Wednesday, 24 October, 2012

KARACHI

STAFF REPORT

Following the general performance of thebanking sector in current environment,the National Bank of Pakistan is expectedto show a growth of 16%YoY in its bottomline by reporting after tax profit ofRs13.3bn for 9MCY12 against a profitafter tax of Rs11.4bn in 9MCY11.

This translates into EPS of Rs7.17.“This significant increase in earnings

is due to higher non-interest income thatis anticipated to grow by 33%YoY alongwith decline in provisioning of 17%,” saidthe analysts at InvestCap Research.

The non-interest expense is expectedto rise by 13%YoY. However, Net interest

income (NII) of the bank is expected todecline by 4%YoY from Rs33bn in9MCY11 to Rs32bn in 9MCY12.

Fee, commission, brokerage incomeand dividend income are expected to re-main major supporter for the bottomlineof the bank and are foresee to grow by6%YoY and 135%YoY respectively. On se-quential basis, NBP is expected to postafter tax profit of Rs5.07bn (EPS: Rs2.74)for 3QCY12 as against the PAT of Rs3.3bnreported during the same period of lastyear, translating into a growth of53%YoY. Currently NBP trades at CY12PBV and P/E of 0.61x and 4.32x respec-tively and we recommended ‘Buy’ stancewith Dec-12 target price of Rs65/shares.

Nishat Mills Limited (NML) is sched-

uled to announce its first quarter fiscalyear 2013 results on Thursday, 25th Oct-12. NML is expected to post PAT ofRs1.1bn (EPS Rs3.06) in 1QFY13 as com-pared to Rs1.0bn (EPS Rs2.93) in1QFY12, posting a modest growth of4.5%YoY in the bottomline. The increasein bottomline is expected on the back ofimproving gross margins as low cottonprices on local front are expected to im-prove margins of different value addedproducts during 1QFY13. We expect grossmargins to clock in at 17% in 1QFY13 asagainst 10.7% in same period last year.Likewise, 8.9%YoY depreciation in PKRagainst USD is likely to help the companyin improving its export sales’ margins.Furthermore, dividend income from MCB

and PakGen power is anticipated to addsignificant amount to the other incomehead coupled with low financial chargesdue to decline in working capital require-ments. With Dec-12 TP of Rs65/share onSOTP basis, we recommend ‘Hold’ onNML. The company is currently tradingat PE ratio of 6.4x with dividend yield of6.3% on FY13 earning expectations.

Lucky Cement Company (LUCK) isscheduled to announce its quarterly ac-counts for the first quarter of fiscal year2013 onThursday, October 25, 2012. Weexpect the company to post profit aftertax (PAT) of Rs2,201mn (bottomline upby massive 46%YoY), translating intoEPS of Rs6.81. The phenomenal rise wit-

nessed in the bottomline of the companyis to be primarily supported by handsome7%YoY escalation in the retention price ofthe commodity coupled with expectationof attractive 13%YoY volumetric growthin the company’s dispatches. Positivity isseen to be further supported by 28%YoYdip in the global coal prices that in effectare foreseen to have enhanced gross mar-gins of the company. The gross marginsduring the period under review are ex-pected to be bolstered by 2pps in compar-ison against the corresponding periodprevious year.

We have ‘Buy’ recommendation onLUCK, as currently the share is offeringpotential upside of colossal ~28% againstour per share target price of Rs179.

NBP likely to report Rs 13.3b profit after taxg NML to register PAT to Rs 1.1b (EPS Rs3.06) in 1QFY13 g LUCK to post bottomline growth of phenomenal 46%YoY

ISLAMABAD

ONLINE

THE All Pakistan CNG As-sociation (APCNGA) onTuesday said price ofCompressed Natural Gas(CNG) in Pakistan is high-

est in the region therefore it mustbrought down in line with other coun-tries in the national interest. Decisionsaffecting CNG sector are not taken onmerit but on the whims of powerful oillobby which wants to boost its business,said Ghyas Abdullah Paracha, Chair-man, Supreme Council of APCNGA.

