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Chairman SECP meets KSE Board of Directors

2012-01-27T16:45:00.000+05:00

The SECP Chairman, Mr. Muhammad Ali, met the outgoing and newly constituted Board of Directors of the Karachi Stock Exchange on Thursday. In his address to the Board members he appreciated the valuable services rendered by the outgoing Board. He expressed the belief that the new Board would deliver in the best interest of the capital market adopting a coherent approach and discouraging any compartmentalization of the Board while benefiting from the extensive knowledge and expertise of individual members. He emphasized that the investors’ interest should be supreme, over and above members’ interest and the management and Board are jointly responsible for the protection of investors.

The SECP Chairman gave an overview of the financial landscape of the country and the capital market. He mentioned that in Pakistan the banking sector continues to dominate overall financial industry and enjoying confidence of the general public. He viewed that the existing fiscal structure works against corporatization as income tax rate on companies is higher than other business structures like partnership or proprietorship. This discourages documentation and general culture of corporatization. The non-banking financial sector presents a bleak picture not only in terms of financial assets, but also with regards to participation and outreach to general public. He emphasized upon the need for creating awareness amongst the masses about the capital market and restoration of investors’ confidence. For achieving a vibrant capital market his speech focused on various areas including (i) investor education and awareness, (ii) market surveillance,(iii) automation, (iv) debt market development, (v) resolution of investor complaints, (vi) image building and legal and structural reforms.

On investor education side the SECP’s initiatives relate to a detailed three-year investor education plan for different segments of target groups, restructuring of the Institute of Capital Markets which will work as an executing arm of the SECP’s investors education/awareness initiatives in collaboration with the stakeholders. The Chairman emphasized upon the exchanges and brokers to impart investor awareness and education with a view to attract investors to the capital market. The Chairman also urged upon the Exchange to put in place mechanism for expeditious resolution of investors complaints which is important in restoring the confidence in the market. Also, the members of the stock exchanges need to be abreast of the regulatory and legal framework and work aggressively towards improving image of our market to the international community.

In relation to automation, the need for enhanced internet trading module was emphasized to bring our market to international level and expand the existing narrow outreach. The SECP also discussed the envisaged augmentation of business structure of brokers to allow them to function on lines of an NBFC with certain restructuring. This will provide opportunity to pool resources to have financially strong entities with ability to offer diversified financial services. .

The Chairman reiterated that globally only after demutualization, the exchanges have succeeded in giving competition to banks for public’s savings, maximize brokers’ business by achieving mass outreach and eventually lead to wealth creation for all market participants and investors. Brokers must let loose on their control over the exchange exercised traditionally, and forgo on the membership card value which is meager as compared to the benefits that would be reaped in the medium and long term. Besides demutualization for effective market regulation and investor protection, the promulgation of Securities Act and Futures Trading Act was in pipeline. All these laws are vital for strengthening our capital market, increasing business of market participants and attracting new investors.

The KSE Board was also briefed on some other key SECP initiatives in process which include introduction of the revised Code of Corporate Governance, allowing takaful window to insurance companies, establishment of centralized KYC Registration Agency, fiscal reforms in coordination with the FBR and development of a long term Financial Market Development Plan.

Engro Foods announces profit of Rs 891 million

2012-01-26T13:46:00.001+05:00

ByAbdul Qadir Qureshi

TheBoard of Directors of Engro Foods Limited has announced a profit after tax ofRs. 891 million for the year ended, December 31, 2011 as compared to Rs 176million in 2010.

Engro Foods’ revenue for 2011 recorded an increaseof 43% and stood at Rs. 30 billion as compared to Rs. 21 billion in the 2010.The Company also announced an EPS of Rs. 1.22 (basic & diluted) for theyear 2011 as compared to EPS of Rs 0.31 in the year 2010.

EngroFoods continued to consolidate its growth through the year and during the firsthalf of the year, in May 2011, the foods business raised Rs. 1.2 billion byissuing 48 million shares to the institutional investors – mainly the US &UK mutual funds – at a share price of Rs. 25 per share. The Company’s vision toenhance its footprint and pursue a focused growth strategy led to thefirst-ever public offering of 27 million shares of the business to the generalpublic at a price of Rs. 25 per share, inclusive of a premium of Rs. 15 pershare.

TheCompany has continued its aggressive business strategy of growth anddiversification and achieved volume growth of 22% in 2011. Building on itspromise of elevating consumer delight, the business diversified into popularlypriced, high quality product category with the launch of Dairy Omung – anutritious and affordable dairy product for lower income consumers. Innovationremained at the core of the business’s product expansion strategies this yearand we also introduced Olper’s variants of Badam Zafran and Rose flavors whichwere well received by the market.

Theyear 2011 also marked the relaunch of the refreshing Olfrute brand whichcontinues to reflect strong consistent growth in its volume base. With six invigoratingflavors Olfrute registered a volume growth of 236% in 2011.

Omore’svolume increased by 43% in 2011 and the company continued toinvestment in its brands, product development & diversification and coldchain infrastructure.

TheCompany’s Nara Dairy Farm continued to remain a rich and nutritious source ofraw material for its dairy segment. The Nara Farm produced over 5.8 millionliters of milk in 2011 with a total herd size of over 3,000 animals.

Mirroring its success in the local market, Engro Corp – theparent company – made its foray within the international arena with acquisitionof Al-Safa – a leading halal meat brand in North America– at a total cost of US $6.3 million in April 2011. The business is owned byEngro Corp, but managed by Engro Foods. Duringthe first 8 months of operations (since the acquisition) till December 31,2011, Al-Safa brand sales were US $5.3 million and the operational loss was US$ 1.2 million including the pre-commencement cost of US $0.33 million.

Since Engro Corporation currently owns the equity stake inEngro Foods Canada these losses are not included in the Company’s financialperformance. Engro Foods will buy the equity shares from the holding Company atthe actual cost post-approval of the Regulator.

The Board expressed confidencein the strategic vision and direction of the management and indicated a clearsignal to pursue a long-term growth strategy by building an inherentcost-consciousness and product positioning for the business.

Proposals of SECP accepted on CGT: Hafeez Shaikh

2012-01-22T22:52:00.001+05:00

The Federal Minster for Finance upon invitation ofthe Securities and Exchange Commission of Pakistan (SECP) had a visit to theKarachi Stock Exchange, today.

The Minster highlighted various financial andeconomic reforms undertaken by the Government of Pakistan over the last fewyears. While appreciating the SECP’s initiative for improving liquidity in themarket, enhancing investor education and awareness and the brokers’ capacity totrade, he announced the approval of SECP’s proposal on revamping of CapitalGains Tax (CGT) submitted to the FBR last week. The SECP had been in dialoguewith the Ministry of Finance and the FBR on the rationalization of CGT. The following solutions have been agreedupon for a more balanced and investment friendly CGT approach:

- In view of the official but undocumented gains accrued prior to theimposition of CGT an investment window will be provided till June 30, 2014whereby investors will be able to invest in the stock market such undocumentedgains. This will allow investors to invest in the stock market. Legal andoperational changes to give effect to this would be made by April 01, 2012.

- Rate of CGT shall be frozen at the existing 10% on securities held forsix months and 8% on securities held for a year till June 2014.

- Subject to certain minimum holding period, which will be worked outbetween FBR and SECP, highest value of an investor’s portfolio till June2014 shall be treated as income generated from the capital markets.

- To provide ease of calculation and documentation to individual investors,the National Clearing Company shall act as a withholding agent to deduct anddeposit the CGT from investors’ transactions. SECP and FBR, along with other capitalmarket service providers, would work out exact details so that necessary legaland operational changes are made by the target date of April 01, 2012.

- Lastly, transaction/turnover tax under section 233A(1) will be abolished.

The revamping of CGT would address the concerns ofmarket players in terms of low trading volumes and is in line with theGovernment’s objective of documenting all incomes and sectors of the economy.This will also lead to generating additional tax revenue for the Government’s exchequer.

The Finance Minster emphasized upon the need fordemutualization of the stock exchanges to improve the governance structure inline with international best practices and assured of his personal efforts inexpediting the pending Demutualization Law, Securities Act and Futures TradingAct. He mentioned that promulgations of these laws are essential for taking thePakistani capital markets to the next level of development.

In addition to the revamping of CGT, the ChairmanSECP announced various additional measures for supporting activity in the stockmarket. This includes allowing individual investors to participate in theMargin Trading System as financiers, re-composition of cash margin requirementfrom 25% to 15% and remaining to be acceptable in eligible securities. Also, in order to enhance brokers capacityto execute business, the SECP will allow additional business limit and clearingof approximately Rs. 50 million per member of Karachi Stock Exchange againstcollateral of Rs. 10 million per member from the Clearing House Protection Fund(CHPF). The CHPF of the three stock exchanges will be transferred to theNational Clearing Company and maintained as three separate pools of funds toexecute the above arrangements.

SECP names independent directors for KSE board 2012

2012-01-12T01:30:00.002+05:00

The Securities and Exchange Commission of Pakistan has re-nominated/re-appointed Mr Muneer Kamal, Shazad G. Dada, Asif Qadir and Abdul Qadir Memon on the Board of the Karachi Stock Exchange (KSE) for the 2012 term. They had also served on the KSE Board last year as independent directors and their appointment can be seen as a fair balance of the requisite qualifications and skills on the board.

Mr Muneer Kamal, presently vice-chairman of the KASB Bank Limited, has over 28 years of extensive experience of the banking and financial sector during which he has served locally and internationally on senior positions at various renowned banks. Mr Shazad Dada, CEO, Barclays Bank PLC, Pakistan, is a seasoned banker and a prominent capital market professional. He has over 20 years of major national and international financial markets’ experience.

Mr Asif Qadir, president and CEO, Engro Polymer and Chemicals Limited, has over 30 years of management and marketing experience of the chemical and fertilizer sector and has served in key management positions on the chemical giant Engro Corporation Limited. Mr Abdul Qadir Memon, Fellow of the Institute of Taxation Management Pakistan and President, Pakistan Tax Bar Association, is a senior resource and is a renowned tax and corporate laws expert, possessing an in-depth knowledge about the various aspects and implications of the corporate matters and company laws.

It is expected that the KSE Board in particular and the capital markets in general, will continue to benefit from the mix of extensive knowledge, global experience and diverse expertise that the above professionals possess. It is hoped that the directors will continue to contribute positively to promoting principles of good governance, transparency and will be instrumental in bringing about various capital market reforms.

PSO receivables increase to Rs 180 billion

2011-12-27T20:58:00.002+05:00

financial valuations ofPSO is futile…

Pakistan’s biggest petroleumhandler, Pakistan State Oil (PSO) ison the verge of financial collapse since its outstanding duesfrom various ‘energy sector’ entitieshas reached to the extent of Rs180bn (which is highestin 4‐years). It seems that nobailing out is forth coming from ministry of finance(MoF). Actual cash flowsof theentity have gone negative due toincidence of more short term loans to keep the daily operations afloat. It is imperative that the calculation of DCF value of such anentity may be a

futile exerciseand thus tantamount to mislead investors.

Liabilities swelling…

When PSO is notreceiving due payments,it is hard for their treasury to arrange payments for refineries. Right now PSO has topayRs172bn of many companies that also include internationalprincipals thus painting a negative imageoutside.

PSOs’ total payables to local refineries have reached Rs75bn of which it has topay Rs

35.7 to unlistedPak‐Arab Refinery Limited(PARCO),Rs 10 bn to Pakistan Refinery

Limited (PRL), Rs8bn to National Refinary Limited(NRL) , Rs 18 billion to Attock

Refinery (ATRL), Rs 2 bn BYCO petroleumetc.

List of defaulters

The power sector is a major defaulterof PSO, which owes Rs 153bn such as poorly managed state run WAPDA that owesRs 39bn and independent power producers such asHUBCO that owes Rs79bn & KAPCOthat owes Rs 35bn. Publicutility KESC also owes

4.55bn. Among allthese companies that owe, itis WAPDA which is responsible for this

awful crisis since it is themainculprit behind whole crisis.Had WAPDA being managedproperly and paid to powerentities, this crisis of huge proportions could nothave happened.

Some of the other receivables include Rs 1.3bnover price differential claim(PDC) on

HSD &Rs 3bn on HSFO.

Some likely repercussions…

We see thisreceivable to be ballooned since government is entangled in multiple crisesranging from fiscal constraints to political fallout. It is imperative thatinvestors should see realworth of such companies that used tobe cash rich till 2007‐8 but sincetrapped into vicious cycle of‘circular debt’. Thenon resolution of issuesmeans that investors should wait while making an entry intothescript. Couple of monthsback there was someresolution coming wherein bankswere about to bailout energy companiesfrom this ‘circular debt’; however,no solution is inside.

Here we prefer AttockPetroleum (APL), a small Attock Group oil handler, over PSO. Wherein we consider SHEL as aweak business model owing to theirexposure in depleting CNG business.

http://www.scstrade.com/research/Research%20Reports/General/PSO%20receivables%20increase%20to%20Rs%20180%20billion.pdf

Senior SECP officials met with KSE Board, Management & Members

2011-12-08T15:21:00.001+05:00

Senior SECP officials, headed by the SECP Chairman, and Chairman, Karachi Stock Exchange met with the Board of Directors, Management and Members of the Karachi Stock Exchange on Wednesday.

The meeting discussed various important market related matters including the proposed new broker registration regime. The SECP briefed the participants on the various significant steps taken by it to ensure sustainability and providing confidence to the market participants and proposals that were under discussions. It was emphasized that all reform measures that have been introduced in the past and currently being considered were in close coordination and consultation with the relevant stakeholders and are designed to improve trading volumes and enhancing retail participation in the stock market.

The participants were briefed on the SECP’s strategic objectives for the coming years. The key objectives highlighted include:

(i)Structural and regulatory reforms for the market;

(ii)Measures for investor education/awareness, restoration of investor confidence and expansion of market outreach;

(iii)Development of equity market in particular the derivative market,

(iv) Development of debt market,

(v) Development of commodity and currency markets;

(vi) Strengthening the capital market intermediaries for efficient operations and improved regulation;

(vii)Improving governance, risk management, efficiency and transparency in the market operations

(viii)Development of Islamic Products and Shariah-compliant investment alternatives; and

(ix) Image-building of the market.

While discussing the concept paper on proposed new “Broker Registration Regime” the SECP reiterated that the proposed regime would help in strengthening the market by allowing only fit and proper brokers to operate in the market. It will provide a framework where only qualified, experienced, sustainable, technically and financially strong market participants would operate as brokers. All these measures will help in better protection of the interests of the investors and would lead our market to another step closer to acceptable best international standards. It was also clarified that the concept paper was sent to the exchanges for soliciting comments and that the regime will be finalized after giving due consideration to the concerns and feedback of the stakeholders.

In addition, other proposals such as, corporatization of exchanges, streamlining the account opening process and corporate governance issues including matters related with the Clearing House protection fund were also discussed. SECP assured that all proposals are under the review process and the future course of action will be taken in the light of legal provisions with the aim to provide appropriate facilitation and support to the market. The regulators agreed to continue the consultative process and coordinated approach in future also to ensure implementation of various market reform measures.

SECP seeks comments on draft Thermal Energy (Cost Accounting Records) Order

2011-12-02T20:49:00.001+05:00

The SECP has developed and approved draft Thermal Energy (Cost Accounting Records) Order, 2011, for the company engaged in production, processing and generation of thermal energy/power. The companies engaged in generation of thermal energy are required to maintain such cost accounting records, including all particulars relating to utilization of material, labour or other inputs of items of cost as would be necessary..

The aforesaid draft will be issued in exercise of powers conferred by clause (e) of sub-section (1) of section 230 read with section 246 of the Companies Ordinance, 1984, and section 40 B of the Securities and Exchange Commission of Pakistan Act, 1997.

Cost audit can only be an effective regulatory tool when the cost records are properly prepared and cost audit reports are made on a uniform format for a particular sector. In order to bring uniformity to the cost records and cost audit reports, the SECP requested the ICMAP to develop guidelines for new sectors. The guidelines for thermal energy sector were received from the ICMAP. The SECP also sought comments from Private Power and Infrastructure Board (PPIB) and all the companies engaged in the thermal energy sector.

The SECP invites feedback from all concerned within 30 days and appropriate suggestions or objections will be considered by it. It has been emphasized that regulatory apparatus at the SECP intends to foster efficiency and transparency thereby promoting sustainable growth. The SECP strives to make right regulations in the interest of the industry, as a whole and also in the interest of the other stakeholders. Cost audit can provide relevant and credible cost and revenue data to the stakeholders to support their decisions. Cost audit mechanism acts as a measure of efficiency and performance. It can serve as an important tool for effective enterprise governance, competitiveness and strengthening the regulatory mechanism.

Karachi Stock declines 2.8% in Nov amid squeezing volumes

2011-12-02T20:30:00.001+05:00

The Karachi Stock Exchange (KSE) 100-share index lost value in November 2011, albeit with a marginal decline of 2.8 percent on monthly basis, but the value erosion doubled in dollar terms (5.5 percent on monthly basis) during the month due to the rupee depreciation of 2.6 percent against the greenback.

Continuing with still high volatility marked with one of the lowest volumes years so far, Pakistan’s equities headed southwards especially last week amid severe noise not only on home’s political canvas but also on the latest event of a ‘friendly fire’ from the so-called ally, USA, of the country, killing a bunch of military personnel of the latter.

Following such unprovoked strike, the government responded with seize on NATO supplies while ordered the USA out of the airbase at Shamsi. This joggled investors at both equities and forex markets resulting in a speedy drainage in their respective values. In addition, fear of the commencement of a random audit by the Federal Board of Revenue (FBR) (from December 11 onwards) with respect to capital gains tax’s filing also kept investor away from equities.

