON THE ABOVE SAID PRICES. ACCUMULTAE THE SHARES ON THE BASIS OF "FAIR VALUE OF SHARES".

MUHAMMAD IJAZ
0321-4767244

JOBS IN PAKISTAN visit www.pakjobs2008.blogspot.com

2008-08-02T10:30:00.001-07:00

JOBS IN PAKISTAN visit www.pakjobs2008.blogspot.com

"FAIR VALUE" OF "CRESECT STEEL" "CSAP" RS. 162

2008-08-02T07:49:00.000-07:00

"FAIR VALUE" OF "CRESECT STEEL" "CSAP" RS. 162

Current Price: Rs. 45.98

CSAP emerges as the golden bird among the small cap scrips trading at KSE. Crescent Steel is currently trading atCY09E P/Ex of mere 1.9x (sector CY09Ex: 7x). The scrip currently offers a massive TSR of 72% (including 8%dividend yield) to the intrinsic value of Rs 162/share. Sales are expected to surge by a 3-year CAGR of 27%,based on an expected increase in steel notional capacity & increased product price. This coupled with strong otherincome in the form of dividends would support the bottom line to grow at 3-year CAGR of 35%. Major risks to ourvaluation include slump in consumers’ purchasing power & increase in discount rate. We suggest investors toAccumulate at current market price of Rs 45.98/share.

"FAIR VALUE" OF "NETSOL" RS. 174

2008-08-02T07:47:00.000-07:00

"FAIR VALUE" OF "NETSOL" RS. 174

current Price: Rs.75.39

The company’s recent breakthrough into the European market and newly elected government is likely to increasedemand for their products. Netsol has decided to acquire 100% stake in Netsol Tech Europe (NTE) by private equityplacement amounting to Rs1.0b (10.03m shares at Rs99.85 per share) and also plans to increase its Paid-up capital by88% to 150m shares. Based on these investments coupled with appreciation of US dollar will make Netsol moreattractive for international companies looking to outsource in this area. In Jul07 US$ stood at PKR60.4 which rose toPKR67.78 in Jun’08, depicting an increase of 12.2%. Going forward, the net sales revenue of the company is expected toincrease at a 4 year CAGR of 24.3%. Keeping in mind the forecasted potential in revenue growthand appreciating dollar, we recommend investors to take long term exposure in the stock. The stock offers 56.7% TSRfrom our target price of Rs174 per share.

FAIR VALUE OF APL RS. 462

2008-08-02T07:44:00.000-07:00

"FAIR VALUE" OF "APL" RS. 462

Current Price: Rs.331.53

APL’s two major advantages are that; it is a part of a vertically integrated group and it’s less susceptibility towardsoil price fluctuations because its volumes are driven from non-energy products and furnace oil, which are deregulatedproducts. APL has been aggressively expanding storage capacity and retail network which currently stands at 200outlets. It handles approximately 28% of NRL and ARL offtake and is expected to generate approximately Rs838m inFY’08. Future plans include building of new terminal at Karachi at cost of Rs100m, new storage capacity of 2,700tons for HSD commissioned at Bulk oil terminal at Rawalpindi & sale of LSFO Attock Gen from FY10. Stock is trading at alow forward PER of 6.49x and gross margins are expected to remain in the range of 5.0% by the end of next fiscal year.At the current price level the scrip is trading at it’s 52 week low of Rs331.53/share and from this level the scrip’s TSR is33.3% (including dividend yield of 5.1%) from our target price of Rs462/share.

"FAIR VALUE" OF PSO RS. 471

2008-08-02T07:40:00.000-07:00

"FAIR VALUE" OF PSO RS. 471

Current Price: Rs.381.0

Superior dividend payout of 36% in FY08 & 62% in FY’09 is the key investment attraction for this stock. Also the scrip is trading at a low short term forward FY08 PER of 5.46x as against sector’s PER of 6.81x. Besides this, the company has the largest infrastructure & retail network of POL products with 69% of total market share. Going forward the inventory gains witnessed during the last fiscal year are likely to shrink and the profit margins will go down. Net margin of
the company in FY09 is likely to be around 2% Investors are advised to take short term exposure in the stock based on high dividend yield and low forward PER. From the current price of Rs381.0, the stock offers TSR of 27.1% (including dividend yield of 7.9%) from our target price
of Rs471 per share

"FAIR VALUE" "POL" OF RS. 399

2008-08-02T07:39:00.001-07:00

"FAIR VALUE" "POL" OF RS. 399

Current Price: Rs.284.29

The main earning drivers for POL are the rising international oil prices which have helped in offsetting the decline in productionfrom major oil field, Pindori. The production outlook of the company is stable in the short to medium term due tocontinued problems at Pindori, however production from Tal block and Adhi field is likely to augment in the coming yearsdue to development plans and significant reserves of these two field which may help the production outlook for the long term toimprove to a positive stance. Other income will be an important revenue driver and is likely to contribute Rs1.3b in FY’09 dueto increased financial assets income & dividend income from associates and subsidiaries. POL holds 25.0% stake in NRL &7.0% stake in APL. Also the company is likely to book capital gain of Rs1.79b in its investment in APL having an impact ofRs9.06/share. Forward PER for FY09 is on the lower side at 7.30x. At the current price of Rs284.29, the stock is trading at TSR of35.7% (including dividend yield of 7.0%) from our target price of Rs399/share.