Speaking at a hurriedly-calledmeeting here, he said that CNG sectorneeds immediate attention of authori-ties as billions have been invested in it,3.5 million cars have been convertedwhile millions are directly and indi-rectly employed in this sector. Prices ofCNG in Pakistan should match other

countries wherebuying power ofthe masses is moreor less the same, itsaid.

He said thatgas is an indige-nous resourcewhich economicaland clean as com-pare to importedfuels which arecostly and un-friendly to envi-ronment. GhyasAbdullah Parachainformed that price of CNG in Thailandin 76.70 per cent less as compare toprice of petrol. Similarly, inBangladesh, CNG is available at 68.61per cent lesser price, Indonesia 51.65per cent and in India it is 58.84 percent of the cost of petrol.

Many countries including India and

Bangladesh don’thave any indige-nous substitute forgasoline; they lackproper gas infra-structure but theysell CNG at lowprice as compareto Pakistan despiteimporting Lique-fied Natural Gas(LNG) and payingfor conversion toenable it for use invehicles.

As a policy, USand many EU countries have been pro-moting use of gas to reduce dependenceon imported fossil fuels due to uncer-tainty in supply chain, volatility inprices, and save foreign exchange, hesaid adding that many countries aredoing away with expensive LPG buthere CNG sector is being closed to

boost import of costly fuel.Total consumption of CNG sector is

Pakistan not more than 8 per cent, it ispaying more taxes as compare to anyother sector using gas, yet it is beingvictimized while some other influentialsectors are promoted despite the factthat immediate conversion of those sec-tors on other fuels in the national inter-est, Paracha observed.

He informed that before 2002,there was a ban on running thermalpower plants on CNG. It was Musharrafera when country started runningpower stations on clean fuel despitescarcity. This decision resulted in de-pletion of precious gas reserves whichtook toll on masses and economy, de-prived industry of economical fuel, andcontributed to rapid environmentaldegradation, he added.

Government can consider reversingthat decision, demanded GhyasParacha.

‘CNG price in Pakistanhighest in region’

ISLAMABAD

APP

Food imports decreased by 6.35 percentduring the first quarter of the currentfiscal year as compared to the corre-sponding period of last year.

The over all imports of food groupwere recorded at US$1.179 billion dur-ing July-September (2012-13) againstthe imports of US$1.259 billion in July-September (2011-12), according to thedata of Pakistan Bureau of Statistics(PBS). The products that witnessed de-crease in trade included sugar, importsof which fell from US$6.671 million lastyear to US$1.641 million.

Similarly, the imports of spices andtea decreased by 26.30 percent and19.47 percent respectively, the PBS datarevealed. The imports of spices wererecorded at US$19.118 million againstthe imports of US$25.939 million whilethe imports of tea were recorded atUS$68.549 million against the importsof US$85.119 million.

Imports of dry fruits and nuts de-creased from US$21.068 million lastyear to US$1.938 million, showing neg-

ative growth of 2.60 percent.Palm oil imports also decreased by

10.34 percent during the period underreview by going down fromUS$653.603 million to US$586.021million while the imports of all otherfood products witnessed negativegrowth of by 3.28 percent by decliningfrom US$289.933 million toUS$280.424 million.

The food products that witnessedpositive growth in trade included milk,cream and milk food for infants, im-ports of which increased by 9.87 per-cent by going up from US$ 40.315million to US$44.293 million.

Imports of soyabean oil increased

from US$26.457 million to US$37.208million, showing growth of 40.64 per-cent.

Imports of pulses (leguminous veg-etables) increased by 10.33 percent bygoing up from US$110.401 million lastyear to US$121.806 million.

It is pertinent to mention here thatthe overall exports from the countrywitnessed positive growth of 4.26 per-cent while the imports decreased by2.37 percent during the first quarter ofthe current fiscal year, indicating a pos-itive trends in the overall trade volumeof the country.

Exports from the country duringJuly-September (2012-13) wererecorded at US$6.187 billion against theexports of US$5.934 billion during thesame period of last year. On the otherhand, the imports into the country de-creased from US$11.117 billion last yearto US$10.853 billion during the currentfiscal year, the data revealed.

Based on these figures, the overalltrade deficit has been recorded at 9.9percent as it shrunk reduced from thedeficit of US$5.183 billion last year toUS$4.666 this year.