As a result, average market volume stood at a significantly lower level at $34.2 million during November 2011, down 41.7 percent on monthly basis (last decade’s average at $178 million) while it was down 39.6 percent on yearly basis. Shaking macro scenario of the economy coupled with only negative news flow from some of the key sectors like fertilizers (price declines with increased gas shortages) and banks (rising non-performing loans and asset quality concerns) served as major dampeners. Only positive development on the E&Ps front (Nashpa flows and Zin block excitement) supported the KSE 100-share index to an extent. The KSE 100-share index also declined by 2.7 percent on yearly basis in November 2011 (5.2 percent in dollar terms) settling year-to-date (YTD) return to -4.1 percent, while its value erosion in dollar terms now cumulates to over 10 percent YTD.

In regional perspective, after lagging behind world markets last month, Pakistan equities stood above average regional market returns in November 2011 (where regional as well as world equities lost values as recession and debt-default fears furthered in the US and eurozone economies, respectively). Though, below its benchmark Frontier Market Index, Pakistan equities yielded –5 percent on monthly basis against global equity return average of –7 percent on monthly basis. The KSE 100-share index’s YTD return is still way better than not only its benchmark, Frontier index (down 21 percent YTD), but also other regional peers and other world benchmark indices (MSCI Emerging –19 percent YTD).

As far as foreign equity flows go, Pakistan equities faced slower pace in foreign outflows with one of the lowest total in the Asia Pacific region during November 2011 (with only $4.2 million against regional outflows of $5.7 billion during the month). It is worth mentioning that, on a YTD basis, Pakistan equities stand with smallest size of outflows with only $102 million among regional countries experiencing foreign outflows in equities while regional equities combined stood with a massive outflows of $16.4 billion during this period. On historical patterns, the month of December has been one of the most volatile months of the year (may be due to book maintenance by the institutions) with last decade’s December average return of only 2 percent (ranging wide between –36 percent to +18 percent on monthly basis). However, notwithstanding low average returns during last decade, the KSE 100-share index had returned 7 percent on monthly basis during December last year.

With no further policy rate cut provided by the central bank in its latest MPS, recent deeper strains in Pak-US ties, rising concerns on the rupee value also in the wake of larger-than-budgeted balance of payment (marked by higher oil import payments amid increased gas shortages, slower exports, limited foreign aid/funding and significant International Monetary Fund-loan repayment from February 2012 onwards), equities are expected to remain sluggish largely in the short-term. Equities may continue to suffer until and unless a positive development, either on CGT issue or financing product (MTS), takes place in the mean time, which would encourage increased volumes and thus price discovery. (Daily Times)

SECP develops databases on equity and debt markets

2011-11-24T20:53:00.001+05:00

In order to ensure the provision of accurate and timely information relating to performance and dynamics of capital market to various stakeholders, the SECP has developed various databases, which include a wide range of information relating to equity and corporate debt markets of the country.

The databases include information regarding equity securities for the time period ranging from as earlier as 1992 and relates to public offerings and issue of shares. It further contains valuable information relating to debt instruments and securities including listed and privately-placed term finance certificates, commercial papers, sukuk and securitized structure debt instruments. The databases are further augmented by the details of securities issued outside Pakistan including depository receipts.

The basic purpose of these databases is to increase the awareness of the market participants and general investors regarding the capital issues activity. This would also assist in conducting academic and empirical research by a number of factions. This initiative moves in line with its overall objective of promoting and enabling effective and adequate disclosure and dissemination of useful information relating to capital market to the general public.

The capital market databases can be easily accessed by following the link below on SECP’s website: www.secp.gov.pk/SMD/smd_secanalsis.asp

SECP discourages wasteful expenditure on board meetings abroad

2011-11-04T08:58:00.000+05:00

ISLAMABAD, November 3: In recent past it was observed that meetings of boards of directors of listed companies were being extensively held abroad, even at places that were unrelated to concerned companies’ business activity or geographical location of their shareholders.

This undesirable practice on part of directors that owe a fiduciary duty towards the company was resulting in undue costs for the listed companies as well as their minority shareholders with no benefit thereof. In order to check such detrimental trend the Commission has, while taking serious note of this practice and in exercise of its powers, linked the number of board meetings that a listed company may hold abroad with the proportionate participation of foreign directors on its board/equity.

Accordingly, it has been directed that all listed companies incorporated in Pakistan having foreign equity participation, if required, can hold board meetings abroad, in any one financial year, as per thresholds prescribed below:

i.	Companies having more than 50% foreign shareholding	Maximum 4 board meetings
ii.	Companies having more than 40% but up to 50% foreign shareholding	Maximum 3 board meetings
iii.	Companies having more than 30% but up to 40% foreign shareholding	Maximum 2 board meeting
iv.	Companies having nil or up to 30 % foreign shareholding	Maximum 1board meeting

SECP finalizes revisions to the Code of Corporate Governance

2011-10-31T21:42:00.000+05:00

The Securities and Exchange Commission of Pakistan (SECP)held a meeting with the Pakistan Institute of Corporate Governance (PICG) taskforce to finalize the proposed revisions to the Code of Corporate Governance.The meeting was held at the SECP office in Karachi on Monday.

The meeting was attended by the SECP team led by theChairman, Muhammad Ali, and the task force members including the Chairman ofthe task force, Ebrahim Sidat. Some of the prominent members of the task forceincluded Zafar Ali Khan, Moin Fudda, Fuad Hashmi, Sadia Khan, Lubna Farooq,Pervez Ghias and Masoud Naqvi.

The meeting was held to finalize the code inconsultation with the task force members and in light of recommendationsreceived from different stakeholders. The meeting deliberated on differentrevisions proposed to the code and issues raised by the stakeholders at the roundtablesand meetings held for the purpose in Karachi and Lahore. The revised code willbe implemented after approval of the SECP in November.

SECP takes punitive action against non-compliant market participants

2011-10-13T10:57:00.000+05:00

In order to foster a transparent and efficient securities market and to safeguard the investors’ interests, the Securities Market Division of the SECP took enforcement actions and penalized the market participants for non-compliance to the regulatory framework in September.

Three orders were passed against the beneficial owners/directors of the three listed companies under Section 224 (4) of the 1984 Companies Ordinance. In addition, 27 warning letters were issued to the directors and beneficial owners of 15 listed companies for non-compliance to Section 224 (2) of the Companies Ordinance.

In another instance, an order was passed against a company (offerer) under Section 22 of the 1969 Securities and Exchange Ordinance, whereby a penalty of Rs300,000 was imposed for non-implementation of SECP’s earlier orders issued under Section 18-A (for submitting fictitious and multiple applications in public offering). In addition, an order was issued against a brokerage house under Rule 8 of the Brokers and Agents Registration Rules, 2001.

The SECP resolved six investor complaints pertaining to brokers and three complaints pertaining to listed companies during the month. Further, nine amendments were approved to the regulatory framework.

Gul Ahmed Textile declare 100pc bonus

2011-10-04T22:01:00.001+05:00

Gul Ahmed Textile Mills Limited has posted a record profit after tax of Rs 1.196 billion for the year ending June 30, 2011 and announced a 100 percent bonus share.

According to financial results of the company despatched to Karachi Stock Exchange here Monday, the pre-tax profit also surged to Rs 1.537 billion for the period under review as against Rs 708.227 million in 2010. The earning per share jumped to Rs 18.85 compared to Rs 7.52 last year.

SECP organizes investor feedback programme in Karachi

2011-09-23T20:22:00.002+05:00

The Securities and Exchange Commission of Pakistan (SECP), in collaboration with the Karachi Stock Exchange (KSE) and National Clearing Company of Pakistan (NCCPL) organized an “Investors’ Feedback Programme” in Karachi.

The programme was attended by representatives of all major capital market intermediaries including brokers, mutual funds, insurance companies, banks/DFIs and corporate pension funds and major brokerage houses. It was held to seek feedback of these entities on measures required to build investor confidence and increase investor participation in the capital market activities. The organizers also highlighted key institutional reforms introduced in the capital market that have significantly reduced market risk, added transparency, and enhanced transactional efficiency.

The programme proved instrumental in brainstorming ideas and steps needed to be taken in various segments of the capital market both primary and secondary. The participants deliberated upon suggestions floated in relation to improving activity in various stock market products bringing-in liquidity, expanding the outreach of the market to the masses for increasing the retail investor base and various fiscal reforms needed for creating level playing field. Measures were also discussed for improved governance at capital market intermediaries and institutions, including internal workings at these entities, greater operational efficiency, enhanced risk management, combating market abuse, investor protection and awareness and encouraging new listings though reforms in the initial public offering and book building processes etc.

The participants appreciated the initiative of investor forum and termed it as a right step in the right direction. The feedback from the meeting will be discussed with the capital market infrastructure institutions to transform the suggestions into practical steps and carryout requisite regulatory reforms for facilitating the capital market participants.

While reiterating its commitment to the development of the Pakistani capital market, the SECP assured the participants of closer coordination with the stakeholders on all major capital market policies and reforms.

Securities and Exchange Commission of Pakistan: Dialogue with stakeholders for development of financial markets and corporate sector

2011-09-13T20:17:00.000+05:00

The second meeting of the SECP Financial Markets and Corporate Sector Development Forum was held in Lahore with market experts, industrialists and policy makers in attendance. The agenda for the meeting was to generate ideas and solutions to develop fair, transparent and efficient financial markets and a vibrant corporate sector.

Some of the best minds from various sectors and professions were present on the occasion including among others; Mr. Mian Mansha, Mr. Habib Ahmed, Dr. Salman Shah, Mr. Mumtaz Hussain Syed, Mr. Sheikh Mukhtar Ahmed, Mr. Syed Yawar Ali, and Mr. Abdul Hameed Chaudhri.

Mr. Mohammad Ali, Chairman SECP, while opening the session remarked that “the SECP recognizing the need to develop vibrant markets, sectors and market players as well as to improve its capabilities and processes, has engaged the external stakeholders in a consultative process both at policy level of SECP Forum and working level of sector specific committees.”

Mr. Mohammed Ali further stated that the ideas and suggestions aired at the SECP Forum would improve the effectiveness of the SECP as a regulator of the markets and contribute to capital formation leading to the growth of the economy. He stated that the guidance from the policy level of SECP Forum will be implemented at the working level and would reflect through SECP’s actions in near future.

Various issues hampering growth and development of the markets and corporate sector in the country resulting in fragmentation in the markets were discussed at the SECP Forum. The issues identified ranged from efforts to encourage entrepreneurship and listing through fiscal incentives and simplified regulatory procedures for public companies, development of insurance and pension sectors to develop a long term savings culture in the country, appropriate monitoring to avoid front running and encourage good practices in equity and capital markets, develop a bond market parallel with equity markets, and to establish a mechanism for certification of financial sector professionals and entities.

The participants also highlighted the immediate need to achieve the critical goal of protecting investors while also helping to build investor confidence in the markets. It was emphasized that the SECP should undertake education and awareness campaigns with reference to legal obligations, benefits of corporatization and public listing as well as on financial intermediaries businesses. The need to institutionalize coordination with the judiciary so as to ensure speedy disposal of cases was also stressed.

SECP revises eligibility criteria for securities for Margin Financing

2011-08-11T22:32:00.000+05:00

In a move to facilitate market participants and in the interest of the capital market, the Securities and Exchange Commission of Pakistan (SECP) has accorded its approval to revised eligibility criteria for securities in the Margin Financing (MF) Market.

Under the revised eligibility criteria, which forms part of the Regulations of the National Clearing Company of Pakistan Limited (NCCPL), 147 securities stand eligible for financing purposes in the MF Market. The NCCPL will notify the list of eligible securities while giving the required notice to the market.

The revision in the said criteria and increase in the number of securities has been approved taking into account that the MF is a counter-party risk-based product, which does not entail any centralized risk management system and that the brokers perform risk assessment for their clients. The said revision has been approved based on the discussions with the Karachi Stock Exchange and senior market participants.

The said move is also expected to act as a deterrent against the malpractice of in-house financing. The stock exchanges have accordingly been advised to notify it to their respective members to ensure complete compliance in relation to the ban on in-house financing and to put-in place appropriate monitoring system to ensure the same.

SECP to take measures to curb front-running

2011-07-14T20:15:00.000+05:00

ISLAMABAD: Integrity, transparency and fairness in the capital markets are critical for protection of investors and enhancing their confidence. However, market abuses and unfair trading practices such as front-running/insider trading negatively affects this basic essence of the markets. Front-running, a form of insider trading arises when a person engaged in processing or making investment decision/order in his official capacity uses that information for his personal benefit directly or indirectly.

This undesirable activity usually takes place in institutions active in the capital markets such as brokerage houses, mutual funds, financial institutions and entities having large investments in the capital markets. These institutions either process investment orders of their clients like brokerage houses or manage their own or third party portfolio like banks, DFIs (development finance institutions), insurance companies, mutual funds, pension funds, etc. In these institutions investment order/decision of the client or of the institution itself could be front run by the person processing or taking investment order/decision. The basic purpose of front running is to take advantage of the price movement caused by the large trading order once it is executed in the market.

The market monitoring and surveillance activities of the SECP highlight and identify such market misconduct, for which enforcement actions are taken and the enforcement orders for which are also placed on the website of the SECP regularly for information of general investing public. In addition to regulatory enforcement, it is vital to obtain a lucid view of determinants of control systems adopted and implemented by institutions to detect and prevent irregularities including front-running/insider trading.

In view of the same, the SECP constituted an internal committee to look into various aspects of front-running/insider trading. The committee analyzed the regulatory and legal framework governed by the SECP to prohibit this offence. Additionally, the controls and policies adopted by various institutions were also assessed. As a result of the analysis and findings, the committee made recommendations for developing a Code of Business Conduct for trading/investment practices aimed at strengthening the regulatory and legal framework to detect and prohibit such improper trading practices. The said code is intended to be implemented at all major institutions which actively trade in the stock markets including brokerage houses, non-banking financial companies, insurance companies, banks and development financial institutions.

The committee also made recommendations with respect to enhancing the control structure of institutions and market participants specifically in the areas of investment decision-making and execution of trades in addition to overseeing the trading activities of their employees. The analysis by the committee has fully emphasized the importance of internal audit function to review and assess the effectiveness of control structure. Respective regulatory body or ministry of these institutions would be taken on board for effective implementation of the code and control measures.

The implementation of these recommendations will encourage and facilitate self-regulation by market participants and institutions to control and prevent unfair trading practices, which is in line to augment the prime objective of the SECP to promote fairness and enhance efficiency in the capital markets.

Sohail Wajahat Siddiqui made new Chairman of PSO

2011-07-08T21:46:00.000+05:00

The Ministry of Petroleum and Natural Resources has notified appointment of Sohail Wajahat Siddiqui as chairman of the board of directors of Pakistan State Oil (PSO).

Siddiqui has replaced Nazim F Haji with immediate effect.

Sohail heads Siemens Pakistan Engineering Company Limited as its Managing Director and Chief Executive Officer.

He has served as the president of the Overseas Investors Chamber of Commerce and Industry (OICCI) and also served as chairman of Pakistan Red Crescent Society, Sindh.

Siddiqui has also served as board member of Pakistan Steel. He is also the founding member of the Pakistan Business Council.

In recognition to his contribution towards the national cause, he has been awarded Sitara-e-Imtiaz. (The News)

SECP amends the format of Statement in Lieu of Prospectus issued by a private company on its conversion into a public company

2011-07-08T20:23:00.000+05:00

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has amended the Statement in Lieu of Prospectus which is contained in Part III of Second Schedule of the Companies Ordinance, 1984, required to be filed with the registrar by a private company converting into a public company. SRO No. 677(I)/2011, of July 8, 2011 has been placed on the SECP website www.secp.gov.pk

Previously, the Statement in Lieu of Prospectus format required to be filed by public unlisted companies for obtaining Commencement of Business Certificate was substituted with new one, vide SRO No. 289 (I)/ 2011 of April, 4, 2011.

On the same lines, amendments have now been made to the Statement in Lieu of Prospectus format required to be filed by a private company converting into a public company. Amended format has been designed compatible with SECP’s eServices regime and suitable for online submission environment.

Relevant information regarding the company, i.e., Corporate Universal Identification Number, Registered Office and contact details have been added keeping in view the requirements of all the stakeholders.

Previous format contained some cumbersome and difficult information. Amended format contains more detailed and simplified information on authorized and paid-up capital of the company, particulars of directors, chief executive, secretary etc, remuneration payable to these persons, number and amount of shares and debentures issued or agreed to be issued, amount of discount, if any, allowed on issue of any shares, details of every agreement entered, preliminary expenses, rate of dividends in previous years etc. In addition, unnecessary and duplicate information has been deleted to facilitate the stakeholders.

SECP gets taxation regime reformed

2011-07-05T15:27:00.002+05:00

ISLAMABAD: Working in conjunction with the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan, through the Finance Act 2011-12, got the taxation regime for capital markets, corporate and non-banking financial sectors reformed.

The SECP’s strategy encompasses continuation of reforms in the capital markets and corporate sector, deepening of structural reforms through removal of anomalies constraining economic activity, and to provide a level playing field to all the stakeholders, recommended various amendments to the 2001 Income Tax Ordinance, which were notified through the Finance Act 2011-12.

The significant amendments are as follow:

Tax Credit on Investment in new shares and for life insurance premiums/takaful contributions paid: To promote investments in initial public offerings (IPOs), the amount of eligible investment to benefit from tax credit on investment in IPO has been increased from existing Rs300,000 to Rs500,000. The percentage of the person’s taxable income for the year from 10% to 15% and the holding period has been extended up to 36 months. Further considering low insurance penetration in Pakistan (0.7% of the GDP), tax credit for premium paid will encourage long-term savings in insurance.

Tax Credit for enlistment of new companies: To encourage capital formation, tax credit of 15% for the year of enlistment has been allowed to companies coming for enlistment on stock exchanges. Existing incentive of 5% tax credit for the year of listing was considered insufficient.