"FAIR VALUE" "PPL" RS. 315

2008-08-02T07:36:00.000-07:00

"FAIR VALUE" "PPL" RS. 315

Current Price: Rs.195.50

During 9M08, 84% of PPL’s sales revenue was generated through natural gas sales. International crude oil prices, whichdetermine well head gas prices, are expected to remain around US$100 in the medium term & expiry of 2002 Sui &Kandhkot gas price agreement on Dec07, will be strong catalysts for revenue growth in FY09-FY11. About 60% of thecompany’s gas sales revenue comes from Sui & Kandkot and in 1HY09, the well head gas price is expected to increase by18% to Rs126.8/mmbtu. During Jan-Jun08 the Arab Light Crude prices have risen by 78.4% to US$104.17/bbl fromUS$58.38/bbl in the same period last year. The net income of PPL is expected to grow by 32% in FY’09 and 11.6% inFY’10. At the current price level the stock is trading at a low forward PER of 5.52xBased on the upcoming upward revision in well head gas prices and forecasted sales revenue growth of above 30% inFY09, we recommend investors to take exposure in the stock for medium term. The stock currently offers TSR of 44.0%(including dividend yield of 6.1%) from our target price of Rs315 per share.

"FAIR VALUE" OF "OGDCL" RS. 160

2008-08-02T07:34:00.000-07:00

"FAIR VALUE" OF "OGDCL" RS. 160

Current Price Rs.105.5

OGDC’s gas reserves life is 30.7 years while that of oil is 12.3 years. The company has always had the most aggressive plantowards exploration and going forward in FY09-10 these activities are going to remain aggressive with target of 52-65wells. The company’s success ratio remained at 1:0.21 in FY08, despite a significant number of jobs carried over fromFY07, when success ratio stood at 1:0.24. The stock is trading at a low forward PEx of 6.88 based on the current stock price.Going forward the company’s net income is expected to grow at 28% in FY’09 & at a 3 year CAGR of 16% on the back oftop-line growth based on rise in production volumes and improved oil & gas prices. The dividend yield of the companyhas remained above 8.0% since FY06 and is expected to be highest in FY09 at 9.5%. At the current price of Rs105.5, the stock is trading at TSR of43.6% (including 9.5% dividend yield) from our PT of Rs160/share. We recommend investors to take long termexposure in the stock based on high dividend yield and forecasted increase in earnings

"FAIR VALUE" OF FFC RS. 145

2008-08-02T07:32:00.000-07:00

"FAIR VALUE" OF "FFC" RS. 145

Current Price Rs.120.0

FFC offers 27% TSR (including 10% dividend yield) from our Dec 08 PT of Rs.145/share.We expect FFC to show a stable Gross profit margin of 33% during CY08-CY10, while the net profit margins areestimated to average around 16% during the same period. FFC does not have any expansion plans to its core businessin the foreseeable future, and given the cash rich nature of the company, we expect FFFC to continue maintaining 100%payout ratio in the future. Major risks to our valuation include a more/less than anticipated increase in Urea prices, shortage of Feedstock gas and change in subsidy on DAP, Urea and gas & increase in discount rate.

FFBL FAIR VALUE Rs. 42

2008-07-31T12:04:00.000-07:00

FFBL Current Price: Rs. 27.00

FFBL FAIR VALUE Rs. 42

FFBL is currently trading at CY08E P/Ex of 7.7x (sector CY08E P/E: 10.5x). The scrip offers 49% TSR (including 13% dividend yield) from our Dec 08 PT of Rs. 42/share. FFBL is now set to produce 637k & 675k tons of urea & DAP p.a. from CY09. FFBL is likely to benefit from ever increasing international DAP prices coupled with assured demand of the product. The company also has the advantage of timely supply of Phosacid (basic DAP raw material) courtesy its JV with PMP Morac. FFBL sales revenue is expected to grow at a 3 year CAGR of 100%, whereas PAT is expected to increase by 3-year CAGR of 21%. We expect the company to continue its high divided payout in the future. Major risks to our valuation include a more/less than anticipated increase in DAP prices, global shortage of Phosacid, change in subsidy on DAP and Urea, increase in discount rate. We recommend Buy at current levels.

FABL "FAYSAL BANK" FAIR VALUE : Rs.60

2008-07-31T12:02:00.000-07:00

FABL Current Price: Rs.26.80

FABL "FAYSAL BANK" FAIR VALUE : Rs.60

Faysal Bank (FABL) is currently trading at 48% discou(0.85x) to 2nd tier banks’ average CY08E P/Bx of 1.6x. Ttranslates into 63% TSR (including 8% dividend yield) relation to our intrinsic value of Rs 60/share. Faysal Bankexpected to post a modest 3-year CAGR of 10% in nrevenues, whereas net earnings are expected to surge arate of 13%, despite lower ROE of 9% for CY08E. Wbelieve the scrip calls for Accumulate stance at curremarket price of Rs26.8/share.

"NBP" "FAir VALUE" Rs 207

2008-07-31T11:59:00.000-07:00

"NBP" is attractive at current levels to Accumulate

"NBP Current" Price Rs.110.91

"NBP FAir VALUE" Rs 207

Recent slide in the index has made NBP the most attractive scrip in the sector, trading even below its book value. NBP is currently trading at CY08E P/Bx of 0.75 (sector CY08E P/B: 1.4). NBP’s historical (CY06-CY07) P/Bx has averaged 2.0x. NBP’s intrinsic value arrives at Rs 207/share, offering 55% TSR (including 8% dividend yield) from the current market price of Rs. 110.9/share. National Bank of Pakistan is expected to post a decent 3-year CAGR of 12% in revenues, whereas net earnings are expected to increase at a rate of 14%, despite lower ROE of 18% for CY08E. We believe the scrip is attractive at current levels to Accumulate.

FAIR VALUE OF LUCKY CEMENT RS. 98

2008-07-30T08:47:00.000-07:00

FAIR VALUE OF LUCKY CEMENT RS. 98

DUE TO ECONOMICAL AND FINANCIAL BURDEN, WE ASSUME LUCKY CEMENT FAIR VALUE RS. 98

SHARES TO BUY AS ON 27-07-2008 KSE SHARES UP SIDE POTENTIAL

2008-07-27T12:46:00.000-07:00

FOLLOWING ARE SHARES TO BUY AT KSE

APL FAIR VALUE 440, CURRENT PRICE 327, APL UP SIDE POTENTIONAL 34%

PSO FAIR VALUE 535, CURRENT PRICE 405, PSO UP SIDE POTENTIONAL 32%

OGDCL FAIR VALUE 138, CURRENT PRICE 115.75, OGDCL UP SIDE POTENTIONAL 19%.