Food imports shrink 6.35 % in first quarter

Let’s follow Europe

Mango exporters asked to

follow regulations of

European countries

MULTAN

APP

The mango exporters will have to followregulations to boost mango export in Eu-ropean market so that maximum foreignexchange could be earn. Addressing aseminar titled ‘Export of Mango to FrenchMarket’ here on Tuesday, Mango GrowersAssociation, Multan president, Major(Retd) Tariq said that only disease-freemango should be sent to the French mar-ket or other European countries by takingspecial care of the rules and regulations oftheirs. Agriculture experts from Faisal-abad and Multan informed the progressivemango growers that Pakistan was the fifthlargest mango producer in the world andits mango export earning was far belowthan its potential due to the issues in-volved in the post-harvest handling of thefruit. A kilogram of mango can fetch Rs350 from French market if all require-ments of the importing country are met,they added. Multan Chamber of Com-merce and Industry (MCCI) presidentMuhammad Khan Saddozai said thatmango exporters must avail the advisoryservices of MCCI to enhance exports.

Another 5 billionplease?PSM wants government

to release Rs 5 billion more

of bailout package

KARACHI

STAFF REPORT

Chief Executive Officer of Pakistan SteelMills (PSM) Major General (R) MuhammadJaved has called upon the federal govern-ment to release another Rs 5 billion of thebailout package so the consistency in PSM’sproduction could be maintained.The request was made by the CEO PSM

while addressing a function at the office ofPakistan Steel People’s Workers Union(CBA) for the announcement of Charter ofDemand of the workers for the year 2010-12.He said the production capacity of the Millswould be increased after the arrival of rawmaterial till mid November and would reachup to 45pc in January 2013.He said the first installment of bailout pack-age, Pakistan Steel opened three LCs of rawmaterial two coal ships and one iron ore shipwhich would be utilized to boost the produc-tion up to 45pc, and next shipments wouldbe purchased soon after the second install-ment of bailout package.He said the PSM management would requestthe federal government to release another Rs5 billion so that the consistency in produc-tion could be maintained.He expressed satisfaction that the Millsplants were in good condition. The CEO an-nounced that the Mills would be able torepay to the government after two yearswhen its production capacity would be en-hanced to 1.5 million tones per year.He warned that the misuse of PSM resourcesshould be stopped as the Mills cannot affordany further embezzlement or waste of re-sources when it was already in crisis.Jawed assured the workers that he would notfire any single person from the PSM sayingthere must be accountability at every level.“We should start accountability from ourown,” he remarked.The chief executive pledged that the PSMwould be revived and made profitable withinnext 12 to 18 months as per approved busi-ness plan and its expansion would also bemade soon.

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ICI PakIstan

02

Wednesday, 24 October, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERD.G.K.CementXD 51.22 52.45 51.31 51.77 0.55 7,173,000Jah.Sidd. Co. 14.93 14.99 14.41 14.49 -0.44 6,002,500Pace (Pak) Ltd. 3.27 3.56 3.27 3.52 0.25 5,453,500P.T.C.L.A 19.14 19.46 19.00 19.20 0.06 4,519,500Lucky CementXD 140.18 144.49 138.55 139.33 -0.85 3,935,500

Major LosersColgate Palmolive 1370.00 1370.00 1320.00 1349.55 -20.45 3,500National FoodsXD 359.86 364.00 341.87 341.87 -17.99 28,800Shezan Inter.XDXB 466.91 450.00 450.00 450.00 -16.91 400Wyeth Pak Limited 890.00 880.00 880.00 880.00 -10.00 50Tri-Pack Films 197.35 199.75 187.49 187.49 -9.86 14,800

Volume Leaders

D.G.K.CementXD 51.22 52.45 51.31 51.77 0.55 7,173,000Jah.Sidd. Co. 14.93 14.99 14.41 14.49 -0.44 6,002,500Pace (Pak) Ltd. 3.27 3.56 3.27 3.52 0.25 5,453,500P.T.C.L.A 19.14 19.46 19.00 19.20 0.06 4,519,500Lucky CementXD 140.18 144.49 138.55 139.33 -0.85 3,935,500