Removal of CVT on Purchase of Instruments of Redeemable Capital: Levy of capital value tax (CVT) on the purchase of any modaraba certificates, or any instrument of redeemable capital has been withdraw in line with the levy withdrawn from purchase of shares.

Tax credit for contribution in VPS: Existing restriction of Rs500,000 to benefit from tax credit for contribution in voluntary pension schemes (VPSs) has been removed to provide a level playing field to retirement schemes; VPS vis-à-vis tax-free contribution permissible to other retirement schemes (superannuation fund: 20% of salary, gratuity fund: 8.33% of salary and provident fund: 10% of salary).

Exempt VPS from minimum tax: To bring parity in minimum tax treatment of VPS vis-à-vis other investment options like mutual funds/collective investment scheme (CIS), NI(U)T and real estate investment trusts (REITs), VPS has been exempted from minimum tax.

Exempts withdrawal of 50% of accumulated balance under pension fund from income tax. The Income Tax Ordinance has been amended to exempt withdrawal of 50% of accumulated balance under pension fund from income tax.

The SECP’s initiatives will help achieve the objectives to document the overall economy through corporatization and listing, stimulate capital formation through non-banking sector, stock market, etc. and to encourage long-term savings through private pensions and insurance.

Gain Tax issue continues to haunt investors as KSE sheds 21 points

2011-06-16T14:43:00.009+05:00

The Karachi stock market closed in the negative zone as investors fretted over continued implementation of capital gains tax (CGT) on certain investments and offloaded their holdings.

The Karachi Stock Exchange (KSE) 100-share index declined 20.79 points or 0.17 percent to close at 12,317.15 points as compared to 12,337.94 points of the previous session. The KSE 30-share index also lost 28.93 points to close at 11,778.40 points as compared with 11,807.33 points.

Analysts said other reasons for the downtrend included, fall in global capital markets and declining value of oil in the international market. Investors preferred to stay to the sidelines owing to lack of positive triggers.

The market turnover went slightly up by 1.16 percent to 54.80 million shares after opening at 54.17 million shares. The overall market capitalisation fell 0.15 percent to Rs 3.256 trillion as against Rs 3.261 trillion. Losers outnumbered gainers 154 to 97, while 104 stocks were unchanged.

"Amid global sell-off in equity markets and fall in commodity prices the KSE continued to correct itself and closed 20 points down," said Topline Sec analyst Muhammad Millwala. "With range-bound activity low-priced stocks remained volume leader. FCCL right led the volume followed by Fatima fertilizer and Bank of Punjab."

The KMI 30-share decreased 44.35 points to close at 21,010.28 points from its opening at 21,054.63 points. The KSE all-share index closed with a loss of 14.13 points to 8,563.10 points as against 8,577.23 points.

"Negative close was witnessed with thin volumes at KSE," said Arif Habib Investment Ltd Director Ahsan Mehanti. "Limited local and foreign interest, uncertainty in global capital and commodity markets played a catalyst role in the bearish sentiment at KSE while developments on Pak-US strategic relationship failed to change the bearish sentiment."

Fauji Cement ® was the volume leader with 4.62 million shares as it closed at two paisas after opening at three paisas, shedding one paisa. Fatima Fert Co traded 4.12 million shares as it closed at Rs 14.57 from its opening at Rs 14.61, losing four paisas. Bank of Punjab traded 4.04 million shares as it closed at Rs 7.12 as against its opening at Rs 7.03, gaining nine paisas. Summit Bank Ltd traded 3.71 million shares as it closed at Rs 4.41 as compared with its opening at Rs 4.31, rising 10 paisas. (Daily Times Pakistan)

EXTENSION OF THE DATE FOR PAYMENT OF TAXES/DUTY FOR THE TAX PERIOD MAY, 2011

2011-06-16T13:55:00.003+05:00

Federal Board of Revenue has extended the date for payment of taxes/duty for the tax period May, 2011, and filing of Sales Tax / Federal Excise returns, up to 20th June, 2011, for registered persons claiming benefit, in exercise of the powers conferred under section 74 of the Sales Tax Act, 1990 and section 43 of the Federal Excise Act, 2005, under SRO. 283(I)/2011 dated 01.04.2011

SECP rebuts criticism on cotton futures contract

2011-06-03T11:13:00.004+05:00

ISLAMABAD: Answering criticism in respect of approving trading of futures contract in cotton at the Pakistan Mercantile Exchange Limited (PMEX), the SECP has reiterated that the concerns raised in this regard are unsubstantiated. The SECP granted this approval after the PMEX had undertaken an extensive process of stakeholder consultation, which includes textile mills and cotton traders/brokers. Also, the said approval was granted by the SECP in accordance with its mandate to regulate matters relating to listed securities that include derivative products like futures contracts in commodities, under the 1969 Securities and Exchange Ordinance and the Securities and the 1997 Exchange Commission of Pakistan Act.

It needs to be understood that ‘futures contracts’ based on commodities are derivative, trading in which is clearly distinct from ‘spot’ or ‘forward’ trading. The SECP does not regulate spot or forward trading in commodities. A futures contract in commodity is a standardised marketable security based on a certain predetermined quantity and it may or may not involve physical delivery. On the other hand, spot or forward trading in commodity involves delivery and therefore clearly involves physical commodity itself with immediate or deferred delivery.

The futures contract in cotton utilizes trading price of an international contract for purposes of referencing and is settled in local currency similar to other futures contract in gold and silver presently traded at the exchange and therefore will not fuel speculation or lead to price volatility as feared by the Karachi Cotton Association (KCA). Since the underlying price is of an international deliverable contract, the cash settlement price will also be of that deliverable contract. The assertion that this cash-settlement procedure is in any way detached from underlying international physical futures trading is incorrect. There is no way that the listing of this contract on the PMEX can influence the price of the underlying cotton contract traded at the international exchange. Gglobally, commodity exchanges offer futures contract in a variety of commodities that are based on international contracts similar to the PMEX cotton contract, which are settled in local currency without involving any physical delivery.

In relation to cotton hedge market, it should be noted that forward or hedge trading in cotton as envisaged under the 1957 Cotton Act and carried out by the KCA prior to the government’s order for its suspension in 1976, falls within the ambit of the Commerce Ministry. However, since the Cotton Act is not a special law to regulate trade in ‘futures contracts’, only a commodity exchange duly licensed/registered with the SECP can trade in ‘futures contracts’ in commodities.

Even today, the domestic stakeholders in raw cotton market use prices emanating from futures contract in international markets for reference purposes, the availability of the PMEX cotton futures contract locally will facilitate the stakeholders in their decision-making process through a conveniently accessible platform. Any concerns regarding price distortion are also irrelevant since this initiative will provide for a regulated platform for investors and stakeholders for trading in futures contracts in cotton, and will thus help reduce price volatility and risk associated with cotton and aid in price determination for this commodity. The cotton futures contract will therefore meet the needs of various market participants and have a positive impact on the cotton industry, the agricultural sector and the domestic economy as a whole.

Resolving difficulties of investors: IMPORTANT DECISIONS TAKEN BY KSE BOARD OF DIRECTORS

2011-06-01T14:04:00.004+05:00

The Board of Directors of Karachi Stock Exchange, in its meeting held on May 31, 2011, focused extensively on resolving difficulties for investors on the one hand and strengthening the Exchange’s risk management aspects to provide confidence to market participants. Besides this, in order to enhance product attractiveness, several initiatives under development were discussed, including Option trading. The Board also emphasized on informational security and level playing field for all investors.

In addition, following market related decisions were taken:

1. Approval was accorded to TOR of following Committees:

i. Development & Trading Affairs Committee

ii. Voluntary Delisting Committee

2. Approval of following regulatory amendments, subject to approval of SECP:

i. Regulations Governing Risk Management to allow placing of circuit breakers on 1st Trading Day of unpaid Right Allotment Letter and newly listed securities on Ready Market.

ii. Regulations for Short Selling to allow short selling without uptick rule subject to average turnover limits.

iii. Listing Regulations to allow forfeiture of application money paid by sponsors, in case of withdrawal of voluntary delisting application.

iv. General Regulations with respect to Standardized Account Opening Form and consequential actions upon suspension, expulsion or default of a member in terms of joint standard follow-up procedure as agreed with CDC and NCCPL.

v. Members’ Default Management Regulations and General Regulations to seek authority for utilization of all assets, including securities held in House/Main Accounts of expelled/defaulter members.

vi. Regulations with respect to Options trading.

3. Approval of addition of mandatory settlement field in Off-Market Reporting Interface on NCHS.

4. Issuance of ten (10) trading hall passes to each member for their clients and/or employees.

5. Grant of extension of thirty days’ period to dispose-off of appeal filed before Board Committee by a member against an order of Management Committee imposing penalty.

TOP COMPANIES AWARDS DISTRIBUTION CEREMONY AT AIWAN-E-SADR

2011-05-25T13:01:00.004+05:00

President Asif Ali Zardari has called upon the private sector of the country to take full advantage of the level playing field provided to it by the present Government through financial and structural reforms.

During awards distribution ceremony among the top ranking companies and business entities for the year 2008 & 2009 held at Aiwan-e-Sadr on Monday, the President said that the success of the winning corporations highlights the opportunities Pakistan offers to business and investment. We have a very conducive investment climate, he said.

According to prepared text of speech, the President said that Pakistan was lagging behind in the manufacturing sector and its share in the global exports was not what it should be. The private sector needs to play a greater role in enhancing manufacturing capacity to serve regional and global markets, he emphasized.

The President said that the stock exchanges also need to extend their outreach throughout the country. This, he said, will increase awareness about the capital market and attract increased equity for investment.

Lauding the key role played by Karachi Stock Exchange in developing Pakistanâ€™s capital markets, the President remarked that the awards were also part of the positive role played by the Karachi Stock Exchange.

The President addressing the gathering said that the present coalition governmentinherited several economic problems. Global economic recession, circular debt, fight against militancy and floods last year have hit the economy hard, he said. He said that according to the Damage and Needs Assessment, the overall damage to Pak economy due to floods, was nearly 10 billion dollars. The Government has embarked upon a comprehensive plan, to address the economic challenges, he said. This includes reduction in non-development expenditure to cut expenses, Reforms in power sector, Restructuring of public sector enterprises, Giving incentives to attract remittances and Special programs for poverty alleviation. The President said that the Government reduced the cabinet size in order to cut expenses. The subsidy regime has been rationalized. Tax reforms have been introduced, to mobilize resources and the tax net was being expanded, through introduction of the Reformed General Sales Tax, he said.

The President said that we are not afraid to take tough decisions. Our main objectives, he emphasized, are to alleviate poverty and to create more job opportunities.

The President said that we have developed a home grown program for poverty alleviation under the Benazir Income Support Program (BISP). It has been acknowledged and appreciated worldwide as a credible instrument for alleviating poverty, he said. The President said that BISP has made remarkable progress by providing relief to over 4 million poor families. These also include the IDPs, flood affectees and bomb blast victims throughout Pakistan. More than 70 billion rupees have been disbursed to BISP beneficiaries, he said.

The President said that unanimous approval of BISP Act 2010 by both the houses in August last demonstrates the confidence reposed in the transparency, integrity and efficacy of BISP. The Program is now the leading social safety net authority in the country, he said.

The President said that the first ever nation-wide poverty survey was started from October 2010 in all districts of the country. The survey is expected to be completed by end of June. He said that more than 60% of the country has been surveyed. Survey in Gilgit-Baltistan and AJK has been completed while it the Pukhtoonkhwah it will soon be completed.

He said that Mobile Phone Banking has been introduced for the first time for transparent transfer of BISP benefits to the poorest of the poor. This, he said, would further eliminate any human involvement in disbursement of cash to the deserving.

Another innovation, the President said, was the use of Benazir Smart Card for payments to beneficiaries and so far over 172,000 cards have been distributed and over one billion rupees disbursed to beneficiaries through the smart cards.

The President said BISP has also launched a program for soft loans up to Rs. 300,000 for setting up of small businesses to beneficiary families. Every month a ceremony is held to select beneficiaries through a draw. 17 draws have been held to date and almost Rs. 50 million have been disbursed.

The President said that under the program technical and vocational training is also provided to one member of each beneficiary family to help them stand on their own feet. In one year, he continued, 150,000 persons will be imparted training in over 60 fields. The initiative is already underway in Karak and Bannu, he said.

The President also said that life insurance cover of Rs. 100,000 has been provided to the bread winners of every beneficiary family and Health insurance for all beneficiary families is also being launched shortly as pilot on test basis.

The President said that the Government has adopted the model of public private partnership for the economic development. He said that the first step towardsprivatization was taken under Mohtarma Benazir Bhutto Shaheedâ€™s PPP government. This was the privatization of PTCL through listing on local and foreign stock exchanges in early 1990â€™s. This policy has been followed by successive governments, he noted.

The President said that government is committed to growth. He said that the Government believes in developing policies, including economic policies through national consensus. The President called upon the business community to develop a national consensus on all major economic issues. He appreciated the initiative taken by the Pakistan Business Forum and wished them success in building national consensus.

The President, on this occasion, also urged the corporate sector to also focus on workersâ€™ education and training to enhance productivity. It is important, he said, to develop a large pool of human resources possessing the needed skills and training that is the demand of a modern economy and global market place.

Welcoming the suggestions related to the need for structural reforms in the capital markets, The President assured that the Government will give high priority to all such suggestions.

PC BOARD FORMS NEGOTIATION COMMITTEES FOR APPOINTMENT OF FAC & LEGAL COUNSEL FOR OGDCL EXCHANGEABLE BONDS

2011-05-10T16:07:00.002+05:00

The Privatisation Commission (PC) Board, which met under the chairmanship of Mr. Ghous Bux Khan Mahar Federal Minister for Privatisation here today, constituted two negotiation Committees for the appointment of Financial Advisory Consortia (FAC) and issuer’s Legal Counsel for the Exchangeable Bonds of Oil & Gas Development Company Limited (OGDCL).

The PC board was informed that the recommendations of the Pre-Qualification Committee (PQC) constituted by the PC Board, jointly administered by the Privatisation Commission (PC) and the Finance Division including members from SECP, M/o PNR, OGDCL, headed by a PC board member, which has evaluated the RFP package during a presentations session by the interested parties (IPs) and evaluated the Technical and Financial Bids of the interested parties and pre-qualified two parties i.e. Citibank, JP Morgan, Credit Suisse, and BMA 2. Barclays Bank, Standard Chartered Bank, Merrill Lynch/ Bank of America, and KASB, and ranked Citibank, JP Morgan, Credit Suisse, and BMA Consortia on top.

The PC board authorized a six member Committee to negotiate with the top ranking consortia and inform PC Board about the outcome for proceeding further with the hiring process for the appointment of Financial Advisory Consortia for the issuance of Oil & Gas Development Company Limited (OGDCL)’s Exchangeable Bonds by monetizing up to 10 % of Government of Pakistan (GoP) shareholding (up to 430,000,000 shares) in OGDCL (Transactions). The Committee includes the representatives of Finance Division, State Bank of Pakistan among its members.

The PC Board also constituted another Committee to negotiate with Bhandari Naqvi & Riaz and Freshfields Bruckhaus Deringer LLP for appointment of Issuer’s Legal Counsel for OGDCL Exchangeable Bonds.

Earlier, addressing the PC Board Mr. Ghous Bux Khan Mahar Federal Minister for Privatisation directed the PC officials to strictly to adhere to the rules while processing Transactions and ensure utmost transparency at every step.

While reviewing implementation status of the decisions taken during the previous Board meeting, the PC board was informed that Expressions of Interest (EOI) have been invited from the interested parties for the divestment of 88 % of GoP shares in Heavy Electrical Complex (HEC) and that the National Power Construction Company (NPCC) transaction was being progressed on fast track basis to be completed within the given timeframe of four months. The appointment of Lead Manager for divestment of Pakistan Petroleum Limited (PPL) shares through Secondary Public Offering (SPO) was also under process by the Transaction Committee, the Board was informed.

The PC Board formulated certain recommendations for Cabinet Committee On Privatisation (CCOP) and reviewed the status and progress of various ongoing and upcoming transactions. The Secretary Privatisation Commission Mr. Imtiaz Hussain Kazi conducted proceeding of the meeting while senior officials of Finance, Petroleum & Natural Resources Divisions, OGDCL and Privatisation Commission attended.

SECP’s eServices project wins international award

2011-05-01T21:44:00.000+05:00

The International Data Group, world's leading technology media, events and research company, has declared the eServices project of the Securities and Exchange Commission of Pakistan a winner of its Laureate Gold Medal. This annual award programme honours visionary applications of IT in promoting positive social, economic and educational change. It was especially competitive this year because it received over 1,000 nominations.

The SECP eServices system is accessible from anywhere in the world via definite login ID with digital signature. It has enormously facilitated the corporate sector, practitioners, consultants and the public at large. Through this system they can apply for various online SECP services and e-filing of statutory returns. It enables promoters and other officers of the companies to interact online using the eServices portal, without visiting the SECP offices. The system offers numerous benefits to the business and corporate sector as it provides the investor transparent, efficient and cutting-edge environment.

Meanwhile, the Pakistan Computer Society and the Pakistan Information Security Association have decided to award special mementos to the eServices project team.

Arshad Javed Minhas, executive director, IS&T Division, called it a great moment to cherish for all of us at the SECP, especially the IT professionals at the IS&T Division who have developed such a high class system that has earned this meritorious international award for the SECP as well as for the country.

He added that this award was a significant indicator of the SECP’s commitment to providing healthy environment to the investors for the growth of Pakistani economy by implementing efficient automated systems that ensure transparency and accountability.

SECP takes actions against 7 companies

2011-03-08T19:55:00.002+05:00

The Securities Markets Division of the Securities and Exchange Commission of Pakistan took action against seven non-compliant market participants in February. Warning letters were issued to three brokerage houses of the Karachi Stock Exchange for indulging in trading activities, which were in conflict with fair market practices.