POL FAIR VALUE 440, CURRENT PRICE 313, POL UP SIDE POTENTIONAL 40%

PPL FAIR VALUE 287, CURRENT PRICE 228, PPL UP SIDE POTENTIONAL 26%

UBL FAIR VALUE 110, CURRENT PRICE 80.20, UBL UP SIDE POTENTIONAL 37%

NRL FAIR VALUE 354, CURRENT PRICE 244.5, NRL UP SIDE POTENTIONAL 44%

FFBL FAIR VALUE 45, CURRENT PRICE 28.80, FFBL UP SIDE POTENTIONAL 56%

PTCL FAIR VALUE 44, CURRENT PRICE 37.7, PTCL UP SIDE POTENTIONAL 18%

"KAPCO" - Kot Addu Power Compan "FAIR VALUE RS. 52

2008-07-21T12:40:00.000-07:00

"KAPCO" - Kot Addu Power Compan "FAIR VALUE RS. 52

KAPCO FAIR VALUE IS RS. 52 ON THE BASIS OF THE FOLLOWINGS:

1) INTRODUCTION:
Kot Addu Power Company Limited "KAPCO" is IPP of country with a total capacity to produce 980GWH (Giga watt per hour) per month and also has an expansion plan of 450MW of electricity. The company started operations in 1996 under the “Power Policy 1994”. The company has a total of 15 turbines generators (10 gas combustion turbines and 5 steam turbines).

2) The demand of power in the country has been rising that would increase the sales revenue of the "KAPCO"

3) "KAPCO" Expansion plan will add more value to the company.

4) "KAPCO" also has the impressive dividend pay-out history over the period

5) Outlook for the "KAPCO" is positive

"OGDCL" "Oil & Gas Development Company Ltd" - PRODUCTION

2008-07-21T12:31:00.000-07:00

"OGDCL" "Oil & Gas Development Company Ltd" - PRODUCTION

"OGDCL" OVERALL POSITIVE TREND

"OGDCL" showed 4.6% increase in crude oil production and stood at 43,350bpd during 2008 as against 41,435bpd in 2007.

This increase was due to rise in production from Kunnar, Chanda, Bobi and Mela fields. Gas production also showed an increase of 3.3% to 1,005mmcfd in 11mths’08 as compared to 973mmcfd in 11mths’07 mainly due to increased production from Qadirpur and Uch fields, which contributed 58.7% of the total gas production of the company.

"POL" - "Pakistan Oilfields Limited" PRODUCTION

2008-07-21T12:28:00.000-07:00

"POL" - "Pakistan Oilfields Limited" "PRODUCTION"

POL OVER ALL DECLINING TREND

POL showed decline in both oil and gas production. Oil production showed dou-ble-digit decline of 12.9% to 5,218bpd in 2008 as against 5,991bpd in 2007. oTHER THAN Pindori field, which showed continued problems from last six month and oil production from the field declined 42.5% during the period under review, Uchri and Pariwali fields also showed a DOWNWARD TREND of 13.9% and 0.5% respectively. These three fields contributed 65.2% of the total oil production of the company. Gas production stood at 44mmcfd in the said period as com-pared to 46mmcfd in the parallel period of last year, showing a fall of 4.0%.

"PPL - Pakistan Petroleum Limited" PRODUCTION

2008-07-21T12:18:00.000-07:00

"PPL" - "Pakistan Petroleum Limited" "PRODUCTION"

PPL showed rise in crude production on the back of additional pro-duction from Mela 1 during the period, crude oil production by the company stood at 4,031bpd in 11 months 2008 as against 2,726bpd in the year 2007Further to to Mela field, production from Tal block also showed an good rise of 37.4% during the period 2008 and contributed 17.1% of to-tal oil production of the company. Gas production declined nominally to 989mmcfd during 2008 as compared to 993mmcfd in 2007.

"FAIR VALUE" OF DG KHAN CEMENT - DGKC RS. 68

2008-07-19T16:58:00.000-07:00

"FAIR VALUE" OF DG KHAN CEMENT - DGKC RS. 68

FAIR VALUE OF DGKC IS RS. 68 AND AT THE MOMENT IT IS TRADING AT 48.60, 41% BELOW FROM THE FAIR VALUE OF RS. 68

FAIR VALUE OF PPL RS. 287

2008-07-19T16:54:00.000-07:00

"FAIR VALUE" OF "PPL RS. 287"

FAIR VALUE OF PPL IS RS 287 AND IT IS TRADING AT 205, 39% BELOW FROM THE FAIR VALUE OF RS. 287.

"FAIR VALUE" OF NRL RS. 354

2008-07-19T16:50:00.001-07:00

"FAIR VALUE" OF NATIONAL REFINERY LTD - NRL IS RS. 354.

AT THE MOMENT IT IS TRADING AT RS 238, 48% BELOW FROM THE FAIR VALUE OF RS. 354

Fair Value of FFBL Rs. 45

2008-07-19T16:46:00.001-07:00

"Fair Value of FFBL Rs. 45"

Fair Value of FFBL is Rs. 45 and at the moment it is trading at 26.50, 70% below from the fair value of Rs 45

Fair Value of UBL Rs. 110

2008-07-19T16:39:00.000-07:00

"Fair Value of UBL Rs. 110"

Fair Value of UBL is Rs 110 and It is trading at Rs 65 and it is 68% below from the Fair value of rs. 110

Fair Value of POL Rs. 440

2008-07-19T16:34:00.000-07:00

"Fair Value of POL Rs. 440 "

Fair value of POL is Rs. 440 and it is trading at Rs. 271 and it is 62% below from the fair Value.