Interbank RatesUS Dollar 95.4904UK Pound 152.8896Japanese Yen 1.1956Euro 124.4908

Dollar EastBUY SELL

US Dollar 95.20 95.60Euro 122.00 123.72Great Britain Pound 150.10 152.18Japanese Yen 1.1739 1.1901Canadian Dollar 94.57 96.39Hong Kong Dollar 12.03 12.25UAE Dirham 25.67 26.00Saudi Riyal 25.07 25.36Australian Dollar 96.26 99.05

Business

HEC, IBA jointly host Harvard

University in E-Seminar

KARACHI: An informative and well organized E-Seminar took place here at the Institute of BusinessAdministration (IBA), Karachi by Harvard University.This event was part of Social Enterprise Seminar Se-ries organized by South Asia Initiative at HarvardUniversity in collaboration with Aman Foundation.The title was “Spurring Entrepreneurship: A Case forInclusive Innovation in Emerging Markets—LessonsFor Pakistan from China and India”The seminar featured Dr. Tarun Khanna live fromHarvard University in Cambridge, MassachusettsUSA. Dr. Khanna is a professor at the Harvard Busi-ness School, Director of South Asia Initiative and Fac-ulty Chair for Harvard Business School activities inIndia. He is also the author of the book, “Billions ofEntrepreneurs: How China and India are ReshapingTheir Futures and Yours”. The event was attended byfaculty and students of 20 universities including IBA,KSBL, Sukkar IBA, COMSATS and others across Pak-istan through video conferencing. The seminar wasmoderated by Dr. Shahid Qureshi, Associate Directorfor the Center for Entrepreneurial Development atIBA, with technical facilities provided by Higher Edu-cation Commission in Pakistan.

KARACHI:The President Pakistan Srl Lanka Business Forum,

Mr.Tarek M.Khan, hosted a dinner in honour of the visiting

Srilankan delegation for 7th Expo Pakistan at a restaurant.

Picture shows, host presenting a shield to leader of the

delegation Mr.Rohitha Thilakaratne, Consul General of Sri

Lanka Mr.D.W.Jinadasa, founder chairman PSBF, Mr.Majyd

Aziz, former Polish Consul General Mr.Ireneuz Makles,

Mrs.Adeela Tarek Khan, also present on the occasion.

NSR out with stunning Eid collection

LAHORE: The dynamic duo of Nousheen and Shab-nam Rana is a new name making waves in the fashionindustry. Formally known as NSR, the label has madea following for themselves with their unique style,cutting edge aesthetics and vibrant color palette. NSRis out with their new EID collection that utilizes dif-ferent tones of the same color, and plays with a familyof beiges, oranges, reds and golds. The cuts are clean,simple and based on a sleek silhouette.The new collection is dominated by bright colors and

a pleasing color palette such as greens, blues andgolds. The fabrics used for this collection are pure vel-vet, jamawar, chiffon, plushy, grip and satin, and thedesigner has used “rich fabrics for an opulent andgrand feel.”

Chef Gulzar’s first cook

book launched

KARACHI: The book launching ceremony for chefGulzar Hussain’s first cookbook ‘Live @ 9 with chefGulzar’ was held here at Sheraton Hotel. The launchwas well-attended with a large number of prominentjournalists and dignitaries present. The event washosted by seasoned journalist Shanaz Ramzi, GeneralManager Public Relations and Publications at HUMNetwork. She introduced the book to the attendees,followed by a presentation on ‘Live @ 9 with chefGulzar’. The chef himself took the stage after the pres-entation. He thanked President HUM Network, Sul-tana Siddiqui and CEO, Duraid Qureshi for publishinghis work. Gulzar also acknowledged the efforts of theentire editorial team at HUM Network for putting inmonths of hard work in compiling the cookbook thatfeatures recipes in both English and Urdu.