In another instance, a show cause notice was issued to a listed company for failing to implement the SECP orders. Moreover, warning letters were issued to the three directors of different listed companies for late filing of returns of beneficial ownership.

In an effort to strengthen the regulatory framework of capital markets, the SECP accorded its approval to a number of amendments to the regulations of three stock exchanges, Clearing Company and Depository Company. This includes provisions pertaining to the introduction of new products, i.e., Margin Financing, Margin Trading and Securities Lending and Borrowing.

In addition, approval was granted to Engro Fertilizers Limited to increase the number of options/shares to be issued/granted in pursuance to the Employees Sock Options Scheme under Section 86 of the 1984 Companies Ordinance read with the 2001 Public Companies (Employee Stock Options Scheme) Rules.

Moreover, during the month of February, 12 investors’ complaints were resolved by the SECP.

bearish activity at Karachi Stock Market on rising political uncertainty

2011-03-08T19:46:00.002+05:00

First trading day at the Karachi Stock market was marked by prevalence of bearish activity on rising political uncertainty after government coalition partner MQM decided to boycott sessions of National & Sindh Assembly.

Analysts said in their comments that range bound activities dominated market proceedings with index failing to maintain 12,000 pts level during the session.

The Karachi Stock Exchange (KSE) 100-share index shed 25.48 pts or 0.21 percent closing at 11, 974.55 pts compared to 12,000.03 pts in the previous session. The KSE -30 index also shed 26.26 pts closing at 11,690.41 compared to 11,716.67 pts of the previous session. KMI-30 index shed 78.18 pts and closed at 19,813.83 pts compared o 19,892.01 of the previous session. The KSE- all shares index closed with a loss of 17.97 pts closing at 8,311.52 compared to 8,329.49 pts of the previous session.

The market turnover went down by 37.62 percent and traded 116.94 million shares compared to 187.49 million shares of the previous session. The market capital went down by 0.21 percent and traded Rs 3.226 trillion compared to Rs 3.233 trillion traded in the previous session. Losers beat gainers 162 to 121 margin while 85 stocks remained unchanged.

“Bearish activity witnessed in overbought market on rising political uncertainty after government coalition partner MQM decides to quit and boycott sessions of National & Sindh Assembly,” said Ahsan Mehanti, Director Arif Habib Investment Ltd. Fall in global capital markets on unrest in Libya & Middle east, concerns for rising circular debt in Pakistan energy sector played a catalyst role in negative activity in the earnings announcement session despite rising global commodity prices, renewed foreign interest in blue chip scrips, brent crude over $118.

Husnein Asghar Ali, analyst at Aziz Fida Husein and Co. said the local bourse was indeed a ‘tug of war” amongst the local financial groups, some supported bulls, on likely availability of leverage and its positive impact on valuation of various main board stocks, along with anticipation of inflow through off-shore channels while others, those included financial institutions, surfaced as major sellers as they thoroughly capitalised on the recent rise in political temperatures, along with alarming economic and financial issues, likely repercussion of the cold diplomatic ties with US, and that off worsening situation in Arab countries.

Initial gains soon came under pressure due to massive sell-off in high priced stocks, already struggling to sustain the attained levels mainly due to absence of follow-up supported, decline in dividend yielding, and various mid-tier stocks was however capitalised by the liquid participants, thus offering some respite to the melting benchmark, that under went a volatility of 256 points, thus providing various short term trading opportunities, low volumes however depicted absence of wider participation.

Lotte Pakistan PTA was the volume leader in the share market with 17.76 million shares as it closed at Rs 15.57 after opening at Rs 15.98 shedding 41 paisas. Fauji Fert Bin Qasim traded 10.30 million shares as it closed at Rs. 43.11 after opening at Rs 42.69 gaining 42 paisas. JS Bank Ltd. traded 6.97 million shares as it closed at Rs 3.10 after opening at Rs.3.03 gaining 07 paisas. NBP traded 6.32 million shares as it closed at Rs 79.16 after opening at Rs 80.57 shedding Rs 1.41. (Daily Times)

SECP Promulgates Securities (Leveraged Markets and Pledging) Rules, 2011

2011-02-18T23:35:00.008+05:00

ISLAMABAD- February 18: The federal government has accorded its approval for promulgation of the Securities (Leveraged Markets and Pledging) Rules, 2011, which have been notified by the Securities and Exchange Commission of Pakistan (SECP) in the official gazette.

While realizing the significance of liquidity in trading for a vibrant stock market, last year the SECP had drafted these rules after detailed consultations with the relevant stakeholders including the State Bank of Pakistan, Mutual Funds Association of Pakistan, Pakistan Banks Association, Leasing Association of Pakistan, Modaraba Association of Pakistan, the three stock exchanges, the National Clearing Company and the Central Depository Company of Pakistan Limited.

The rules have been developed considering best international practices and provide a regulatory framework for Margin Financing, Margin Trading, Securities Lending and Borrowing and Pledging of clients’ securities. The promulgation of these rules is not only expected to introduce effective disclosure requirements to ensure greater transparency but also to cater for the financing needs of capital markets while providing retail investors with an easy access to financing against shares and an automated mechanism for securities lending and borrowing. This in turn is expected to assist in escalating trading activity at the stock exchanges, provide depth to the market and facilitate overall growth and development of the capital markets.

Securities Exchange Commission fines 29 defaulting companies

2011-02-08T16:21:00.003+05:00

ISLAMABAD, February 8: As part of its enforcement and regulatory function, the Enforcement Department of the Securities and Exchange Commission of Pakistan passed 29 orders, fining defaulting listed and unlisted companies.

In order to safeguard the interest of investors and stakeholders and to develop corporate governance culture in the country, the SECP took action against non-compliant companies by issuing 38 show-cause notices for non-compliance with various provisions of the 1984 Companies Ordinance. In addition, proceedings against four companies were closed with warnings. The department imposed penalties worth Rs1.969 million on listed and unlisted companies under the provisions of 1984 Companies Ordinance.

Sixty-two investors’ complaints were also resolved during the month.

Experienced professionals chosen: SECP nominates directors of KSE

2011-01-26T12:57:00.008+05:00

The Securities and Exchange Commission of Pakistan (SECP) has nominated high profiled and experienced professionals from the financial market as directors on the Board of Karachi Stock Exchange (KSE) for the year 2011.

The names announced include Mr. Muneer Kamal - Vice Chairman, KASB Bank Limited; Mr. Shazad G. Dada - Chief Executive Officer, Barclays Bank PLC, Pakistan; Mr. Asif Qadir - President and CEO Engro Polymer & Chemicals Limited; and Mr. Abdul Qadir Memon –President, Pakistan Tax Bar Association.

The nominated individuals can be seen as a fair balance of the requisite qualification and skills on the KSE Board, with two of them having national and international banking and capital markets experience; one pos

sessing corporate sector (management and marketing) exposure; and one carrying account

ing, audit,

corporate law and tax expertise.

Mr. Muneer Kamal - has over 28 years of extensive experience of the banking and financial sector. Starting off at Citibank where he served locally and internationally on various senior positions including his terms as Director, Head of Country Public Sector & Financial Institutions, he then joined Faysal Bank and was President and

CEO of the Bank. He also held positions of President and Chief Executive Officer, Vice Chairman and Chief Operating Officer (International) of the Union Bank Limited,

prior to serving as President and Chief Executive Officer of the KASB Bank Limited. Mr. Kamal, an MBA from the University of Karachi, had been instrumental in various acquisitions done by Union Bank Limited, i.e. Bank of America, American Express Credit Cards, Emirates Bank International and Mashreq Bank, Sri Lanka. Mr. Kamal has also served on the Executive Committee of the Pakistan Banks’ Association for the years 2007 and 2009.

Mr. Shazad G. Dada - a seasoned banker and a prominent capital market professional. His portfolio includes over 20 years of major national and international financial market experience. Being the CEO of the Barclays Bank, he is presently overseeing all Barclays’ businesses in Pakistan. He worked extensively on mergers and acquisitions during his appointment as the Managing Director ofMergers, Acquisitions and Corporate Advisory group at Deutsche Bank Securities Inc. in New York and head of the Media M&A practice in the Americas. While serving as the Chief Country Officer and Head of Global Banking of the Deutsche Bank AG, Pakistan, he was also involved in the KSE’s valuation exercise carried out by

the Bank in 2007 as part of the KSE’s Corporatization and Demutualization exercise. A graduate from University of Pennsylvania he also has an MBA degree from The Wharton School, University of Pennsylvania. He has been contributing towards the development of the Pakistani financial market and continues to do so as the Vice-Chairman of the Pakistan Banks' Association.

Mr. Asif Qadir has over 30 years of management and marketing experience of the chemical and fertilizer sector. He started his career at Exxon Chemical Pakistan Limited and went on to become one of the key management figures of the chemical giant Engro Corporation Limited. Currently, he is serving as the Senior Vice President of the Corporation in addition to serving on the Boards of various subsidiaries and affiliates of the Corporation. Mr. Qadir holds a degree in Chemical Engineering from Columbia University, New York, and has served as the President of the Management Association of Pakistan from 2007-2009, and on the Executive Committee of the Overseas Investors Chamber of Commerce & Industry from 2006-2009.

Mr. Abdul Qadir Memon - Fellow of the Institute of Taxation Management Pakistan and a Commerce graduate from the University of Karachi, is a renowned tax and corporate laws expert and a senior resource. Mr. Memon is a member of the Advisory Taxation Committees of the Revenue Advisory Council of Ministry of Finance, Pakistan, the Federal Tax Ombudsman and the Federal Board of Revenue’s Task Force on Simplification of Tax Laws and Procedures. He has served as the President and Senior Vice President of the All Pakistan Tax Bar Association and has also held the positions of Vice President, Secretary General and President of the Income Tax Bar Association, Karachi. He possesses an in-depth knowledge of the tax and corporate laws and he is providing a wide range of services to his clients including rendering opinions and offering advices on various aspects and implications of the corporate matters and company laws.

It is expected that the KSE Board of Directors, in particular, and the capital markets in general, will greatly benefit from the mix of extensive knowledge, global experience and diverse expertise the above professionals will be offering, and that the said individuals will be contributing positively towards promoting principles of good governance and transparency.

KSE 100 index falls psychological level of 12,500 points

2011-01-21T15:09:00.002+05:00

The bear-run entered third day on Thursday, with the KSE 100-share index falling under the psychological level of 12,500 points, owing to profit-booking by the investors in the scrips of the blue chip companies across the board.

Limited foreign interest, concerns over rising fiscal deficit affected the investor sentiment despite value buying of selected scrips on expectation of strong earnings announcements

The Karachi Stock Exchange's benchmark 100-share index closed at 12,411.81 points after losing 165.74 points. The index had ended at 12,577.61 on Wednesday.

According to daily market statistics, volumes shrunk to 183.61 million shares from 188 million shares traded previously. KSE market capitalization amounted to Rs3, 358.14 billion or $39.18 billion. Total ready market value was recorded at Rs7.57 billion or $88.34 million.

The market data showed that KSE 30-index closed at 12,115.84 with massive decline of 210 points or 1.70 per cent. KSE future volume came at 11.67 million while future value was at Rs1, 477.78 million, showing a spread of 5.21 per cent.

According to market expert, low volume price erosion forced substantial decline in stock values. Corporate support in specific stocks besides restricting the losses in the benchmark to 1.7 per cent, technical recovery provided volumetric trading opportunities, mainly the stocks those witnessed maximum decline during intraday trade.

Expert said that gloomy economic, financial and political horizon and absence of update on leverage yet again kept the investors in search of bottom, which stayed away from the sight in case the process of leverage introduction faces delay.

This sentiment kept the sellers cued-up at market rates, fearing roll-over pressure and post result sell-off next week in case main board stocks fail to match over optimistic payout expectation of the investors , and then likely increase in interest rate in policy review in last week of running month have left no cue for positive activity, other then technical pull back, wherein the market men will target off-loading in various comparatively illiquid speculative stocks, unable to invite buyers during bear-run.

SECP takes Eastern Capital Limited to court, warrants issued

2011-01-12T23:11:00.003+05:00

ISLAMABAD – January 12: The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in a court against Eastern Capital Limited, ex-member of the Karachi Stock Exchange (KSE) and all those, including its director, involved in non-transfer of shares/funds and unauthorized pledges of client’s shares and other prohibited activities under Section 24(2) of the Central Depositories Act 1997 as well as offences under relevant provisions of the Pakistan Penal Code (PPC). The warrants for all the accused have been issued.

The SECP received numerous complaints/claims against five KSE brokers mainly pertaining to the alleged non-transfer of shares and non-payment of funds. The SECP directed the brokers to expedite resolution of complaints/claims and issued instructions for the immediate transfer of shares/funds to the claimants. The brokers failed to remedy the situation, obliging the SECP to suspend registration of Eastern Capital Limited and four other brokers.

Moreover, the SECP initiated enquiries against five brokers and appointed enquiry committees comprising officers from the SECP, KSE and CDC.

It emerged that the shares of the clients which were in control of Eastern Capital Limited for trading purposes only were moved, pledged and transferred to other accounts, without any authorization. . The shares were pledged with banks to obtain financing which were mostly used to liquidate liabilities of the brokerage house resulting in total loss to the investors.

Consequently, the SECP filed a criminal complaint in the court of Session Judge Karachi South against the Eastern Capital Limited and others. This is the third criminal complaint against the brokerage houses involved in illegal pledging of shares. The earlier two criminal complaints were filed against Capital One Equities Limited and Cliktrade Limited.

The SECP has also moved a reference under Section 18(b)(i) of the NAB Ordinance, 1999 with a request to investigate the affairs of Capital One Equities Limited and Cliktrade Limited to punish the culprits who have cheated innocent investors and to recover the investors’ savings which have been misappropriated/transferred for the personal benefits of the sponsors, directors and their associated concerns.

In addition, the SECP took steps to curb such market abuse by improving regulatory framework to facilitate the market participants. In this connection the SECP has recently approved a project of “Automation of Securities Settlement” which has jointly been implemented by NCCPL and CDC to facilitate the market participants to automate the mechanism for settlement of book-entry securities by eliminating the need for any manual intervention. The new system not only improves efficiency but also help in preventing mishandling of book entry securities of clients.

The copies of enquiry report on Eastern Capital Limited and criminal complaint are available on the SECP website. The SECP has also finalized the enquiry reports on the other two expelled KSE members and legal action is being taken against all those who were involved in prohibited practices.

KSE 100 index gains 182 points: hopes of leverage products approval

2011-01-07T17:35:00.003+05:00

The Karachi stock market closed at more than a 30-month high Thursday on strong valuations in the scrips of oil and gas and fertilizer sectors across the board, ahead of earnings announcement session.

Bullish sentiments continued to hit retail and institutional investors in an anticipation of early approval of leverage products by the Security and Exchange Commission of Pakistan.

The Karachi Stock Exchange’s benchmark 100-share index ended 1.50 percent, or 182.63 points, up at 12,323.47, its highest close since June 2008. The index had closed at 12,140.84 on Wednesday.

Volumes stood at 144.29 million shares against 168.22 million shares of Wednesday. Market capitalization amounted to Rs3, 336.28 billion or $38.89 billion. Ready market value accounted for Rs7.91 billion or $92.17 million.

The KSE 30-index surged by 1.46 per cent or 171.15 points to close at the level of 11,888.43. KSE future volume came at 7.83 million shares while value stood at Rs1, 189.35 million with 1.12 per cent future spread.

According to a market report, the local participants despite positive sentiments, stayed cautious, as depicted by declining trend in the turnover, nevertheless oil heavy weights made sure that the benchmark continues the trend of testing new highs of recent times.

The leading stocks for oil and gas exploration stocks reinvited aggressive influx that not only pulled the bazaar from going into stagnation, massive rate appreciation gave the daring day traders ample trading opportunity, although the momentum did carry a color of speculative activity, various rumors regarding discoveries and high off-shore influx did allow the stocks to trade at new highs of recent times.

Weighing the pros and cons of the likelihood of rollback of the fuel price increase, its tough financial implications on fiscal if the price hike is undone, and political repercussions if the decision of rollback is not executed, kept the local participants in a confused mode, adding to the uncertainty and nervousness was the objection raised by senate committee on the appointment of the new Security and Exchange Commission of Pakistan Chairman, thus restricting the investment horizon, despite aggressive support by the index heavy weights. (Nation)

SECP, KSE resolve outstanding issues amicably

2011-01-03T23:43:00.004+05:00

A meeting of the Securities and Exchange Commission of Pakistan headed by the SECP chairman with member directors of the outgoing board of the Karachi Stock Exchange and newly elected directors was held here on Friday.

The meeting resolved various outstanding issues amicably. Regarding the matter of chairman of the board of the exchange, the SECP chairman emphasized that for good corporate governance and in line with international best practices, the chairman of the board would continue to be from among the non-member directors.

The SECP approved the appointment of acting managing director for an interim period and reiterated the need for an early completion of transparent process for the appointment of a permanent managing director at the exchange. It was agreed by the KSE board members that the functions of internal audit and market surveillance at the exchange would remain in place. Further, the board members assured their cooperation and commitment in managing the affairs of the exchange in the best interest of the market and to promote transparency and integrity.

The SECP chairman reassured the participants that the apex regulator would continue to work in close coordination with the exchanges and play a facilitating role for the development of capital markets and enhancing investors’ confidence.

KSE sails thru turbulent waters comfortably

2011-01-01T14:08:00.003+05:00

By Tanveer Ahmed

KARACHI: Overcoming all the odds at the political and economic fronts, country’s capital market managed to sail through the turbulent water comfortably by posting 28 percent returns in the calendar year 2010.

Starting the journey below 10,000 psychological barrier at 9386 at the beginning of the year, benchmark KSE-100 index settled well above 12022 points level on the last trading day of the year on Friday.