"Fair Value" of Pak Suzuki Motor "PSMC" of Rs. 170

2008-07-19T16:30:00.000-07:00

"Fair Value" of Pak Suzuki Motor "PSMC" of Rs. 170

Fair value of Pak Suzuki Motor is Rs. 170 and it is trading at about 88% below from the Fair Value of Rs. 170. It is the best option to buy this shares.

Detailed 16 Salient Features "Trade policy 2008-09"

2008-07-19T15:57:00.001-07:00

Detailed 16 Salient Features "Trade policy 2008-09"

Salient features of Trade Policy 2008-09:

1) The export target for the fiscal year 2008-09 has been fixed at $22.10 billion, which represents a growth of 15% over the last year's exports worth $19.22 billion.

2) The total merchandise exports for the year 2007-08 were $19.22 billion with a record net increase (between 2006-07 and 2007-08) of $2.246 billion.

3) The total imports during the 2007-08 amounted to $39.97 billion giving rise to a trade deficit of $20.7 billion.

4) The underlying causes for this year's trade deficit were mainly the increase in oil prices raising its import bill to over $11.3 billion as against $7.3 billion last year; import of wheat at higher than previous prices; increase in price of palm oil from $502.7 PMT to $839.3 PMT; raw cotton imports due to crop shortfall; increase in import of machinery and increase in import of fertilizers and chemicals.

5) This year again the imports compared to last year have increased by $9.428 billion whereas exports have also increased by $2.246 billion.
Plant, machinery and equipment imported to setup a unit in DTRE scheme will be exempt from duty and taxes.

6) Inputs in DTRE will also be allowed to be imported from India, even if these are not included in the importable items from India, or manufactured locally.

7) The period of retention of raw material and components for export under temporary importation scheme (SRO 1065) may be increased from current 12 months to 18 months i.e. at par with DTRE.

8) It has been decided to increase the draw back rate by 1% of FOB value for 14 products i.e. (i) Tents, Canvas & Tarpaulin, (ii) Electric machinery,
(iii) Carpets, Rugs, & Mats, (iv) Sports Goods, (v) Footwear, (vi) Surgical Goods/Medical Instruments, (vii) Cutlery, (viii) Onyx manufactured, (ix) Electric
Fans, (x) Furniture, (xi) Auto Parts, (xii) Handicrafts, (xiii) Jewellery and (xiv) Pharmaceuticals .In order to facilitate the exports, the government has decided to introduce a new scheme where by a notified percentage of inputs may be allowed to be imported at zero duties against fob value of exports with flexibility to import any product among the notified list in any quantity within the overall entitlement of the exporter.

9) It is proposed to allow the temporary import of PET bottle scrap for manufacture and export of PSF in the DTRE scheme, subject to non-hazardous certification.

10) It has been decided to support the setting up of new pharmaceutical plants by providing it with the incentive of having an accelerated depreciation allowance facility of 90pc in the first year on investment in Plant Machinery and Equipment.

11) It has also been decided that Ministry of Health will draw up a proposal for establishing bio-availability and bio-equivalence laboratories in the National Institute of Health.

12) Export of free samples up to 5% of quantity is allowed against exports in the preceding year to pharmaceutical exporters.

13) In order to further facilitate exports in this sector it has now been decided to allow exporting companies to send free samples to the extent of 10% of the commercial quantity exported in the preceding year.

14) In addition pharmaceutical sector would also be allowed to retain 15% of their export proceeds.

15) To increase the exports of gems and Jewellery sector, and to encourage investment and remove all anti-export biases, gold, silver, platinum, palladium, diamond and precious stones be exempted from levy of customs duties & sales tax.

16) It has been decided that import of machinery / equipment for mining /quarrying and grinding of minerals (along with spares) would be allowed from India.

Important Measures in "Trade Policy 2008-09"

2008-07-19T15:52:00.000-07:00

Important Measures in "Trade Policy 2008-09"

A) Allows import of 136 more items from India

B) Indian CNG bus manufacturers wishing to establish factories allowed to send 10 buses to Pakistan as test consignment

c) Payment of customs duty, sales taxes on precious gems abolished

D) Overseas Pakistanis allowed to re-export imported vehicles

E) Import of academic, scientific and reference books allowed from India

F) New Halal Certification Board to be set up

Trade Policy 2008-09

2008-07-19T15:48:00.000-07:00

As per Trade Policy 2008-09, country’s exports Target is $22.1 billion and Import Target is at $30 billion. Commerce Minister said the government is to 15 percent increase in the country’s exports. Govt allow to import of 136 additional types of raw materials, machinery and transport fuels from India to facilitate export-oriented industries.

Customs duty and sales tax on gems has been deleted to increase exports. Also, import of machinery for mining and grinding of minerals has been allowed from India to promote export. The Govt has also allowed the import of 10-year-old and used buses and cement bulkers for use by industrial consumers.
Indian CNG bus manufacturers wishing to establish manufacturing facilities in Pakistan have been allowed to send 10 buses to Pakistan as test consignment. Overseas Pakistanis have been allowed to re-export their imported vehicles if they are unable to get them released due to higher tariff.
Import of academic, scientific and reference books has also been allowed from India, while the import of explosives and chemicals would be subject to a no-objection certificate from the Industries Ministry.
As per new policy also seeks to increase pharmaceutical exports by allowing 90 percent depreciation allowance on imported plants and equipments used in establishing new pharmaceutical plans. The Govt has also introduced initiatives to increase seafood, rice, handicrafts and horticulture exports.
As per trade policy has also announced a Halal Certification Board to establish certification and standards for the promotion of exports of halal food from the country.

TIPS FOR "KSE"

2008-07-17T13:05:00.000-07:00

AT THE MOMENT TIME IS BUY HUBCO, PPL AND OGDCL. HOPE WITHIN ONE MONTH 20% CAPITAL GAIN CAN BE ACHIEVED.

