KARACHI, Oct 20: Board meetings of some of the companies with widely traded stocks are scheduled to be held during the current week. The main item on the agenda would be to approve financial results for the quarter ended September.
Investors would be watching out for first or third quarter numbers from Fauji Fertilizer, Engro Chemical, Unilever, PSO, DG Khan Cement, Askari Commercial Bank, Muslim Commercial Bank, Tripak Films, ICI and others.
Market expects companies to present mixed to negative trends with nothing of much excitement coming out of the corporate bag.
“Rising interest rates, stable to negative changes in oil prices, stagnant consumer goods demand, stable rupee and relatively weak market sentiment were the key features of the period under review,” said head of research at KASB Securities, Arshad Arif.
Fertilizer sector analyst at Capital One Equities, Humeira Zaheer projected net income for Fauji Fertilizer to be around Rs690 to Rs740 million for Q3 of FY03 with cash dividend expectations of Rs2 to Rs2.50 per share. As for Engro, analyst thought its Q3 net income would stay within a range of Rs350 to Rs400 million and the company could come up with cash dividend at 20 per cent. KASB held neutral outlook for the fertilizer sector, where Fauji was expected to continue its year-on-year downturn owing to removal of gas subsidy while Engro was likely to outperform as the company was enjoying gas subsidy during the quarter and production levels had remained relatively high.
Ms Zaheer estimated Unilever’s net income to fall in the range of Rs1.25 to Rs1.28 billion for the period ended September. For the Fast Moving Consumer Goods (FMCG) companies, Mr. Arif said that going by the consumption trends of various items in the first two months of the current financial year, most likely scenario would be that consumer companies would also be coming up with flat top line growth and negligible earnings growth in the quarter.
On the financial (banking) sector, analyst at Capital One projected Askari Commercial Bank’s after-tax profit for the nine months FY03 to be around Rs635 to Rs670 million. Taxed profit at MCB was expected to fall within Rs1.62 to Rs1.70 billion.
KASB stated that the rise in interest rates with stagnant deposit costs had made the operating revenues of most of the banks acceptable in a scenario where the private sector credit had seen an unusual growth of Rs16 billion. “However, the adjustments in revaluations of asset portfolios on the back of rising interest rates and falling equity market are likely to give an overall ‘negative’ view on the sector,” analyst stated.
Negative changes in oil prices along with a dramatic fall in volumes were feared to lead to a year-on-year fall in profit for all Oil Marketing Companies (OMCs); Pakistan Telecom was unlikely to come out with any exceptional year-on-year growth in its earnings, due to pressures on international side owing to strong rupee and strong growth in the voice-over-internet-telephony (VOIP). PSF sector was forecast to post some improvement in the quarter and cement companies were expected to register positive earnings growth, though the market looked to have already discounted the optimism in prices of cement stocks.