A market experiencing low trading volume was exceptionally good when it came to returns by registering 28 percent gains and 26 percent in dollar terms, which owed to flooding of the foreign money in the market especially during the last quarter of the year.

“Strong foreign inflows and recovery in corporate earnings led to a strong market performance in the final quarter with the index witnessing more than 71% of the gains in last three months of the year,” analyst Umar Bin Ayaz at JS Global Research said.

Foreigners remained active in the market with net buying of $515.5 million during the CY10 as compared to $33 million during the last year.

The phenomenal performance by the market shines further when compared with peers as Asian and other markets are concerned KSE-100 has given a 27% return as compared to US, China, India, Japan, Singapore and Taiwan.

The strong corporate earnings coupled with foreign portfolio investment played their part in pushing the market to regain its lost glory, however the low trading volumes took some steam out of the ship which, otherwise could have been trading even further high compared to level at the end of the year.

KSE-100 Volume declined by 32% to average 116mn shares as compared to 171mn shares during the same period last year.

Stock analysts and pundits are unison when its come to their comments on the performance of the market and all have, more or less have the common view that the performance was due continuous foreign portfolio investment, rising commodity prices in the international markets and improved economic numbers including all-time high foreign exchange reserves during the year.

Devastating floods and imposition of capital gains tax (CGT), though have dampening affect on the stock business, however market absorbed these shocks well in short of span of time when foreign gave a “big entry” in the market, helping it to break successive barriers and finally closing at 12,000 points level just one day before the close of the year.

In view of the outstanding performance of the market in the outgoing year, the market players and analysts’ spirit is high about the future course of the stock business as they are now eyeing 14,000 points level in the year 2011, which they believed would not be difficult if the strong interest of foreign investors coupled with healthy corporate earnings remained intact in the days to come.

The government can play its part in helping the market to move further high, stock brokers said as the absence of leverage product has kept the local investors on the sidelines and an early launching of leverage product in the market would also pull the locals in the market along with the foreign investors, who are already roaming the market.(DT)

KSE 100 index gains 145 points, crossed 12000 level

2010-12-31T11:13:00.004+05:00

The Karachi stock market crossed the psychological level of 12,000 points on Thursday on support from foreign interest in blue chips.

Foreign interest was witnessed in oil and gas, bank and fertilizer scrips.

The Karachi Stock Exchange (KSE) 100-share index gained 145.44 points or 1.22 percent to close at 12,031.46 points as compared to 11,886.02 points of the previous session. The KSE 30-share index also rose 141.70 points to close at 11,588.97 points as compared with 11,447.27 points.

“Bullish activity was witnessed in scrips across-the-board on strong foreign interest in oil and gas, bank and fertilizer scrips,” said Arif Habib Investment Ltd Director Ahsan Mehanti. “Higher banking sector spreads, international oil prices over $91 and expectations of strong result announcements played a catalyst role in the positive activity at KSE despite concerns over rising political uncertainty.”

The market turnover went up by 40.33 percent to 140.04 million shares after opening at 99.79 million shares. The overall market capitalisation went up by 1.20 percent and closed at Rs 3.270 trillion as against Rs 3.231 trillion. Gainers beat losers 234 to 146, while 20 stocks were unchanged.

“Across-the-board activity both through local and offshore channels allowed the benchmark to attain yet another milestone of 12,000 points level,” said Aziz Fida Husein and Co analyst Husnein Asghar Ali. “Blue chips, mainly banks and oil did displayed strength, while volumes failed to match the pace.”

Short-term traders however did participate in the rally.

Various news-flows suggesting mergers and acquisitions in the banking sector, latest being interest shown by China in acquiring a large cap bank, and anticipation of stock and cash dividends by leading banking stocks despite apprehensions of lower-than-expected earning in the last quarter results, kept the banking stocks on gaining grounds.

The KMI 30 surged 237.35 points and closed at 19,098.32 points after opening at 18,860.47 points. The KSE all-share index closed with a rise of 98.38 points to 8,362.85 points.

Lotte Pakistan PTA was the volume leader with 17.27 million shares as it closed at Rs 13.75 after opening at Rs 13.19, gaining 56 paisas. NBP traded 11.19 million shares as it closed at Rs 75.92 from its opening at Rs 73.88, rising Rs 2.04. United Bank Ltd traded 7.38 million shares as it closed at Rs 68.02 as compared to its opening at Rs 68.19, shedding 17 paisas. NIB Bank traded 7.09 million shares as it closed at Rs 3.08 as against its opening at Rs 2.78, surging 30 paisas. (DT)

Arif Habib, Muhammad Sohail, Zafar Moti, Ashraf Bawa, and Qasim Lakhani elect as directors for KSE board 2011

2010-12-31T11:07:00.003+05:00

KARACHI: Members of Karachi Stock Exchange (KSE) on Wednesday elected five member-directors on board. Accordingly, Arif Habib, Muhammad Sohail, Zafar Moti, Ashraf Bawa, and Qasim Lakhani were the top five vote gainers and declared elected member-directors on board for the next one-year term.

SECP and the China Securities Regulatory Commission sign MOU

2010-12-18T23:51:00.003+05:00

ISLAMABAD, December 18: The Securities and Exchange Commission of

Pakistan (SECP) and the China Securities Regulatory Commission (CSRC)

have signed a memorandum of understanding (MOU) to further enhance

regulatory cooperation and information sharing between the two

regulatory agencies.

The MOU was signed in the backdrop of evolving globally integrated

financial markets, necessitating for regulatory agencies of capital

markets to develop cooperative linkages to ensure information sharing

for enforcement of securities laws and facilitate detection and combat

cross-border violations. The SECP has been promoting bilateral

co-operation with counterpart regulatory authorities of the capital

market at the bilateral, regional and international level. The SECP

has already established co-operative arrangements through MOUs with

the regulatory agencies of India, the Maldives, Australia, Bhutan, Sri

Lanka and Iran.

The MOU was signed in the presence of Prime Ministers Wen Jiabao and

Yousaf Raza Gillani on Friday. Mr Tahir Mahmood, the SECP

Commissioner, signed the MOU on behalf of the SECP while Mr Liu Jian,

the Chinese Ambassador, inked it on behalf of the CSRC.

The MOU provides parameters of co-operation and consultation, seeking

to enforce and ensure compliance with respective laws and regulations

in both countries. The document reiterated the commitment of the

securities regulators to work together in ensuring that securities and

futures markets in Pakistan and China are fair, transparent, efficient

and regulate to world class standards.

“The MOU is aimed at supporting the national economy and minimizing

the risk that is usually involved in financial market transactions,"

Mr Tahir Mahmood said. Describing the MOU as a significant milestone

in the development of the capital markets of Pakistan and China, he

added that "increasingly expanding securities markets today require

cooperation among the regulatory bodies of the capital markets at the

international level for adequate protection of investor rights and the

MOU is a step towards building a strong cooperative arrangement

between the SECP and the CSRC.”

KSE 100-Index gains 113 points before Aashura

2010-12-16T10:38:00.004+05:00

Hectic buying improved values of leading and second tier scrips at Karachi Stock Exchange (KSE) Wednesday as 100 Index climbed by 113.45 points to close at 11,786.09, dealers said. Nadeem Chawla, a dealer at a leading brokerage house said that the market was bullish since morning and at one point of time Index crossed 11,800 level on buying spree. However, some profit taking trimmed values and Index slipped to 11,700 level at the close, he added.

However, the turnover volume was low at 120.129 million shares as 187 scrips advanced while 199 sustained losses and 18 remained unchanged.

The market capitalization was improved by about Rs 28.2 billion to Rs 3,204 trillion. Lotte Pak remained the volume leader with a turnover of 11.192 million shares followed by WorldCall 6.451 million shares, NBP 5.923 million shares, Azgard Nine 5.393 million shares and Jahangir Siddiqui 5.216 million shares.

Lotte Pak closed at 13.17, Engro Corp 194.20, Jahangir Siddiqui 11.59, NBP 70.76 and Pak Oilfields 293.15. Unilever Pak recorded the highest increase of Rs 192.56 to 4455.10 followed by Rafhan Maize which moved up by 69.64 to 2149.649 while Colgate Palm dipped by 40.17 to 880 and Pak Engineering went down by Rs 13.75 to 261.25.

Suspension of Trading: KSE extends suspension of 29 companies

2010-12-15T13:55:00.003+05:00

KARACHI: The Karachi Stock Exchange (KSE) has extended the suspension period of 29 companies for another 60 days (effective from December 14, 2010) on the directives of Security and Exchange Commission of Pakistan (SECP). According to KSE, the action has been taken to protect the interest of trade and public.

They are First Interfund Modaraba, Rashid Textile Mills Ltd, Siftaq international Ltd, Itti Textiles Ltd, Fazal Vegetable Ghee Ltd, Pak Ghee Industries, Sadoon Textiles Mills, Extraction Ltd, Valika Woolen Mills, Medi Glass Ltd, Universal Oil & Vegetable Ghee Mills Ltd, Mineral Grinding Mills, Abson Industries, Hala Spinning Mills, Saif Nadeem Kawasaki Motors, Prudential Stocks Fund, Quality Steel Works, English Leasing, First Dadabhoy Modaraba, Sunshine Cotton Mills, Taxila Engineering, Qayyum Spinning, Hakkim Textile Mills, Suraj Ghee Industries, McDonald Layton & Co, Hallmark Insurance, Ittefaq Insurance Prudential Discount & Guarantee House and Kashmir Polytex Ltd.

Automation of Securities Settlement Project Launched

2010-12-14T00:17:00.001+05:00

ISLAMABAD, December13: In line with its efforts to promote greater reliability, efficiency and transparency in the capital market operations, the Securities and Exchange Commission of Pakistan (SECP) has approved the project of ‘Automation of Securities Settlement’, at the Central Depository Company of Pakistan Limited (CDC), which will be effective on December 20.

The project has been finalised in collaboration with the National Clearing Company of Pakistan Limited (NCCPL) and the three Stock Exchanges. The CDC will automate the mechanism for settlement of book-entry securities at the CDC through straight-through processing solution while eliminating the need for any manual intervention.

The said mechanism will allow securities to be automatically transferred from the respective sellers’ account to the respective buyers’ account instead of being routed through the member’s main account. The new system while establishing a link between the National Clearing and Settlement System and the Central Depository System will not only bring in more efficiency but also assist in preventing misuse of book entry securities to a large extent.

In order to ensure effective implementation of the project the amendments have already been approved by the SECP to the regulatory framework of the CDC and NCCPL along with necessary system developments and mock sessions for the market participants to provide them with hands-on training on the new system.

Salman Taseer is a big player in Colombo share market, says Sri Lankan envoy

2010-12-13T13:11:00.003+05:00

ISLAMABAD: The Sri Lankan high commissioner in Pakistan has revealed that Punjab Governor Salmaan Taseer is a big player in Sri Lankan share market and a significant investor in the Colombo stock exchange.

“If the governor has gone to Sri Lanka, he must have travelled on a private passport otherwise on official or diplomatic passport. He is required to obtain visa from the High Commission before embarking on the journey. At least I am not aware of his visit to Sri Lanka last week,” Sri Lankan High Commissioner Air Chief Marshal (R) Jayalath Weerakkody said in an exclusive chat with The News here at Japanese Embassy on Thursday evening where he turned up to attend the reception for celebrating birthday of Japanese emperor hosted by Japanese Ambassador Chihiro Atsumi. It was a mammoth reception where the guests were served delicious eastern and Japanese cousins.

The high commissioner said Sri Lanka share marker was blooming these days and the business could be transacted by the Punjab governor without travelling to Colombo, but ‘he must have reasons for his undertaking the journey if he has done so’. He said he would check with the authorities concerned whether the governor, who is an important office bearer of the government, had gone to Sri Lanka during these days.

“I am confident that he has not travelled on the official passport of which he is entitled to have as a governor because in that case he is required to seek visa for which no request came to the commission.

“Sri Lanka being a member of the Saarc country has no visa for the nationals of the member countries except those who are official or diplomatic passport holders. Now the agreement has been inked for the relaxation of rules for all type of passports but the directive has to reach the officials concerned,” the high commissioner explained.

He said visiting Sri Lanka from Pakistan was so easy that anybody could make any number of trips of the each other country.

He said a Pakistani national visited Sri Lanka 49 times in less than six months, but when he was on his way to enter the country for 50th time, he was stopped and questioned about the purpose of his so frequent visits to Sri Lanka, but he could not offer satisfactory reply and upon this he was denied 50th entry into Sri Lanka. Some people do visit Sri Lanka for pearls, drugs (medicines), and other small purchases, the ambassador added.

The high commissioner said he had read in the newspaper that the Punjab governor had gone to Dubai, which is the headquarters of political activities, but he was surprised to listen about the governor’s going to Colombo. The United Arab Emirates ambassador, when asked about visit of the Punjab governor to his country, plainly expressed ignorance about any such visit. UAE envoy Ali Saif Sultan al-Awani, when asked about the trip by governor to his country, he too expressed surprise about the reported trip. The reception was attended by several important personalities of the twin cities including senior civil and military officials.

Saudi Ambassador Abdul Aziz Ibrahim bin Saleh al-Ghadeer, who appeared in the reception after about one month absence from the scene of the federal capital, was in pleasant disposition. He declined to offer any comment about the Haj expenditures and arrangements scam. The Saudi ambassador was visibly upset about the ailment of Saudi King and Custodian of the two holy mosques Abdullah bin Abdul Aziz who has been operated upon in the United States twice in recent days.

The Saudi ambassador told this scribe that Pakistan was perhaps only country of that Hujaj had to undergo difficult period in the Kingdom otherwise Saudi authorities did not receive any complaint by any country. Ambassador Abdul Aziz Ibrahim al-Ghadeer said the Saudi royal authorities had been trying their level best to provide maximum comfort to the Haj pilgrims since they were guests of Allah.

The Saudi ambassador and his Iranian counterpart Mashallah Shakari had a long session of whispering inside the residence of the Japanese ambassador.

US Ambassador Cameron Mentor, British High Commissioner Adam McClure Thomson and some European ambassadors were conspicuous with their absence from the heavily attended reception against the backdrop of flood of ‘information’ spread by the WikiLeaks. The US envoy, who is out to change the pattern of his country’s diplomacy, rarely misses such gatherings but he too did not show up.

The French ambassador Daniel Jouanneau Paul Henry was disturbed about the queries being made by the fellow guests with regard to assertions by President Sarkozy on Indian soil last week referring Pakistan for certain frivolous subjects.

The government was represented by four federal ministers as it is defiance of the directive of the Foreign Office for appearing one minister in such diplomatic receptions. Leaders of the Pakistan Muslim League-Nawaz and Quaid attended the reception in large numbers including former foreign minister Mian Khurshid Mahmood Kasuri, Muhammad Ejazul Haq, Raja Zafarul Haq, Sardar Mehtab Ahmad Khan Abbasi, Ahsan Iqbal Chaudhry, Shaikh Rashid Ahmad, Dr Shehzad Wasim, Azad Kashmir President Raja Zulqarnain, former AJK Prime Minister Barrister Sultan Mahmood Chaudhry and former interior minister Aftab Ahmad Khan Sherpao.

Muhammad Saleh Zaafir (The News)

Pakistan Petroleum judged as largest corporate giver for 2008-9

2010-12-08T16:09:00.007+05:00

Pakistan Petroleum Limited (PPL) was selected as the largest corporate giver in the category of total volume of donations for 2008 as well as 2009 at the Pakistan Corporate Philanthropy (PCP) Awards held in Karachi on December 6. The company bagged the award for the fifth and sixth consecutive year in the same category.

MD and CEO Khalid Rahman received the awards from Federal Minister for Finance, Revenue, Economic Affairs and Statistics Dr. Abdul Hafeez Sheikh. The event, hosted by PCP, was attended by leading businessmen, representatives of multinational companies, government and civil society representatives, donors and media.

In his inaugural address, Chairman PCP Dr. Shamsh Kassim Lakha highlighted the organization’s growing role in “professionalizing the process of grant making” and redefining philanthropy not as charity but social asset creation used towards facilitating sustainable development.

SECP published a series of guide booklets under its Investor Education Program

2010-11-25T16:06:00.004+05:00

The Securities and Exchange Commission Pakistan believes that a well-informed investor is a well-protected investor. In order to achieve this objective, the SECP has published a series of guide booklets under its Investor Education Programme (IEP). The IEP is aimed at educating investors to protect themselves, raising public awareness on various available investment options and at reinforcing good corporate governance.

The series of guide booklets broadly aim at giving investors insights into the capital market and its players, rights and responsibilities of investors, key characteristics of various investment products available in the market, role of the SECP as the apex regulator and avenues for redress available to investors in case their rights are infringed.

The guides cover the insurance sector, Modarbas, Voluntary Pension Funds, registration of companies, real estate investments trusts (REITs) and stock market. The SECP hopes that these guides would not only improve the corporate conduct and supplement legal know-how of the investors but would ultimately develop a culture of informed investment decision making in the country.

Guide booklets are available at the SECP head office and its regional offices. They can also be downloaded from the SECP website www.secp.gov.pk where they are available under the link of ‘Investor Education’.

Bashir H. Ali Mohammad elected President of ITMF

2010-10-29T23:54:00.002+05:00

Bashir H. Ali Mohammad, the Chief Executive Office and Chairman of Gul Ahmed Textile Mills Limited, has been unanimously elected as the President of the International Textile Manufacturers Federation (ITMF) for the next two years.

A statement here yesterday said that he became the first Pakistani to be elected to the prestigious post. It said that Bashir H. Ali Mohammad assumed his post at the ITMF’s Annual Conference in Sao Paulo, Brazil, held earlier this month.