"KSE" SUPPORT / INJECTION OF FUND

2008-07-17T12:57:00.000-07:00

EOBI, STATE LIFE AND NIT WILL SUPPORT THE MARKET AT THE MOMENT. I HOPE NEXT WEEK WILL BE GOOD FOR THE MARKET

IMPACT OF REMOVAL OF DEEMED DUTY

2008-07-17T12:45:00.000-07:00

Impact of removal of deemed duty

At the moment refining capacity of Pakistan is 13.5m tons per annum whereas the total consumption is 18m tons during Year 2008. Gap between the demand & supply is met through imports; which is having its toll on the national kitty due to the burgeoning amount of oil import bill. The total oil import bill is US$13Billion 2008 up 78% over US$7.3Billion 2007. Removal of deemed duty will have a negative impact on the refining sector as it is a significant source of revenue for the refineries. It’s removal or reduction will make refineries to put on hold their expansion plans and those refineries that are under construction or plan to enter Pakistan may decide to invest else where making the country to continue to dependent on oil imports.

"KSE" "SUPPORT FUND" OF RS. 50 BILLION

2008-07-17T12:38:00.000-07:00

"KSE" SUPPORT FUND OF RS. 50 BILLION

KSE AND SECP DECIDED TO MAKE A KSE SUPPORT FUND OF RS. 50 BILLION TO GIVE OPPORTUNITY TO SMALL INVESTORS TO QUIT FROM THE MARKET AT 17 -07-2008 CLOSING RATES. IN THIS SMALL INVESTORS CAN QUIT, BUT REMEMBER IT IS TIME TO PURCHASE FROM THE MARKET. IT IS NOT GOOD DECISION FOR ANY INVESTOR TO QUIT FROM THE MARKET. HOPE ALL WILL UNDERSTAND.

WORLD BANK EMERGENCY PACKAGE FOR PAKISTAN

2008-07-16T12:09:00.000-07:00

WORLD BANK APPROVES EMERGENCY PACKAGE OF USD 500 MILLION FOR PAKISTAN

FFBL EARNINGS FORECAST

2008-07-16T12:06:00.000-07:00

FFBL EARNINGS FORECAST FOR 2ND QTR 2008 IS IN THE RANGE OF EPS RS. 0.52 TO 0.58. GROWTH IS EXPECTED 22.2% TO 32.6% IN HALF YEAR 2008. CASH DIVIDEND OF RS. 0.50 PER SHARE IN HALF YEAR IS EXPECTED.

KSE AT ATTRACTIVE LEVELS "PPL AND OGDCL TO BUY"

2008-07-15T13:06:00.000-07:00

KSE AT ATTRACTIVE LEVELS

AT THE MOMENT BUYING IN CEMENT AND OIL EXPLORATION LIKE PPL AND OGDCL IS SUGGESTED.

AUTO SECTOR OUTLOOK

2008-07-15T13:04:00.000-07:00

AUTO SECTOR OUTLOOK

IT IS EXPECTED DECLINING TREND OF AOTU WILL CONTINUE. HENCE SELLING IS SUGGESTED LIKE BANKS I SUUGESTED IN BEGINNING OF THE YEAR

AUTO SALES DECLINING TREND

2008-07-15T13:00:00.000-07:00

AUTO SALES DECLINE BY 4.2%

PAK SUZUKI SALES DECLINE BY 6.7%

INDUS MOTORS SALES DECLINE BY 5.6%

HONDA SALES DECLINE BY 22.7%

DEWAN FAROOQ SALES DECLINE BY 35.8%

It is Time to BUY SHARES AT KSE

2008-07-09T06:14:00.000-07:00

It is Time to BUY SHARES AT KSE.

After a long period of Downfall, It is time to BUY SHARES at KSE.

Tips are for HUBCO, PPL, POL abd OGDC

"Buy Shares" in KSE "Stock market" "Pakistan"

2008-07-09T06:11:00.000-07:00

Buy as u can HUBCO, PPL, OGDC and POL

"TRADE POLICY 2008-09"

2008-07-04T01:12:00.000-07:00

IT IS EXPECTED IN TRADE POLICY 2008-9 THAT TO ALOW OVERSEAS PAKISTANIES TO IMPORT 7 YEARS OLD AND USED CARS IN "TRADE POLICY 2008-209".

CRUDE OIL FORECAST AT USD 250

2008-07-04T01:10:00.000-07:00

RUSSIAN ENEGY GIANT GAZPROM FORECAST THA THE PRICE OF OIL WILL RISE TO 250 DOLLARS PER BARREL

CEMENT EXPORTS RISE BY 142%

2008-07-04T01:02:00.000-07:00

CEMENT EXPORTS RISE BY 142% AS 7.72 MN MT IN YEAR 2008 AS COMPARED TP 3.19 MN MT IN YEAR 2007. IT IS ALSO EXPECTED WILL CONTINUE DUE TO THE UPCOMING WORLDCUP IN SOUTH AFRICA.

LOCAL DAMAND SHOWED 6 % GROWTH.

THIS WAS DUE TO PKISTAN INTERNAL POLITICAL AND ECONOMIC CONDITIONS AND IT MAY GO DOWN DUE TO RISE IN CEMENT PRICES

INCREASE IN UREA PRICES

2008-07-04T00:57:00.000-07:00

UREA PRICES INCREASED IN PAKISTAN BY RS. 70 PER 50 KG BAG.

DUE TO THE FOLLOWINGS:

1) PASSING THROUGH HIGH INPUT COST
2) SAFEGUARD THE SQUEEZING MARGINS
3) SHORTAGE IN LOCAL MARKET
4) HIGH DEMAND
5) DEMAND IS 4.5 TO 5 MN MT WHEREAS PRODUCTION IS 4 MN MT.

