KARACHI, Nov 27: International fund managers are eyeing markets in Taiwan, Indonesia and India. That is a good omen, suggests a local manager of a private stock market funds. "If that is the case, Pakistan cannot be far behind," he says.

The recent positive events on the political front; the growth in Pakistan's foreign exchange reserves during the previous week by $82 million to $12.083 billion; and particularly Standard and Poor's credit rating agency's announcement that it was raising Pakistan's credit rating on foreign currency debt by one notch up to B+ and BB for local currency loans, could be the boosters the market was looking forward to.

Cement and energy stocks are still the apple of investors' eye, but equity investors are looking around for yet untapped sectors or those that had until now received scant interest of the general investing public: fertilizer; sugar and even textiles.

On the last two sessions of the past week, the sugar sector attracted relatively good volumes and a couple of sugar companies' stocks closed at the upper circuit breaker of 7.5 per cent. "This was one of the relatively ignored sectors of late and has finally started showing its true potential," observed analysts at Elixir Securities.

Dealers said the sugar sector might be far from exhibiting the type of phenomenal volumes of share trading, such as seen in the cement sector, yet small investors may be tempted to look closely at the sugar shares and possibly pick up some to sweeten their portfolios. The textile sector then may be next in line to draw investors' attention given the possibilities of the post-WTO regime.

Mohsin Ahsan, analyst at Global Securities, observed in relation to the fertilizer sector that the urea offtake growth was likely to flatten out during the 4QCY04 on year-on-year basis. However, low inventories at the start of the quarter would require 150-170-ktons imports to meet demand and supply gap even if companies operate at 100 per cent capacity utilization level.

Although companies' urea sales in 4Q were expected to be lower than the last year (400-ktons lower beginning inventory), nine per cent higher product prices were forecast to improve profit margins with little impact felt on gross profitability level. Other income would be a major contributor to earnings growth for both Engro and Fauji. In case of Fauji Fertilizer, FFC-Bin Qasim's first-ever dividend of Re1 per share pushed up other incomes by Rs475m during nine months to Sept 2004. Engro has also benefited from higher dividend income from its associated companies.

But the latest figures released by National Fertilizer Development Corporation (NFDC) noted the total off-take of urea during October 2004 had witnessed a decline of 6.43 per cent to 223-ktons as against 238-ktons during the corresponding period last year. This decline in off-take can be attributed to pre-stocking by the dealers during the month of September where the sector recorded a growth of 43.79 per cent in urea off-take.

Meanwhile, there was no significant change in the DAP off-take during the month of October. The total off-take of DAP during October stood at 258-ktons as compared to 255-ktons during the comparable period last year. The year-to-date off-take for the FY05 (January-October) was up by 9.43 per cent and 26.03 per cent for urea and DAP, respectively.

On the textile front, this week two leading textile companies belonging to the Nishat group announced their financial results for the year ended September 30, 2004. The already declared results of some of the textile mills seem to be harbinger of good tidings for the sector. But for the overall sector performance, it is too early to conclude whether FY04 was good, bad or indifferent.