Speaking on the occasion, Bashir said that it is matter of pride and joy for Pakistan and for the hardworking members of the Pakistani textile sector that one of their own has been elected to this position. He hoped to fulfill his duties to the fullest of his abilities and also to bring better international spotlight on Pakistan’s credentials as one of the best destinations for quality textile products.

SECP DISAPPROVES MOVE BY MEMBERS FOR RESTRUCTURING OF THE KSE BOARD

2010-09-02T13:00:00.002+05:00

The Securities and Exchange Commission of Pakistan (SECP) has noted with concern recent news in the print and electronic media regarding campaign by members of the Karachi Stock Exchange (KSE) against a non-member director as chairman of the KSE Board. The SECP explicitly dispels the likelihood of any restructuring in the board of directors of the stock exchanges for reversing the mandatory requirement of the chairman of the board being elected from amongst the non-member directors.

The SECP while continuing with its well-thought out broad based capital market reform agenda aimed at promoting good governance, transparency and efficiency in the capital markets, had earlier in August 2002, successfully reconstituted composition of the board of directors of the stock exchanges, which now consists of five member directors elected by the members, four non-member directors to be appointed by the SECP and the Managing Director of the stock exchange. In December 2005 for ensuring that conflict of interest is avoided in the office of the chairman, the SECP in line with various recommendations made by both local and international experts and based on similar measures adopted by numerous stock exchanges internationally, under Section 34(5) of the Securities and Exchange Ordinance, 1969 framed the “Regulations of the Constitution of the Governing Board of the Karachi Stock Exchange” for ensuring that the chairman of the board of the stock exchanges is necessarily appointed from amongst the non-member directors.

The SECP’s present stance reinforces the structure of the board of the stock exchanges as also envisaged in the post demutualization environment, as the draft Demutualization Law presently awaiting promulgation by the Parliament, also stipulates that after the date of demutualization the Chairman of the board shall always be from amongst those directors who do not represent trading right entitlement certificate holders or their connected persons. The present mutualized structure of the stock exchanges where the members/brokers have the ownership as well as trading rights inherently creates conflict of interest resulting in lack of transparency in the operations of the stock exchanges, which has direct impact on the market and the investors. Therefore, such constitution of the board of directors as presently applicable not only ensures better protection of investors’ rights/ interests but also serves the best interest of the market.

The SECP while strongly opposing the recent move by KSE members reaffirms its commitment towards ensuring that till the time the stock exchanges are demutualized their board of directors should represent a balanced constitution for efficient and impartial decision making which is in the interests of all stakeholders including the investing public at large.

40 companies suspended from stock markets

2010-08-17T21:31:00.002+05:00

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has ordered suspension of trading in the shares of listed companies that are in continual violation/non-compliance of securities market laws, initially for a period of 60 days or till further orders.

The SECP taking cognizance of the fact that such companies not only pose serious threat to the development of a robust capital market but also inhibit investors’ confidence due to lack of transparency, in consultation with the stock exchanges, had earlier initiated a comprehensive exercise for reviewing the status of these listed defunct/non-compliant companies. It was established that such companies while giving the impression of a broad-based Pakistani capital market do not fairly reflect depth in the market and distort functioning of the stock exchanges as true barometers of the economy.

While capital markets play a crucial role in efficiently channelling financial resources to productive uses, such non-compliant companies especially under winding-up or liquidation or not holding annual general meetings for the past three years, by remaining listed/available for trading at the stock exchanges prove detrimental to the investors’ interest. In the majority of cases, such defunct companies attract uninformed investors, depriving them return on their investment and in some cases even the principal amount.

The SECP, therefore, in the best public interest and for the protection of investors, in addition to ordering suspension of trading in the shares of such companies, has also restricted the transfer of shares of such companies in both physical and book-entry form. The orders by the apex regulator entail that for effectual implementation of trading suspensions, any suspension of trading in the shares of a company shall also be accompanied with automatic restrictions on off-market transactions at the stock exchange on which they are suspended.

SECP takes legal action against brokerage firms, issues warning letters

2010-08-05T22:06:00.001+05:00

ISLAMABAD–August 5: In order to strengthen the integrity and soundness of the securities market for the benefit of the investors and other market participants, the Securities and Exchange Commission (SECP) is striving to maintain fair, transparent and efficient markets.

The Securities Market Division of the SECP actively monitors the trading activities of the stock market to check the compliance of prevailing regulatory framework and to investigate potential violations of the securities laws. This is evident from numerous enforcement cases initiated and actions taken during the current year.

Based on the severity of the offence, strict actions have been taken by the SECP as provided under the law. In the seven months of 2010, legal proceedings were initiated in seven different cases for violations of securities laws with special reference to insider trading, short/blank selling, wash trades, erroneous trades and broker misconduct; the orders were issued after conducting hearings and penalties were imposed under the Securities and Exchange Ordinance, 1969 and Brokers and Agents Registration Rules, 2001 to the brokers of the stock exchanges and other market stakeholders.

These orders are available on the SECP website at www.secp.gov.pk/orders.asp. Moreover, in those cases where the offence has been committed due to trading error/operational mistake, strict warnings have been issued to the brokers. The SECP has issued warning letters to 27 brokers of the Karachi Stock Exchange and 7 brokers of Lahore Stock Exchange for possible violations of the blank sales, wash sales, circular trading, cross trades, broker misconduct etc. The warning letters are available on the SECP website at www.secp.gov.pk/warnings.asp. The market participants are encouraged to read these orders/warning letters to develop their understanding and compliance of the regulatory framework.

In the interest of public at large and in view of the large number of investors complaints mainly pertaining to the alleged non-transfer of shares and non-payment of funds, the enquiries have also been initiated under section 21 of the Securities and Exchange Ordinance, 1969 against the four expelled/defaulter brokerage houses of the Karachi Stock Exchange during the first half of 2010.

In recent months the SECP has filed criminal complaints in a court against Capital One Equities Ltd and Cliktrade Ltd, former members of the Karachi Stock Exchange for misappropriation of the clients’ assets including unauthorized pledges of clients’ shares and other prohibited activities under the Section 24 (2) of Central Depositories Act, 1997, as well as offences under relevant provisions of the Pakistan Penal Code.

The SECP is resolved to pursue its agenda for fair market practices, transparency and investor confidence for the growth, development and stability of the capital market.

Asrar Raouf visits KSE

2010-07-09T16:31:00.005+05:00

A senior team of FBR led by Mr. Asrar Raouf, Honorable Member Tax Policy, Federal Board of Revenue, met with representatives of the Karachi Stock Exchange to address issues related to capital gains tax. A consensus was reached on achieving tax payer facilitation to ensure widening of the tax net. Confidence building measures to achieve this include:

1. The committee considered various proposals to avoid hard-ship to tax-payers. A sub-committee comprising members from FBR, and The Karachi Stock Exchange was constituted to consider the same.

2. FBR will establish a separate cell for facilitation of foreign investors at LTU and RTO. This information will be provided to the Stock Exchange.

3. Financing income/markup under securities lending and borrowing regulations, margin financing and any other leverage products as approved by SECP, would be taxed at the rate of 10%, as full and final tax.

4. Gain or loss under day trading and trading in derivative products would be subject to CGT under section 37A of the income tax ordinance.

5. Suggestions of the Exchange with reference to carry forward of capital losses was discussed and shall be given due consideration.

6. All other modalities with respect to computation of CGT were agreed upon.

SECP launches two facilitation schemes for corporate sectors simultaneously

2010-07-01T23:27:00.004+05:00

In order to facilitate the corporate sector, the Securities and Exchange Commission of Pakistan has re-launched the Companies Regularization Scheme (CRS) and Companies Easy Exit Scheme (CEES) simultaneously. Both schemes shall remain operative for a period of three months, from July I to September 30, 2010.

The objective of these initiatives is to provide regularization as well as exit facilities to the defaulter companies at the same time. Now these companies can either get their defaults of non-filing of documents regularized under CRS or avail the exit facility under CEES.

The CRS provides defaulter companies an opportunity to file their overdue statutory returns and annual accounts. It may be mentioned that normally the defaulting companies have to file their overdue returns with usual filing fee plus three time additional fee and also face penal action for late filing of documents. This Amnesty Scheme shall, however, provide the companies to pay less fee and also absolve them of penal action for late submissions.

CRS is applicable on all types of companies other than listed companies. Initially, in July, 2010, the overdue documents can be filed with normal filing fee plus one half of the normal filing fee as additional filing fee. However, fees shall increase, in August, 2010 to normal filing fee plus one time additional filing fee and in September 2010 to normal filing fee plus two times additional filing fee. The facility of filing through eServices shall not be available for returns and documents filed under the CRS which will be filed physically, as series of documents cannot be filed through eServices.

The CEES, on the other hand, allows the companies having no assets or liabilities and not carrying on any business, to avail easy exit facility without undergoing the cumbersome winding up procedure. This scheme is applicable on private and public unlisted companies. The application fees are less in July 2010, while the same shall increase gradually during the remaining period of CEES.

The detailed requirements of both schemes are available in the Circular No. 12 and 13 of 2010, placed on the Commission’s website, http://www.secp.gov.pk/circulars.asp. Special counters have been established for the schemes for facilitation of the corporate sector.

Capital Gains Tax: Q&A

2010-06-09T18:29:00.001+05:00

Mohammed Sohail

Local and foreign investors have raised many questions since the imposition of tax on gains made through share trading. It is so, as this tax has been imposed after a gap of more than three decades. In order to clarify some issues, following is a response to frequently asked queries.

These answers are based on our understating and may change if tax authorities clarify the matter which they hopefully will in next few days.

When will this tax be imposed?

This tax will be imposed from July 1, 2010 on realised capital gains. There is some confusion regarding tax rate mentioned for tax year 2010 which we believe would be clarified as this tax will not be implemented before June 30, 2010.

What is the rate of tax?

For FY11 the gains realised from securities held for less than six months, the rate of annual income tax is 10 per cent and for securities held for more than six months and less than one year the annual tax liability would be 8 per cent of the gained amount. Again there is some ambiguity whether the rate is 7.5 per cent or 8 per cent for a holding period between 6 and 12 months and hopefully this will be clarified soon. No tax for holding of more than 1 year. Following that, 250bps increase in tax rate every year for a holding category below 6 months and 50bps raise each year if realised between 6 and 12 months so that the maximum rate will be 17.5 per cent and 10 per cent, respectively.

Who will pay this tax?

All individuals and companies whether local or foreign will pay this tax. However, banks are already paying capital gains tax (at a much higher rate). Similarly, mutual funds are exempt from it if they distribute 90 per cent of their profits.

What if I have bought shares before July 1, 2010?

According to the understanding reached between stock exchange and Ministry of Finance in Feb 2010 shares bought before July 1, 2010 would not be subject to tax. Thus previous capital losses and capital gains would not be considered. However the Finance Bill is silent on this. Hopefully the exchange will be seeking clarification on this from FBR (Federal Bureau of Revenue).

Are capital gains/losses can be carried forward?

Yes for 6 years. If someone incurs a capital loss in FY11 then it can be carried forward to coming years.

Who will file the return and pay advance tax?

Every investor will pay advance tax and file a tax return. Broker and exchange will not be doing anything in this regard. In case of a foreign investor, the local custodian bank will do it on his behalf.

When will advance tax be paid and at what rate?

The advance tax will be paid by the taxpayer within seven days after the close of each quarter. The rate is 2 per cent for gains realised within 6 months & 1.5 per cent for gains made between 6 and 12 months. Which means, if an investor has made Rs100k through short term trading then he will have to pay Rs2k to tax authority at the end of quarter.

How to calculate the gains or losses?

So far the rules have nothing to say on this. Our understanding is that an investor can do his own calculation to arrive at capital gains or losses. And if tax authorities have any issues they will seek clarification from the investor.

Will tax authority ask me about my source of funds?

This is a very important issue because many investors in Pakistan have not declared their funds properly. Rules, so far, are mute on this which means the tax authority can ask about the source of funds obtained to earn capital gains/losses. The upcoming meeting between FBR and exchange will definitely focus on this issue

Are capital gains adjusted with other income?

The capital gains/losses shall not be set off against the person's income and shall be carried forward to the next year and set off only against the capital gains/losses from shares trading in future.

Will this tax also be levied on derivatives traded at the exchanges?

Again there is some ambiguity which will soon be addressed. Our understanding is that all derivatives like stock futures, etc will be taxable in the same manner as shares.

Are foreigners allowed to adjust currency gain/loss?

No the foreigners are not allowed to adjust the exchange loss or gain while calculating gain or loss. However the exchange will take this matter up with

FBR for more clarification.

Writer is a research analyst at Top Line Securities

(Courtesy: The Financial Daily)

INITIATION OF CRIMINAL PROCEEDINGS AGAINST CAPITAL ONE EQUITIES LTD, EX-MEMBER OF KARACHI STOCK EXCHANGE

2010-05-18T17:20:00.004+05:00

Islamabad, May 17, 2010: The Securities and Exchange Commission of Pakistan (Commission) has filed a criminal complaint in the competent Court of Law against Capital One Equities Limited, ex-member Karachi Stock Exchange (KSE) along with its directors, officers and persons involved in non-transfer of shares/funds and unauthorized pledges of client’s shares and other prohibitive activities under the Section 24(2) of Central Depositories Act, 1997 as well as offences under relevant provisions of Pakistan Penal Code. The Honorable Court vide Order dated May 13, 2010 has issued warrants of all the accused persons.

The Commission received number of investors’ complaints/claims against KSE Brokers during the first half of 2009 mainly pertaining to the alleged non-transfer of shares and non-payment of funds. The Commission directed the Brokers to resolve complaints and to make necessary arrangements for transfer of shares into respective Central Depository Company (CDC) accounts of the complainants. However, despite repeated directions of the Commission, the Brokers failed to take concrete steps to resolve pending investors’ complaints. Resultantly, the Commission, vide its Orders dated June 26, 2009 suspended registration of Capital One Equities Limited along with four other Brokers.

Moreover, the Commission, in exercise of its powers under Section 21 of the Securities and Exchange Ordinance, 1969 initiated enquiries vide Orders dated July 16, 2009 and appointed enquiry committees comprising officers from the Commission, KSE and CDC to enquire into the matters relating to unresolved complaints against the five Brokers.

The scrutiny of copies of record obtained from KSE, CDC and NCCPL and other sources in connection with the enquiry of Capital One Equities Limited has revealed that the Brokerage House without the consent or authority moved/transferred shares of their clients and pledged them with the Bank to obtain financing. The finances so obtained were mostly used for the benefit of selected few for purchase of shares and payments of private/household expenses. The Brokerage House and its directors, managers, officers also abused and misused the powers given to them under CDC sub-accout opening form in moving or pledging the shares of their clients from their respective sub-accounts, resulting in total loss to the clients.

The Brokerage House having illegally pledged shares of its clients, continued the deceptions by providing them false statements including “Clients Securities and Value with Sub-Account”, showing their entire lots of various shares in “Available” status when their respective sub-accounts at CDS reflected “NIL” status for the said lots. Subsequently, clients demanded transferring of their shares and/or return of their funds to their respective accounts, however, the Brokerage House kept them on false hopes which have been followed by actions of the Commission and KSE.

On the basis of enquiry report, the Commission decided to file a Criminal Complaint against the persons/entity involved for the violations highlighted in the report. Accordingly, the Commission has filed a criminal complaint on April 5, 2010 in the Honorable Court of Session Judge Karachi South against the Capital One Equities Limited and others. As per past practice, the copies of enquiry report and criminal complaint are available on the Commission’s web-site. The Commission has also finalized the enquiry reports in the matter of remaining four expelled members of KSE. Based on these reports, legal action is being initiated under the relevant provisions of the laws against the persons who were involved in prohibitive activities.

To address the issue of unauthorized movement of client shares and for safeguarding the interests of investors, the Commission in coordination with the relevant stakeholders introduced a “standardized sub-account opening form” at the CDC and imposed prohibition on all general purpose/ blanket authorities for handling book-entry securities of clients by the broker to curb misuse of investors’ shares.

Furthermore, effective October1, 2009 “client level margin system” has been implemented at the exchanges’ level which ensures that all margin requirements against each client are fulfilled only from the respective client’s account and discourages co-mingling of clients’ assets with brokers’ assets. Also, in order to prevent misuse of book entry securities at the CDC, the Commission in consultation with the stakeholders is in the process of introducing an automated settlement mechanism whereby securities would move directly from sellers sub-account to buyers sub-account. This mechanism is expected to be in place by end of July 2010 after its consolidated test run.

The Commission reiterates its commitment to continue providing regulatory framework and taking enforcement actions for the protection of investors, curbing market abuse and preserving capital market integrity.

NBP enters into agreement with Saudi Banks for home remittances

2010-05-17T08:04:00.004+05:00

National Bank of Pakistan has signed deals with two Saudi Banks for home remittances’ delivery to Pakistan. Under the agreement Al-Rajhi Bank, the largest Islamic bank in the world through its Tahweel Al-Rajhi Remittance Centers and Bank Al-Bilad through the Enjaz Remittance centres will send Pakistan bound home remittances to NBP for onward delivery to beneficiaries, according to NBP.
The bank President Syed Ali Raza said on Friday that both these banks are top banks in the remittance business in Saudi Arabia and having remittances arrangements with them is likely to boost remittances to Pakistan.
In a short span, NBP has made major structural changes and has completely revamped NBP’s home remittances set up with the ultimate goal to provide value added, fast, reliable and convenient services to customers. In recent months, remittances delivery has shown remarkable growth despite recent global financial crisis due to strong initiatives taken by the government, NBP said.