STOCK MARKET SENTIMENTS KSE

2008-07-03T23:50:00.000-07:00

IT IS OVSERVED IN THIS CURRENT UNSTABLE POLITICAL AND POOR ECONOMIC SITUATION OF PAKISTAN, INVESTORS CONFIDENSE IS TOTALLY SHATTERED AND NO ONE READY TO THINK ABOUT THE SITUATION OF STOCK MARKET. HOWEVER REMEMBER WHEN ANY ONE PICKS SCRIPTS OF VALUEABLE AT SUCH SITUATION, HE ALWAYS REMAIN IN BENEFIT. HOPE SOME ONE WILL REALIZE AND PICK THE SCRIPTS LIKE ENERGY AND CEMENT SCRIPTS

KSE LATEST TREND

2008-07-03T00:35:00.000-07:00

AS EVERY ONE WITNESSED THAT KSE TREND IS NEAGTIVE AND IF SOME ONE LIKE TO EXIT. IT IS NOT POSSIBLE FOR HIM. I THINK KSE MANAGEMENT AND SECP WILL SOON MEET AND SORT OUT THE PROBLEM OF LOWER CIRCUIT BREAKERS.

HOPE FOR BETTER TOMOROOW

FAIR VALUE OF SSGC RS. 14

2008-07-03T00:32:00.000-07:00

SSGC FAIR VALUE DOWNGRADED TO RS. 14 AS PER KASB SOURCES.

"FAIR VALUE OF MAPLE LEAF CEMENT - MLCF RS. 16"

2008-06-30T23:30:00.000-07:00

We recommend buy of MLCF as its fair value is Rs. 16 on the basis of the followings:

1) Local Demand expected to grow 30% YOY Basis
2) Infrastructure Development programs
3) Housing and Dams Constructions
4) Export to Middle East, India and South Africa
5) Rs. 320/Bag rate in Local Market and also increasing due to inrease in production cost as Fuel, Coal and Power is of 65% of Production Cost of Cement.

If you have any query please email me at stockmarketpk@gmail.com or leave comments here.

Muhammad Ijaz

“Fair Value of Shares”

2008-06-30T09:19:00.001-07:00

“Fair Value of Shares”

In current Pakistan Economy and Political position, “Fair Value of Shares” is suggested as under:

“Fair Value of PSO” is Rs 535
“Fair Value of OGDCL” is Rs 138
“Fair Value of POL” is Rs 440
“Fair Value of PPL” is Rs 287
“Fair Value of HBL” is Rs 195
“Fair Value of MCB” is Rs 273
“Fair Value of UBL” is Rs 120
“Fair Value of NRL” is Rs 355
“Fair Value of INDUS” is Rs 232
“Fair Value of SUZUKI” is Rs 172
“Fair Value of FFC” is Rs 126
“Fair Value of FFBL” is Rs 45
“Fair Value of PTCL” is Rs. 44
“Fair Value of LUCKY” is Rs 136

Remember if Economical and Political position improved, then we will update the “Fair Value of Shares” as downward or upward as appropriate.

If you need any kind of suggestion please email me on stockmarketpk@gmail.com or leave comments on my WEB.
Muhammad Ijaz

“Petroleum Consumption in Pakistan”

2008-06-30T09:17:00.002-07:00

“Petroleum Data- 11 Months”

Petroleum consumption for 11 months increased by 6.9% to 17.65m tons as compared to 16.51m tons in the corresponding period of last year mainly due to increasing demand for power, industrial consumption and transport sector.

Major increase was in the consumption of HSD and Gasoline, which increased 14.2% and 29.3% respectively.

“Pakistan State Oil” – “PSO” Shares Increased in Consumption

Pakistan State Oil – PSO is with biggest market capitalization with 67.9% of the total market share during 11 months as compared to 64.7% in the same period of last year. Total sales volume of petroleum products is at 11.98m tons as compared to 10.68m tons in the corresponding period of last year.

“Shell Pakistan Limited” - “Shell” Shares Almost Same in Consumption

Shell Pakistan Limited – Shell growth of 7.2% in its petroleum products, which stood at 2.40m tons during the period, as against 2.24m Overall market share of the company was remained almost same and stood at 13.6% during the period under review. Major improvement was brought about by rise in sales of Furnace Oil and Gasoline.

“Attock Petroleum Limited” – “APL” Shares decline in Consumption

Attock Petroleum Limited - APL depicted a decline of 0.8% in its total POL sales, which stood at 1.13m tons in 11mths’08 as compared to 1.14m in the same period last year. The total market share of APL fell to 6.4% during the said period as compared to 6.9% in the corresponding period of last year due to fall in sales of furnace oil, sales of which fell by12.2% to 0.47m tons from 0.53m tons.

“Increase in Cement price Expected”

2008-06-30T09:17:00.001-07:00

“Increase in Cement price Expected”

Manufacturers are planning to increase the cement prices by Rs20-30 from next week in the wake of high tax burden. The further rise by Rs20-30 per 50-kg bag is being expected in the cement price from next month, after which cement will be available at Rs340-350 per 50-kg bag.

Increase in “Electricity prices” due to budgetary support

2008-06-30T09:15:00.000-07:00

Increase in “Electricity prices” due to budgetary support

Electricity prices will cross Rs10 per unit for all categories except those small consumers using up to 50 units per month. The increase in prices is part of the conditions attached to $500 million World Bank program lending support the bank has extended to Pakistan for budgetary support

Maybank and MCB Bank shares

2008-06-30T05:32:00.003-07:00

Maybank and MCB Bank shares

Maybank of Malaysia has finally acquired 15% MCB Bank shares and remitted a total of S$667m to Pakistan. The confirmation of acquisition of 15% MCB shares was sent to KSE. The deal was finalized on May 5. According to SBP, the deal amount worth US$667m was remitted to
Pakistan on June 23.

Privatization of PIA and PSO

2008-06-30T05:32:00.001-07:00

Privatization of PIA and PSO dropped from sell-off plan:

The Privatization Commission has dropped PIA and PSO, two short-listed entities, from its
sell-off program and got approved from its board the entities to be offered to the investorsin 2008-09.