Alibaba.com, PSGI form strategic

partnership to support Pakistani SMEs

KARACHI: Pearl Shine Group International (PSGI),a nationally & internationally recognized diversifiedgroup of companies, recently entered into a strategicpartnership with one of the world’s largest B2B por-tals, Alibaba.com. The platform provides an onlinespace that brings together buyers and sellers to com-municate, collaborate and carry out global trade.More than 650,000 Pakistani SMEs are currentlymembers of Alibaba.com, and the new local partner-ship will help grow and solidify new potential for localsuppliers to enjoy more exposure in the global mar-ket. “Pakistani exporters need a stronger online pres-ence because the world has turned into a globalvillage,” said PSGI CEO, Irfan Haider Awan. “Localbusiness owners should explore and avail the oppor-tunities beyond our national territory by making in-telligent use of e-commerce mechanisms in this newtechnological era. Such steps will not only help Pak-istani SMEs benefit from economies of scale but willalso contribute to better balance of trade.”

Get free calls, SMS and mobile

internet with Warid Sim Jagao Offer

KARACHI: Warid once again brings an amazing‘SIM Jagao Offer’. Those customers who have not usedtheir Warid SIM since 15th September 2012 can reac-tivate their SIM and enjoy 1000 Warid to Warid freeminutes, 1000 SMS on any network and 100 MB Mo-bile Internet without any recharge for a week’s time.Not only this, Warid customers can also enjoy freecalls from Warid to Warid after the first 2 minutes forthe remainder of their call and 100 free SMS after thefirst sent SMS and this again without any recharge. Toavail this spectacular offer Warid users can reactivatetheir SIMs and simply SMS “FREE” to 3733.

Dawlance continues ‘Ehsaas’ journey

KARACHI: Dawlance held a series of cooking com-petitions for the families of its dealers in Punjab. Thefirst competition took place in Islamabad on 12th Oc-tober, the second in Gujrat on 14th October and thethird in Sargodha on 16th October, 2012. The compe-tition titled ‘Microwave Oven Cooking Competition’was Dawlance’s way of thanking the dealers’ commu-nity for the efforts it has put into making Dawlancethe No. 1 home appliances brand in Pakistan and tocelebrate the strong bonding which has been in placesince the company was founded.Praising the efforts of dealers, Mr. Hassan Jamil said,“We, at Dawlance, appreciate the contribution of ourdealers towards achieving sales growth over the yearsand it is only fitting that, in return, we show our grati-tude for their commitment. This competition is just asmall way of letting the dealers know how muchDawlance values them.”

Germany-Pakistan training initiative

KARACHI: For the first time in Pakistan, the GermanConsulate General in Karachi together with eight Ger-man companies and two vocational training institutes -AMANTECH & iACT - launch the Germany-PakistanTraining Initiative (GPATI). The program is foundedon the renowned concept of Dual Training System thatis implemented effectively throughout Germany and isalso successfully applied internationally. GPATI isbeing supported by the German Ministry for EconomicDevelopment and Cooperation (BMZ) throughDeutsche Gesellschaft fuer Internationale Zusamme-narbeit (GIZ). The objective of this unique training ini-tiative is to produce workforce that after going throughthis vocational program is immediately productive andready to take on the challenges of the industry.

ITH, WB collaborate

KARACHI: Leading Pakistani artisan stakeholdershave been invited to dialogue with successful regionalplayers to develop a well-rounded strategy for pro-moting artisan livelihoods in Pakistan. The IndusHeritage Trust (IHT) and the World Bank have beenworking together to bring stakeholders from the re-gion together with Pakistani organizations for a dia-logue that will lead to greater learning andunderstanding of the ‘Creative Industries’. This hasbeen with a view to establishing greater impetus forPakistan’s ‘Creative Industries’ and the artisans whoare struggling to make two ends meet.

Energy efficiency seminar by

Changhong Ruba

KARACHI: A seminar on ‘Energy Efficiency’ is or-ganized with the support of Changhong Ruba. Emi-nent scholars, experienced professionals andgovernment officials from the energy managementsector attended this seminar as panelists and speak-ers. The seminar was very well attended by the cor-porate sector and it further highlights the interest ofthe business segment. This topic of being efficient onenergy resources is of great importance, especiallyreference the current scenarios. It was interesting tonote that speakers while highlighting about the chal-lenges related to today’s energy management laid spe-cial emphasis on the relevant solutions andopportunities associated to all these solutions. It wasfelt that a wave of optimism has been created thruthis initiative.