Profit taking trims values at KSE

2010-04-24T15:50:00.002+05:00

Profit taking suppressed prices of leading scrips at Karachi Stock Exchange (KSE) yesterday as 100 Index shed 8.12 points to close at 10,607.03 dealers said.
A dealer at a leading brokerage house said that market opened with a bullish note for a short spell but slipped on selling pressure which mounted due to profit taking. The turnover volume was low at 153.863 million shares as 228 scrips advanced while 155 sustained losses and 20 remained unchanged.
The market capitalisation also eroded by Rs 473 million to Rs 3.007 trillion. Lotte Pak was the volume leader with a turnover of 17.415 million shares followed by NIB Bank to 14.933 million shares, TRG Pak 14.095 million shares, Amtex Ltd 8.660 million shares and Maple Leaf Cement 7.922 million shares.

Consensus on 18th Amend boosts sentiment of stocks

2010-04-05T16:52:00.003+05:00

Much-awaited consensus among the political parties over the 18th Constitutional Amendment immediately after, apparently, successful Pak-US Strategic Dialogue boosted up the sentiment of stock trade on the local bourses during the week ending Friday last.
Still some players remained cautious in the wake of ongoing proceedings in the apex courts regarding the implementation of its earlier judgement against the defunct as well as infamous National Reconciliation Ordinance.
Traders opened the week under review on a negative note and the market shed almost a percentile in one go. Apart from other deterrents, the players kept on sidelines due to fact that the State Bank of Pakistan kept the interest rates unchanged in its latest quarterly review.
Political uncertainties emanating from the pressure building up on President Asif Ali Zardari as well as the Government for reopening of the Swiss cases forced some major players to stay out of the wring throughout the week.
Pundits attributed the day one shedding during the week that was, partially to the profit taking by majority of position holders. Renewed interest on part of the foreign fund managers however reversed the sentiment during the second session of the week.
Although the Karachi Stock Exchange’s KSE-100 index failed to surge significantly on Tuesday last, still it set a direction for the rest of the week. Analysts were of the view that the market was tied to the divergent pull. Local players were weird of political as well as security vulnerabilities. On the other hand, the foreign investors remained buying in an aggressive mood. (Nation)

Proposal for buy back of shares not be amended: Securities and Exchange Commission

2010-03-20T17:57:00.002+05:00

The Securities and Exchange Commission of Pakistan (SECP) yesterday said that proposal for buy back of shares shall not be amended. In a statement, SECP has directed the companies listed on Stock Exchanges of Pakistan that proposal for buy back of shares, once approved by the shareholders of the company in a general meeting, shall not be amended.
It further said that the proposal will also not postponed, withdrawn or canceled. In addition to this, listed companies shall be required to issue tender notice for purchase of shares within thirty (30) days after approval of shareholders. It said that such purchase shall be required to be completed within thirty (30) days of the tender notice. The said period shall not be rolled over or extended. This direction is given, keeping in view, the best interest of the shareholders and market at large and will ensure that board of directors of listed companies make prudent and premeditated decision for buy back of shares, it added.

KSE loses 104 points amid row over judges

2010-02-16T22:55:00.002+05:00

The Karachi stock market ended more than 1 percent lower on Monday as a potentially destabilising dispute between the Supreme Court and the president over judicial appointments worried investors. Moreover, expectation of rising confrontation between the leadership of the PPP and the PML-N also affected the market sentiment.
The Karachi Stock Exchange (KSE) benchmark 100-share index, which opened in the red zone with a loss of 78.44 points, ended 1.06 pc, or 104.06 points, lower at 9,701.81. Volume was at a one-month low as 78.86m shares were traded.
The volumes were thin and stood at 132m shares, 40 percent lower than Friday’s volume. The government officials meeting with the IMF personnel, for the release of IMF’s fifth tranche was unable to boost investors’ interest.
Institutional investors’ participation was quite low as political uncertainty forced them to stay in the sidelines. Nevertheless, individuals continued to participate in the market mainly in sideboard stocks like TRG, Askari Bank and Lotte PTA. Some buying interest was only seen in the companies like PSO, HBL, ABL., DGKC and NML which are expected to announce their results in February, for the period ended Dec 31, 2009.
On the other hand, the KSE 30-index closed at 10036.97 with a loss of 137.95 points. The KMI 30-index closed at 14292.74 with a loss of 141.40 points. All shares index closed at 6882.10 with a loss of 74.42 points.
Trading activity was minimal as compared to the last trading session as the ready market volume stood at 131.621m as compared to last trading session’s 221.787m. Future market volume, however, stood at 1.443m shares as compared to 3.079m shares of last trading session.

SECP Appoints Administrator for Innovative Investment Bank Limited

2010-01-31T00:05:00.002+05:00

Securities & Exchange Commission of Pakistan (SECP), in exercise of its powers conferred under sections 282 E & F of the Companies Ordinance, 1984 has superseded the entire Board of Directors of Innovative Investment Bank Limited (IIBL) including its Chairman and appointed Mr. Khalid Sherwani as Administrator with effect from January 28, 2010. Mr. Sherwani as Administrator of IIBL shall exercise all the powers vested in Chief Executive and the Board of Directors to manage the affairs of IIBL.

Mr. Sherwani is a former President of Allied Bank Limited (ABL), United Bank Limited (UBL) and Managing Director of House Building Finance Corporation. Mr. Sherwani, having 39 years of diversified experience at his credit, is ranked amongst the country’s top bankers for his independent professional approach. His major achievement include the recapitalization, functional restructuring and turn around of UBL and ABL. He is expected to put in all reasonable efforts for restructuring of IIBL in the best interest of its stakeholders including depositors.

Uncertainty keeps KSE-100 index away from 10,000

2010-01-24T22:48:00.007+05:00

The Karachi Stock Exchange (KSE), which gained 146.93 points last week, lost 149.07 points this week and closed at 9,774.07 points; failing to achieve 10,000 psychological level despite touching it twice this week amid uncertainty over the implications of the detailed verdict on NRO.
The average turnover remained 207.882 million shares as compared to 157.020 million shares of the previous week; up 50.862 million shares.
On the other hand, the KSE 30-index also lost 188 points and closed at 10285.97 as compared to 202.27 points gain in previous week.
Bears overwhelmed the market for three days while bulls dominated the equity for two days only. The bourse started business on Monday with negative note when KSE 100-index shed around 28 points. On Wednesday and Thursday, market also lost heavily as KSE shed 50, 151 points respectively. Local investors opted for panic selling on Thursday on renewed concerns over judiciary action after NRO detailed judgement. Though, bourse lost almost 50 points on Wednesday on the back of profit-taking phenomenon but intraday KSE crossed five-digit barrier and touched 10,012.14 points.
The news that played a catalyst role in positive activity at KSE included rebound in int'l oil prices near to $78, rise in local DAP prices, limited foreign interest in fertilizer, oil and banking scrips and strong retail interest in second, third tier scrips.
The news that affected the trading activities at KSE were detailed NRO judgement, frail uncertainties regarding capital gains tax, refineries may reject proposed oil pricing formula devised by a committee on oil pricing, BankIslami proposes merger with Emirates Global and last but not the least coming April may see 6pc swell in power tariffs. Moreover, FBR said the revenue target of Rs1380b set for the current fiscal year (FY10) will be achieved; and mutual funds dip 4.4pc MoM also have an impact on the market.

KSE gains 121 points, bullish trend continues

2010-01-16T19:25:00.005+05:00

The Karachi Stock Exchange (KSE) continued the upward march on the last trading day of the week as benchmark-100 index crossed 9,900 points level after a gap of 17 months. The local equity market kicked-off the day in green zone and the trend lasted till the closing. KSE-100 index touched intraday highest level of 9,969 points during the session.
Foreign players remained bullish in energy and banking stocks while local investors also preferred buying ahead of December result announcements on expectation of record results for banks, fertilizer and oil/gas sectors. Stocks ended 121 points above at 9,923 points. Market turnover inched up to 204 million shares while PTCL was witnessed as the volume leader, up Rs0.71/share to close at Rs20.20.

KSE elects Zubyr Soomro as new chairman

2010-01-14T23:44:00.009+05:00

Mr. Zubyr Soomro was elected as Chairman of Karachi Stock Exchange (KSE) for the term commenced from January 01, 2010. The unanimous decision was taken at the first meeting of re-constituted Board of KSE, which was held today.
Mr. Zubyr Soomro is a career banker having worked for 36 years with Citibank
across multiple boundaries, roles and assignments. Mr. Soomro also served as
Chairman & President of United Bank Limited from 1997-2000. He has aproven track record in turning around public-sector organizations. Due to this attribute, among many, he simultaneously has extensive experience in working and dealing with regulators and governments and he is often approached by top financial managers representing the government for his expert advice.

Recently, Mr. Soomro has established a financial services consultancy firm by the name of ‘Hikmah Consulting’ where he is engaged as a ‘Consultant’. Earlier, one re-elected and four newly elected member directors of KSE took charge for the new term along with 4 non-member directors nominated by Securities and Exchange Commission of Pakistan (SECP), while 4 member directors and 4 non-member directors from the previous Board stood retired with effect from December 31, 2009.
The Board of KSE, under its Articles of Association, is composed of 5 elected members of KSE and 4 nonmember directors, nominated by SECP; while KSE’s Managing Director completes the Board as 10th Director, by virtue of his office. Furthermore, the Articles provide that the Chairman of the Board is to be elected from amongst the non-members directors.
The five elected directors of KSE for the new Board are Mr. Abid Ali Habib, Mr. Muhammad Yasin Lakhani, Mr. Dawood Jan Mohammad, Mr. Mohammad Munir Khanani and Mr. Abdul Majeed Adam; whereas, the SECP’s nominated directors on KSE’s Board for the current term are Mr. Zubyr Soomro,
Mr. Farrukh S. Ansari, Mr. Farrukh Viqaruddin Junaidy and Mr.MuhammedFarhan Malik. Mr. Adnan Afridi has been the Managing Director of the Exchange since October 2007.

THK Associates (Private) Limited: Shares Registrar

2010-01-14T13:43:00.005+05:00

THK Associates (Pvt) Limited was formed in 1989. The company is engaged in providing specialized services relating to the corporate sector and in particular acts as share transfer agent for a number of companies.
THK Associates (Pvt) Limited is one of the leading service provider of Share Registrar, Transfer Agent, Balloters for IPO’s and Share Accounting Services and is managed and run by a set of professionals having indepth knowledge and expertise of organizing and managing diversified corporate activities including depository related Share Registrar activities.

THK Associates (Pvt) Limited, previously an associate of KPMG Taseer Hadi & Co., has been restructured in terms of requirements of Clause XL of the Code of Corporate Governance and the shareholding of THK partners has been divested in the year 2004.

Mr. Yunus Dawood, Chief Executive of DYL Motorcycle Limited, a shareholder and Director was appointed as Chairman of the Company in 2008.

Mr. Javed Iqbal, former Chairman and Managing Director of Philips Pakistan Limited, a Shareholder and Director was appointed as Chief Executive Officer of the Company in 2004.

Mr. Shabbir Abid Shaikhali, who has been with THK as a Senior Manger since inception (1989) has been elected as one of the Directors of the company and is the Chief Operating Officer of the Company.

Board Of Directors
Yunus Dawood - Chairman / Director & Chief Executive of DYL Motorcycles Ltd
Javed Iqbal FCMA (UK) - Chief Executive (former Chairman/Managing Director, Philips Pakistan)
Shabbir Abid Shaikali - Chief Operating Officer / Director

Senior Management
Asghar Abbas - Senior Manager Operations
Syed Aqeel Hasan Abdi - Deputy Manager Operations
Muhammad Shokaib Khan - Manager Information Technology
Abdul Hameed - Deputy Manager Operations
Ms. Nighat Sultana - Assistant Manager Corporate
Abdul Jabbar - Assistant Manager Admin /Accounts

KSE shrugs off violence in Karachi

2010-01-13T00:23:00.002+05:00

Positive activity was witnessed at the stock market on Monday as the PPP as well as the MQM decided for joint action against target killing in Karachi. Dealers said that investors bought shares on hopes of strong corporate results and shrugged off the factional violence in the country’s commercial capital.
The KSE 100 index continued its march, although slow, towards the desired five-figure level. It seems market participants are cautious, keeping options open for retrieval to minimize the possible losses in case of reversal at the bourses.
Stock market analysts observed that the investors discounted the political situation after couple of violent days in Karachi where the prominent coalition partner of the government threatens to leave the coalition, and political chess board may take a shift, which may affect the investment climate, they added.
The KSE 100 Index opened in green zone with a gain of 39.31 points and at the end of the day closed at 9,797 level with a gain of 20.79 points. KSE 30 index closed at 10329.24 level with a gain of 39.97 points.
All shares index closed at 6942.43 level with a gain of 11.51 points.
Trading activity was minimal as compared to the last trading session as the Ready market volume stands at 178.320mn as compared to last trading session 227.130mn. Future market volume however stands at 1.602mn shares as compared to 1.708mn shares last trading session.
Market Capitalization stands over Rs. 2.811tr, as total trades increases to 105,474 as compared to last trading session 105,315, while 171 companies advanced, 213 declined and 18 remained unchanged.

KSE approves listing of Ghani Gases Ltd

2010-01-02T23:49:00.002+05:00

Karachi Stock Exchange (KSE) has approved the formal listing and quotation of share of Ghani Gas Ltd (GGL) on the completion of all listing formalities. According to KSE, the trading in the GGL shares will start from January 5, 2010.

Bosicor Pakistan changes its name to Byco Petroleum

2010-01-02T23:46:00.002+05:00

Bosicor Pakistan Ltd (BPL) has changed its name to Byco Petroleum Pakistan Ltd from January 1, 2010.
According to information reaching KSE, the address of the company has also been changed to Harbour Front, 9th Floor, Dolmen City HC-3, Block 4, Marine Drive, Clifton.
It may be noted that Byco Industries Incorporated (BII) has acquired 34.81 percent shares (216.383 million shares of BPL from Bosicor Corporation Ltd (BCL) in return for issuance of shares of BII or control of BPL.

Abid Ali Habib, Yasin Lakhani, Dawood Jan Mohammad, Munir Khannani and Majeed Adam won KSE Election for 2010

2009-12-15T22:48:00.012+05:00

The annual election of directors of Karachi Stock Exchange was held on Tuesday, December 15, 2009, to elect five directors for the next term commencing from January 01, 2010. 12 candidates contested the election for which a total of 172 members of the Exchange casted their votes, whereas, 3 ballot papers were declared invalid. Accordingly, the five candidates who were declared as successful are Mr. Abid Ali Habib, Mr. Muhammad Yasin Lakhani, Mr. Dawood Jan Mohammad, Mr. Mohammad Munir Mohammad Ahmed Khannani and Mr. Abdul Majeed Adam.
As per the Articles of Association of the Exchange, four non-member directors would now be nominated by the Securities and Exchange Commission of Pakistan for the next term amongst from whom the next Chairman shall be elected by the Board. The Managing Director, Mr. Adnan Afridi, by virtue of his office, is the tenth director on the KSE Board.
The KSE management appreciates the contribution made by the outgoing directors during the year 2009 and welcomes the incoming directors on the KSE Board for the next term.

SECP extends last date of filing of annual accounts upto December 4, 2009

2009-11-30T20:16:00.004+05:00

The extension in time allowed by Securities and Exchange Commission of Pakistan (SECP) for filing of annual returns upto Friday December 4, 2009, is also applicable on filing of annual accounts.
SECP had already extended the last date for filing of annual returns for further four days, i.e., upto December 4, 2009 on account of the Eid holidays. It is clarified that the extension in time is also applicable on filing of annual accounts.
All public listed, public unlisted, associations not for profit, and private companies (having a paid up capital of Rs. 7.5 million or more), which have held their Annual General Meeting on October 31, 2009, are required to file their annual accounts within 30 days, by November 30, 2009. Besides, foreign companies are also required to file annual accounts relating to their business operations in Pakistan as well as global accounts.
Annual accounts from companies will be accepted during the extended period without additional payment of fee for late filing, as prescribed under the law.
The Companies may file the annual accounts through eServices, by following the link, https://eservices.secp.gov.pk/eServices. The filing fee through eServices has been set lower than manual submission, to encourage online filing.

BMA Empress Cash Fund to be launched soon

2009-11-05T16:20:00.001+05:00

The BMA Empress Cash Fund (BECF) is being launched next week by BMA Asset Management Company as an open-end money market fund whose IPO will be held from 10 to 11 November 2009. The Fund’s key objective is to maintain high liquidity and minimize risk which makes it the ideal vehicle for savers and deposit holders seeking to enhance income while maintaining the safety of a bank deposit. The BMA Empress Fund will invest only in AA rated banks and government securities which will enable the fund to generate consistent risk adjusted returns for unit holders.
The announcement was made by Muddassar M. Malik, Chief Executive of BMA Asset Management, in an exclusive ceremony held at BMA Group Headquarters in Karachi.

Bulls prevail at KSE

2009-10-26T22:20:00.002+06:00

Karachi stock market witnessed bullish trend on Monday as the benchmark 100 index surged by 197 points.
The business activities started on positive note at the start of a new business week. Investors showed interest in buying as some good financial results were announced by some of the companies keeping the market in positive zone. The KSE-100 index closed at 9348, up 197 points with trade volume of 196.1 million shares. Pak PTA remained volume leader with 53.5 million shares and share price of Rs 6.69, up Rs 0.62.

Karachi stocks end on green note

2009-10-21T17:18:00.003+06:00

Karachi stock market witnessed bullish trend on Tuesday as the benchmark 100 index closed above 9500 points level.Business activities started in positive zone as technical correction was witnessed in the market. Dealers said the banking sector was in the limelight after the central bank said in a statement that banks and other financial institutions can mark 40 percent of the loans and advances they give out as assets, compared with the previous 30 percent. The Karachi Stock Exchange's benchmark 100-share index ended up 1.68 percent, or 157.77 points, at 9,569.06 on turnover of 220 million shares. Jahangir Siddiqui and Co. remained volume leader with share price of Rs 39.06, up Rs 1.06.