KSE LATEST NEWS - KSE POSITION

2008-06-30T04:15:00.000-07:00

AS I HAVE MENTIONED ON THAT DAY WHEN MARKET WAS ONE TIME HIGHEST IN THE HISTORY, TODAY IS GOODTIME FOR WEAKHOLDERS. IF ANY ONE AGREE AND QUIT THEN HE MUST BE HAPPY AS THERE IS NO ROOM TO QUIT FROM THE MARKET UNLESS WAITING FOR A GOOD NEWS.

MUHAMMAD IJAZ

Budget Impact on Auto Sector

2008-06-25T22:45:00.001-07:00

Budget Impact on Auto Sector

FOLLWINGS ARE IMPORTANT MEASURES FOR AUTO SECTOR

A) Federal Excise duty of 5% has been imposed on import as well as locally manufactured
cars with engine capacity above 850cc.

Imposition of 5% FED will increase product price, which will further dampen already dwindling auto demand.

B) Duty rate on import of cars/jeeps above 1800cc has been increased to 100% from
90% earlier.

Auto manufacturers like Indus Motors will loose margins on their imported products because most of which are above 1800cc.

C) Fixed import duty on old and used cars and jeeps has been increased by 10%.

This would protect the local industry through expected increase in the cost of used imported vehicles, thus providing cost advantage to local assemblers.

D) A withholding tax (WHT) of 2.5% on purchase of locally manufactured motor car or A member company of group will increase the car prices, which are already on the high side.

E) Rate of General Sales Tax (GST) on car purchase has been proposed to increase from 15% to 16%.

It will further increase the car prices, which will likely to have a dampen impact on cars sales volume.

Budget Impact on Cement Sector

2008-06-25T22:42:00.002-07:00

Budget Impact on Cement Sector

Following are important measures for Cement Sector

1) The government has allocated Rs550b for the PSDP in the 2008-09 budget as
compared to revised allocation of Rs450b in 2007-08, showing an increase of 15.6%. Under the sectoral distribution of the PSDP, an amount of Rs165b has been made for infrastructure, Rs188b for social sector and Rs18b for agriculture and Industry. It will have a positive impact of cement sector because it shows the government’s focus toward infrastructure development, which will support the local sales growth.

2) Central Excise duty on cement has been enhanced to Rs900 per ton from current Rs750 per ton. It will increase the CED on each bag by Rs7.50 per bag to Rs45.0 per bag from existing Rs37.5 per bag. In our opinion, cement manufacturers will easily pass on this to the consumer by increasing cement price per bag in the range of Rs10-15.

3) The government has increased the GST by 1% to 16% from earlier 15%. It will have a negative impact on the sector it will further increase the cement prices, which may hit its demand. It will also erode the positive effects of the recent price hike in the local market.

Pakistan Oilfields Limited (POL) Production

2008-06-25T22:42:00.001-07:00

Pakistan Oilfields Limited (POL) Production

POL showed decline in both oil and gas production. Oil production showed doubledigit decline of 12.5% to 5,287bpd in 10mths’08 as against 6,039bpd in 10mths’07. Beside Pindori field, which showed continued problems from last six month and oil production from the field declined 40.9% during the period under review, Uchri and Pariwali fields also showed a negative growth of 14.2% and 0.8% respectively. These three fields contributed 65.5% of the total oil production of the company. Gas production stood at 45mmcfd in the said period as compared to 47mmcfd in the parallel period of last year, showing a fall of 4.0%.

Pakistan Petroleum Limited (PPL) Production

2008-06-25T22:41:00.001-07:00

Pakistan Petroleum Limited (PPL) Production

PPL continued to depict handsome rise in crude production on the back of additional production from Mela 1. During the period under review, crude oil production by the company stood at 4,059bpd in 10mths’08 as against 2,661bpd in the same period last year. In addition to Mela field, production from Tal block also showed an impressive growth of 42.2% during the period under review and contributed 17.0% of total oil production of the company. Gas production remained almost same and stood at 991mmcfd during the period under review as compared to 992mmcfd in 10mths’07. Despite 2.8% decline from Sui gas field, which has a significant weightage of 64.2% in PPL’s total gas production, increased production from Kandhkot and Sawan fields supports the company to maintain its gas production.

Oil & Gas Development Company Ltd (OGDC) Production

2008-06-25T22:40:00.001-07:00

Oil & Gas Development Company Ltd (OGDC) Production
OGDC showed 5.5% increase in crude oil production and stood at 43,453bpd during 10mths’08 as against 41,170bpd in 10mths’07 mainly due to rise in production from Kunnar, Chanda, Bobi and Mela fields. Gas production also showed an increase of 3.7% to 1,008mmcfd in 10mths’08 as compared to 972mmcfd in 10mths’07 on the back of increased production from Qadirpur and Uch fields, which contributed 58.8% of the total gas production of the company.

Hubco plant:

2008-06-25T22:39:00.002-07:00

Hubco plant:

The tariff structure for Hubco’s 225MW power plant has been agreed with the Nepra. The statement said that Hubco had received the government’s formal approval for setting up the combined cycle power plant at Narowal with an investment of US$300m. It said the plant,
which would be based on Reciprocating Engines Technology having an ISO-installed
capacity of 225MW, would start supplying electricity to the National Grid from March
2010.

MEEZAN BANK STAKE

2008-06-25T22:39:00.001-07:00

MEEZAN BANK STAKE

Kuwaiti firm to hike stake in Meezan Bank: Kuwait’s Noor Financial Investment Co
plans to raise its stake in Pakistani Islamic lender Meezan Bank to 42% from 35% with
an investment of approx. US$20m, its managing director said.

Economic Survey of Pakistan 2007-2008

2008-06-25T22:37:00.000-07:00

Economic Survey of Pakistan 2007-2008

The government has recently issued the Economic Survey 2007-2008. The salient features of the report are as follows;

GDP and per capita income
Real GDP grew at 5.8% in 2007-08 as against 6.8% compared from the last year against the target of 7.2% growth. Pakistan’s economy has grown at an average rate of almost 6.6% per annum during the last five years (FY’04-FY08). Per capita income in dollar term has grown at a compound average growth rate of 10.8% over the period of six years to US$1,085 in 2007-08 from US$586 in 2002-03.