House of Chenab in Lahore

LAHORE: Chenab Group Limited, whose name issynonymous with high end life style products for thediscerning customers, added a new feather in theircap with the launch of their flagship store HOC(House of Chenab), in Lahore, the other day in an im-pressive ceremony held at the HOC.

CORPORATE CORNER

KARACHI

STAFF REPORT

FOLLOWING Lucky Group alsoknown as Yunus Brothers manage-ment takeover of ICI Pakistan fromAzgoNobel, the acquirers havemade public announcement to pur-

chase shares of ICI Pakistan, said the analysts atTopline Research.

This announcement is in line with the ListedCompanies Ordinance or commonly termed asTakeover Law or Substantial Acquisition Law.The good development for minority sharehold-ers is that this announcement is made ahead ofits schedule providing hope that the tender offerand final payment will also be completed beforethe maximum timeline of 90 days after the pub-lic announcement. Though, we do not cover thisthinly traded stock, but we believe that withemergence of arbitrage-like investment oppor-tunity the stock is likely to catch investors’ in-terest in coming days in line with similar trendseem in other stocks in which tender offer wasissued to minority shareholders.

Takeover Ordinance in Pakistan was issuedin 2002 called Listed Companies (SubstantialAcquisition of Voting Shares and Takeovers) Or-dinance, 2002. According to that all listed com-panies acquiring more than 25% shares has toissue a public announcement of offer mainly toprovide fair and equal treatment to all share-holders. Many amendments have been made inthis rule since its issue in 2002. The acquirerhas to acquire at least 50% of the remainingshare. The public offer price should not be lessthan the acquisition price or higher price arrived

through few other formulas as mentioned in theregulation. In this case the agreement betweenICI Omricron/Agzo Nobel and Lucky Group wassigned on July 27, 2012 and the public an-nouncement was now been made according towhich Lucky Group has shown its interest to buy11.2mn shares which is 50% of float available inthe market at a price of Rs186.42 while the mar-ket price is Rs173.16 lower, 7.1% than the acqui-sition price.

After the public offer, the process of tender-ing the shares will be completed in 60 days orbefore while another 30 days or before theshareholders will receive their payment. In thiscase the minority shareholder who will acceptthe offer will get money back by mid January orearlier. Historically it has been observed that allminority shareholders do not tender and thusthe chance of acceptance is more than 50%. InByco 100% of shares tendered were bought bythe acquirer while in case of Network Micro Fi-nance it was 60%.

Taking into consideration the historicaltrend and the fact that many old shareholders,employees funds and those having physicalshares normally don’t tender, there is highprobability that all 22mn shares may not betendered . In case 77% of shares are acceptedthat is minority shareholders tendering 14mnout of 22 mn, the scenario translate into break-even for the investors assuming the share totrade at close to our fair price of RS120-130. Inalternative scenario, with 100% acceptance ittranslate into a gain of 8% for holding periodof less then 3-months. While 50% acceptancein worst case will result in negative return of10% in the next 3-months.

Bears enter LahoreLSE down by 29.71 points

LAHORE

APP

Bearish trend prevailed in Lahore StockExchange on Tuesday as it shed 29.71points, following the LSE-25 indexopened with 4045.85 and closed at4016.14 points.The market’s overall situation also didnot correspond to an upward trend as itremained at 1.547 million shares to closeagainst previous turnover of 2.849 mil-lion shares, showing a downward moveof 1.301 million shares. While, out of thetotal 104 active scrips 28 moved up, 17shed values and 59 remined equal. Treet Corporation Limited, Attock Refin-ery Limited and Atlas Insurance Limitedwere Major Gainer of the day by record-ing increase in their per share value byRs 2.99, Rs 2.66 and Rs 1.77 respectively.Lucky Cement Limited, Engro FoodsLimited and J.K. Spinning Mills Limitedlost their per share value by Rs 1.02, Re0.54 and Re 0.50 respectively.The volume leader of the day includedNIB Bank Limited with 284,500 shares,Silk Bank Limited (Saudi) with 190,500shares and The Bank of Punjab Limitedwith 164,500 shares.

Lucky’s purchase offer

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