KARACHI, Sept 13: More than four million shares in Nagina Cotton Mills Limited, that measured to about a quarter of the company’s equity were offloaded by a financial institution at average price of Rs18.92, earlier this week.

The deal — quite lawful and reported to the KSE — was noticeable only because the stock in Nagina is almost illiquid, with less than half a million shares traded in all of 2001. The 4.114 million shares that changed hands probably on Monday, accounted for 22 per cent of the company’s 18.9 million total outstanding shares and were bought and sold at premium of above 20 per cent to the market value of Rs15.45.

Stock broker, Ismail Abdul Shakoor, who oversaw the deal was not available for comments as the staff at his office said that he had been taken ill; and others would not entertain queries of prying press men about which financial institution had sold to whom.

Professor Iqbal Ismail, who heads brokerage house, Ace Securities pointed out in his daily report on Friday, that intelligent investing in stocks was more about when to sell — than when to buy. By that yardstick, if the financial institution had been holding on to the stock for some years, its decision to offload now could not have been more appropriately timed. Aside from the 20 per cent premium over the current market price, the institution has come off at the upper end of the stock’s historic value, for the share in the company has continued to trade at the average price of Rs15.20 since at least January. Also two years ago, the institution would possibly have received less than half of Rs75 million, which it ought to have made from sale, because at the time, it would be holding only half the stock. Nagina had declared a bonus issue in 2000 at 100 per cent, which went to double the number of outstanding shares from 9.4 million to 18.8 million. That bonus had materialized after five years of the earlier bonus at 10 per cent declared by the board in 1994. Possibly 50 per cent of the outstanding shares in the company are vested in over 1,000 individual investors. The company is a flagship unit of the Nagina group and ranks among the scarce spinning mills that make over billion rupees in sales. Other listed units of the group include: Ellcot Spinning Mills Limited; Prosperity Weaving Mills Limited and the captive power plant — Ellahi Electric Company Limited. The last named is now proposed to be bifurcated into three parts and each to be subsequently merged with a separate associated company.

And here is an interesting tailpiece: If the financial institution that sold its enormous holding in Nagina could be assumed to have done it at the right moment, what calculations may have prompted the purchaser to take stakes at this time? Long-term investment gains — maybe, for the company is understood to be in the throes of balancing, modernization and replacement (BMR).