Agriculture
Agriculture is still the single largest sector of the national economy but has shown a dismal performance this year. Overall agriculture growth this year is estimated at just 1.5% in 2007-08 from 3.7% of last year. Except sugarcane production, which grew by 16.8% during 2007-08, the other major crops were showing decline. Rice production has shown an increase of just 2.3% in 2007-08.
Wheat production was declined by 6.6% to 21.7m tons in 2007-08 as compared to 23.3m tons last year. Cotton production at 11.7m bales in 2007-08 also declined 9.3% during the year. As far as pulses are concerned, the minor crop, exhibited an impressive growth during 2007-08. A member company of group

Large Scale Manufacturing
Manufacturing is the second largest sector of the economy. Overall manufacturing grew by 5.4% this year as against the target of 10.9%. Large-scale manufacturing (LSM), accounting for nearly 70% of overall manufacturing, grew by 4.8% against the target of 12.5%.

Money and Credit
During Jul-May10 FY08, money supply (M2) grew by 9.0% against the annual target of 13.7% last year’s expansion of 14% for the same period last year. Net domestic assets increased to Rs656.7b as compared to the increase of Rs395.5b in the same period last year. Net foreign assets recorded a decline of Rs289b against the increase of Rs84.6b in the same period last year.

Inflation
The CPI-based inflation stood at 10.3% in 10mths’08 — significantly higher than 7.9% recorded in the corresponding period of last fiscal year — remained above the target of 6.5%for the year. Food inflation is estimated 15% over 10mths of FY08 as against 10.2% of last year.

Fiscal Development
The overall fiscal deficit was targeted at Rs398b or 4.0% of GDP for FY08 but this percentage could cross 6.5% of GDP. Government borrowing for budgetarysupport grew phenomenally by Rs362b during 2007-08 as compared to Rs263.4b in the last year. Therefore, M2 growth is expected to go beyond the target of 13.7%. Credit to private sector amounted to Rs369.8b during Jul-May10, FY08 as compared to Rs263.4b in the same period last year.

Balance of Payment
Pakistan’s current account deficit (CAD) further widen to US$11.6b (6.8% of GDP) in 9mths’08 from US$6.6b (4.6% of GDP) in the same period last year. Much of deterioration has taken place due to the rising trade deficit and the outflows from services.

Workers Remittances
Worker remittances totaled US$5.31bb in 10mths’08 as against Rs4.45b in A member company of group
the same period last year, depicting a growth of 19.5%. Major portion came from USA 27.5%, Saudi Arabia 18.8% and UAE17.1%. If this trend continues worker remittances are likely to touch US$5.8b for the year, the highest so far in country’s history.

Investments
Total investment as a percentage of GDP could not sustain the record height of 23% in FY07 and declined to 21.6% in 2007-08. During FY07 the fixed investment was 21.3% which has declined to 20.0% in 2007-08. The overall foreign investment during the 10mths’08 declined by 32.2% and
reached at US$3.6b against US$5.3b in the same period last year. Foreign direct investment (FDI) reached at US$3.48b as compared to US$4.18b in the comparable period of last year, depicting a decline of 16.7%
.
Trade balanceThe merchandise trade deficit widened to US$17b in 10mths’08 as against US$11b in the same period last year. However, as a percentage of GDP, trade deficit is likely to be 12.3% in FY

FFBL AND ENGRO WILL BE GREATER BENEFICIARY BY BUDGET MEASURES

2008-06-25T22:36:00.000-07:00

FFBL AND ENGRO WILL BE GREATER BENEFICIARY BY BUDGET MEASURES

Budget 2008-09 Impact on fertilizer sector

Important budgetary measures for the fertilizer sector in Budget 2008-09 are as follows:

1) Govt has decided to increase the subsidy on DAP fertilizer by Rs530 per bag or 112.8% to Rs1,000 per bag from the existing Rs470 per bag in view of steep increase in its international prices. Subsidy on other fertilizers will also continue.

A) FFBL, being the sole producer of DAP; will be the main beneficiary as increased raw material cost would be mitigated by the increased subsidy, which will help the company to maintain its margin.

B) ENGRO (DAP) Importer is also likely to have a positive impact on its bottom line in the shape of inventory gains.

2) The government has also increased the total allocation for fertilizer subsidy by Rs10b or 40% to Rs35b for the next fiscal year from Rs25b allocated for the outgoing fiscal year. It is expected to have a positive impact on the sector because these subsidies will pass on to the farmers in the shape of cheap fertilizer, which will further improve the fertilizer offtakes figures.

3) The government will provide additional Rs30b credit to agricultural sector in addition to total credit to agricultural sector amounting to Rs130b disbursed this year. An increase in agricultural credit target will benefit the farmers in terms of more liquidity and will likely to have a positive impact on the fertilizer sector.

4) General Sales Tax (GST) on imported and local supply of fertilizer and pesticides
has been reduced to 0% from existing 15%. It will have a positive impact on the sector as it is likely to act as another trigger for fertilizer sales because now farmers can get fertilizer and pesticide at cheaper rates. Exemption of sales tax will reduce the urea and DAP prices by Rs49.95 per bag and Rs34.5 per bag respectively.

5) The government has also proposed to waive the levy of 5.0% FED on premium
of crop insurance policy. This step is also to encourage crop insurance in the country.

6)The GoP has increased the wheat support price to Rs625 per maund from earlier Rs510 per maund. In Budget 2008-09, government has mentioned that further upward revision of wheat support price is also expected for the next year’s wheat crop in Aug-Sep keeping in view the higher input cost and escalating international prices. It will improve the farmer’s purchasing power, hence potentially boosting fertilizer offtake.