SECP improves Pak ranking on WB business indicator

2009-10-14T17:29:00.003+06:00

ISLAMABAD: The Security and Exchange Commission of Pakistan (SECP) has contributed well to improve Pakistan’s ranking in the World Bank’s `Starting a Business’ indicator. The Recently released World Bank Doing Business Report 2010 has revealed a significant improvement in `Starting a Business’ indicator, which inter-alia takes into account the procedure of registration of a company with SECP, said press release issued by the commission yesterday.
The country’s ranking has improved by 17 points from 80th in 2009 to 63rd in 2010, the statement said adding that in South Asia, Pakistan is ranked well ahead of India, which is placed at 169, Bangladesh at 98, Bhutan at 80 and Nepal at 87. According to the report, registration of a company could be completed online through the e-Services project that was launched to improve efficiency and effectiveness of the business processes of SECP with a speedy, transparent and paperless environment, making it easier for the representatives of companies and the business community to interact with and obtain information from SECP.

Pak stocks receive fresh foreign investments

2009-10-04T23:50:00.001+06:00

Karachi Stock Exchange (KSE) witnessed fresh buying worth $235 million by foreign investors during the first quarterly in the current fiscal year.
According to statistics issued by National Clearing and Settlement Company, scrips worth $123 million were sold by the foreign investors during the first quarter last year at Karachi stock market.
According to world analysts, the Pakistani stock market stands out in comparison with Asian countries; while, the prices of companies’ scrips stand at 50 percent discount which acts as catalyst for the foreign investors.

KSE-100 Index recomposed

2009-10-01T20:48:00.002+06:00

Karachi Stock Exchange (KSE) has re-composed KSE–100 Index for the review period from March to August 2009, as per the Re-composition Rules of KSE-100 Index.

In aggregate, 9 companies would be affected due to re-composition process. The companies included in the index are First Haibib Modaraba, Sigma Leasing Corporation of Pakistan, Habib Sugar Mills Limited, Agriauto Industries Limited, East West Insurance Company Limited, Millat Tractors Limited, Gharibwall Cement Limited, Media Times Limited and Attock Cement Pakistan Limited.

The outgoing Companies are Allied Rental Modaraba, Askari Leasing Limited, Colony Sugar Mills Limited, Baluchistan Wheel Limited, Hinopak Motors Limited, First Capital Securities Limited, Samba Bank Limited, Arif Habib Bank Limited and Altern Energy Limited. The recomposed Index, based on the prices of August 31, 2009 will capture the market capitalization to the extent of 91.56 percent of the total market capitalization as compared to 90.68 percent of the current Index. The revised Index will be implemented w.e.f. October 01, 2009, list of companies attached.

Merit Packaging Limited: Profile

2009-09-12T21:50:00.002+06:00

Merit Packaging was incorporated in the year 1980 and is equipped with the most modern plant and machineries for paper and board packaging and conversion industry. Merit’s major customers include manufacturers and marketers of cigarettes, soap and detergents, tea and biscuits, etc. We employ over 250 persons and possess an ISO 9001-2000 certification.

On the corporate side, MPL is a part of the Lakson Group of Companies which is well-known for its businesses affiliations and joint ventures with world renowned companies of USA, i.e. Colgate-Palmolive, Kraft General Foods and McDonalds. The group as a whole, provides employment to over 4200 persons.

PAPER AND BOARD
The company meets bulk of its requirement for board and paper from its sister concern, Century Paper & Board Mills who have a 650 metric tons a day capacity to produce high quality Paper and Board.

EQUIPMENT DETAILS
We have the most modern and state of the art multicolour off-set presses with in-line single and double coating features, Bobst automatic die cutters, Folder gluers and Roto-gravure process printing machines.

FACTORY
Our well built factory located at Karachi is appropriately equipped with effective airconditioning to control the quality of our production.

POWER AVAILABLE
The local power supply company caters to our energy needs. Additionally, we have our own standby generators to fulfill our entire power requirement both for the factory and its office block.

MEHRAN SUGAR MILLS LIMITED: Profile

2009-09-12T21:45:00.002+06:00

MEHRAN SUGAR MILLS LIMITED was incorporated as a Public Limited Company in December 1965. The company’s shares are quoted on the Karachi Stock Exchange since May 1968. The Mill is situated in the cane growing area of Distt. Tando Allayar and is spread over 118 acres. This includes Plant & Machinery, a residential estate, labor colony and a Research farm.
The plant and machinery for manufacturing and refining was imported from M/s. Mitsubishi Japan. The plant was originally designed with a crushing capacity of 1,500 TCD. With constant BMR the plant capacity was extended to 3,500 TCD. In 1992 the company went for a large-scale expansion and set up a second parallel unit. The installed capacity was thus increased to 7,500 TCD. The plant is maintained in excellent condition, ensuring quality results during all stages of production. The Company received ISO 9002 Certification in 1998, which has been upgraded to ISO 9001:2000 in 2004.

Over a period of time, the company has made steady growth. The Company's performance during the past 34 years has been satisfactory as is established by the fact that the company was awarded top 25 companies of the Karachi Stock Exchange twice, in the years 1983 and 1986.

Mandviwalla Plastic Industries Limited: Profile

2009-09-12T21:37:00.001+06:00

Mandviwalla Plastic Industries Limited was incorporated as Public Limited Company on June 13, 1988 and obtained Certificate for commencement of Business on February 13, 1989. The basic objective of the company is to set up plastic injection and blow molding units and manufacture and supply products of all kinds made from plastic.

The project is located at Uthal Industrial Estate, District Lasbela, Balochistan. A 5 Acre leasehold plot of land has been acquired from Lasbela Industrial Estates Development Authority which is providing all infrastructural facilities for the speedy implementation of all industrial units in the area.

The project consists of a computerized injection molding plant. The following range of products are produced at this unit.

Plastic Chairs.

Poultry Equipment.

General Household Products.

Components of Domestic Appliances.

Automotive Battery Containers.

Textile Bobbins.

Textile Crates.

TV Cabinets.

Rubbermaid Products,

Automobile Products. The plant is producing the single mould monoblock "SOHNI" plastic chairs as the main product along with automatic poultry drinkers and other secondary domestic products. In addition to the above, the company is engaged in the manufacture of plastic components as vendors to automotive and domestic appliances industries.

The company has entered into a technical know how agreement with M/S Mauser Werke GmbH for the manufacture of these plastic drums. Under the terms of this agreement Mauser Werke GmbH provides know how including all information, experience and methods, preset and future, including special techniques and production devices that are required to enable technicians to produce the plastic containers to perfect quality standards. Also Jerry Cans from 20 Liters to 50 Liters will be in production by January 99

.Consequent upon signing of KNOW HOW agreement with MAUSER WERKE of Germany the company’s name was changed to Mandviwalla MAUSER Plastic Industries Ltd. The Company was listed on the Karachi and Lahore stock exchanges. Sponsors of the company have also put up another plant at Jebel Ali near Dubai UAE named Gulf Drum Corporation.

In Pakistan company’s products enjoy wide acceptability. During the year ended 30th June 1998, the company achieved a sale of Rs. 192,086 million which involved only part of the year’s production. Company supplies its products to prestigious National and Multinational Companies.

Karachi Stock Exchange joins ICB club

2009-09-12T18:30:00.003+06:00

Karachi Stock Exchange (KSE) has adopted the Industry Classification Benchmark (ICB), a jointly developed classification system launched by FTSE Group and Dow Jones Indexes, to classify and analyze specific sectors of the Pakistan stock market using internationally accepted standards. According to KSE here Friday. The ICB provides a comprehensive system with four levels of granularity - industry (10), supersectors (19), sectors (41) and subsectors (114) and facilitates cross-border company comparison.
ICB will replace KSE’s own classification system after a transition period in which KSE will run both classification systems parallel to allow a smooth adoption process. ICB is the standard used by major stock exchanges, data distributors, index providers, buy side and sell side institutions, custodians and media organizations globally. KSE joins other exchanges and global financial institutions which have integrated ICB into their research, trading and investment workflows.

Dost Steels Limited: A profile of strength

2009-09-12T17:09:00.004+06:00

Dost Steels is introducing hot rolled Quenched steel Bars in Pakistan and occupies a pre-eminent position in the secondary steel sector. It has leveraged itself to become a preferred provider to customers at home and across the border.
The Company is expected to experience strong growth from the beginning itself due to increasing demand of 18-20% PA for steel in the country. The demand for steel re-reinforcement (rebars) in Pakistan is over 4 million tons per annum out of which 600,000 tons of high strength deformed grade rebars in bundled form is being imported. These imported deformed steel rebars are of the same grade, application, packing and size as the one Dost Steels will produce in its unit in Punjab which will be the first unit in Pakistan. The induction of this modern bar mill in the industrial horizons will lead to a kickstart the Engineering industry in the country.

We have invested a lot of resources in installing a state-of the-art rolling mill, R& D, product testing, networking and marketing, customer services with the best people and practices in the industry.

To position ourselves strategically as a strong player for the growing markets of Pakistan, Afghanistan and the Middle East. Dost Steels Ltd will be a leading manufacturer and supplier for high quality hot rolled deformed Re-enforcement bars (REBARS).
We have adopted the latest technology to enable cater to customers who require engineered solutions. We will change the way steel is bought and sold.

Our goal is to become the most trustworthy, highest quality, lowest cost- Steel Rebar manufacturer in Pakistan. We also endeavor to improve the cultural and environmental conditions of our surroundings.
We will lead the market and raise the bar for quality standards prevailing in the country. We will offer steel which gives true and lasting value to our customers.

Dost Steels has adopted safe and environmentally friendly practices and will fulfill the social obligation and compliance of good governance in and out.
Deliver strong returns on investments of our stakeholders by adopting specialized and modern processes.

Dost Group is an established name with operations in textile spinning and gelatin manufacturing sectors.
The construction industry has shown rapid development necessitating a dramatic increase in the demand for steel. The sudden increase in seismic activity of the region coincided with this ongoing change which has triggered an exponential rise in demand for seismic friendly steel. This scenario paved the way for our automatic steel re-rolling mill capable of manufacturing 350,000 tons of high strength rebars.

Today’s modern construction industry demand better quality materials and processes. To meet their requirements we have teamed up Siemens and Ansaldo. Both companies are the leading global players in the realm of steel manufacturing. They design, manufacture and supply hot rolling mill plants for the production of bars a, sections and wire rods of varying grades.
Our partnership with these companies isn’t just restricted to the technological side. We share knowledge and expertise related to the entire business activity.

Since our entire operations conform to international standards ASTM A-615 and BS 4449-2005, regulating quality and consistency becomes a routine exercise.
We employ the Bar Quenching Process, instead of the conventional process, due to which Dost Steels bars bear a range of attributes superior to that of other conventionally processed bars.

Dost Steels is a eighty million dollar project over the period of 2 years involving funds from a list of financial institutions. Faysal Bank, the key advisor and arranger, has facilitated long-term finance. The funding has been arranged through a syndicated term facility and working capital. The trust of the financial institutions ensures that our activities will bear results in no time.

Impressive trade activity at Karachi Stock Exchange

2009-09-07T23:55:00.002+06:00

Foreign portfolio investment at Karachi Stock Exchange and upgradation of Pakistan’s credit rating by international agencies pushed the benchmark KSE-100 Index beyond the psychological barrier of 9000 level for the first time in the last nine months.
The trade began this week at the stock market with positive momentum which gained further strength towards the end of the week. The major Index closed this week with a huge gain of 462 points at 9003.
The discovery of new oil reserves in the country and investment by foreigners fueled major investment in energy and banking stocks.
The average volume stood at 240 million shares this week.
KSE-30 Index surged by 464 points to finish the week at 8651.

KSE fetches $45.285m foreign investment in just 2 days

2009-09-02T16:08:00.001+06:00

Foreign players made a net investment of $45.285 million at the Karachi Stock exchange in just two sessions (Monday and Tuesday), according to the National Clearing Company of Pakistan Ltd.
Only on Tuesday, offshore investors invested $21.3 million (gross buy of $24.9 million and gross sell of $3.6 million). Moreover, total investment made by foreign players on Monday dramatically inched up to $23.99m (gross buy of $26.5m and gross sell of $2.5m).
This foreign interest in the local stock market has changed the market’s direction and index is travelling towards sky while benchmark gained over 450 points in last three sessions.
Most of the market experts are of the view that the current foreign interest in the equity market is due to the availability of attractive low-priced stocks. Shahid Ali at HMFS expressed that, “it would be unfair to say that Monday’s and Tuesday’s bullish momentum can be attributed to foreign investors who invested around $24 million only on Tuesday. We need to give credit to local investors who keep their faith in philosophies of valued investors. We are of the view market is running with heavy fuel as if you are travelling on a missile.”
While analyst Hasnain Asghar Ali stated, “the dollar inflow mania kept the local participants on edge of their seats, since the rally has been initiated by participants from foreign land earnings multiples were substantially increased, as indeed the local equity market is still offering stocks with consistent dividend and growth record at substantial discounts.”
Meanwhile, positive news flow during the month of August has fetched over $95m Foreign Portfolio Investments, highest monthly flows since February 2008. This was at the back of reversal of country risk premium led by contained twin deficits and IMF assurance of continuous funding till December 2010.
Additionally, the expected flows from US and Friends of Pakistan are likely to improve further liquidity and provide more fiscal space for government to incur development expenditures. This is reflected in the stock market and Eurobond rally off late.

KSE receives $59.324m investment in August

2009-08-31T10:52:00.002+06:00

Foreign investors have invested $ 59.324 million in the stock market during August 2009, SBP report said here Saturday.
According to a daily position of SBP’s Special Convertible Rupee Account (SCRA), the inflow of foreign investment was $ 93.905 till August 28, 2009 while the outflow was $ 34.581 million.
Major investment came from USA and UK, followed by Luxembourg and Hong Kong.
On August 28, 2009, the net inflow was $ 5.999 million, as inflow was $ 6.987 million while out flow stood at $ 0.988 million.
Meanwhile, the Karachi Stock Exchange (KSE) has extended the suspension period of eight companies for another 60 days for not removing the cause of suspension.
According to KSE, the action has been taken to protect the interest of trade and public.
They are Prudential Investment Bank Ltd, Schon Modaraba, Harum Textile Mills, Southern Networks Ltd, Carvan East Fabrics, Baig Spinning Mills Ltd, Tri Star Shipping Lines and National Fibre Ltd. The KSE management will remove the suspension after these companies comply with the requirements.

KSE witnesses brisk trading as 100-share index gains 226 points

2009-08-29T14:43:00.002+06:00

The Karachi stock market faced intense buying on the last trading day of the week Friday due to foreign investment in oil and bank sectors.

Buying was also supported by local investment in blue chips like bank, oil and cement sectors on account of good result announcements. The main trigger for the market was Standard and Poor’s (S&P) revision of Pakistan’s credit ratings to ‘B-’, which attracted interest from foreigners who remained the net buyers of shares worth $23.8 million.

The Karachi Stock Exchange (KSE) 100-share index increased by 226.06 points or 2.72 percent to close at 8,541.22 points as compared to previous session’s 8,315.16 points. The KSE 30-share index closed at 9,187.48 points with a gain of 255.64 points. The KMI 30 index closed at 12,855.50 points with a surge of 304.45 points. Analysts said that despite negative news in terms of failure to reach an agreement on margin financing and surge in all T-bills yields, an overall positive mood was witnessed at the market.

The market turnover went up by 72.57 percent and traded 201.69 million shares as compared with previous session’s 116.87 million shares. The overall market capitalisation was up by 2.5 percent to close at Rs 2.501 trillion as against Rs 2.440 trillion. Out of total 372 companies, 223 closed in the positive zone, 124 in negative and 25 remained unchanged. “Reduction in discount of Pakistani bonds listed in the international market, provided yet another trigger to the market, wherein the sentiment was re-established by the cheapest stock of oil and gas exploration sector,” said analyst at Aziz Fida Husein and Co Hasnain Asghar Ali. “Buying by both local and foreign participants continued in PPL, which extending the momentum of other stocks of the sector.”

While expectations of materialisation of government’s commitment to address the circular debt issue kept the investors active in the likely beneficiaries, accumulation in MCB led the sentiment in other sector stocks, he said and added that some witnessed re-gearing after the announcement of their six-month financials while the leading stock of the sector, NBP likely to announce its six months results failed to stay at par with MCB on gains.

Having a heavy weight in the index, MCB and other sector stocks contributed substantially to the index. Healthy profits announced by yet another low priced stock Pakistan PTA allowed substantial rise in the turnover that stayed comparatively low in proportion to the prevailing sentiment. The stock contributed 35 percent to the total turnover.

— invites claims against three expelled members

2009-08-23T17:56:00.003+06:00

Karachi Stock Exchange (KSE) has asked its members, investors and clients to submit claims arising out of transactions made against its three expelled members Eastern Capital Limited, ClikTrade Limited and Capital One Equities Limited. It may be noted that these three brokers were expelled by KSE for not resolving investors’ complaints after the Security and Exchange Commission of Pakistan (SECP) had suspended the registration for not resolving investors complaints.

KSE said that claims alongwith supportive evidence could be directly submitted to CSIR Department of KSE. Claims against Capital One Equities can be despatched to Post Box No 5550 of Karachi City GPO with postal code of 74000 before September 25, 2009. Similarly, claims against Eastern Capital can be despatched to Post Box No 5551 of Karachi City GPO and claim against Cliktrade can be sent to Post Box No 5552 of Karachi City GPO with postal code of 74000 before September 25, 2009.

KSE-100 Index surges beyond 8000 level at weekend

2009-08-22T17:26:00.002+06:00

Hectic buying by investors pushed the benchmark KSE-100 Index at the local capital market by 134 points to 8108. The share market opened upbeat and remained positive throughout the two sessions on the weekend as investors took fresh positions in telecom, communication, oil & gas and cement sectors.
The reports regarding approval of draft of CFS financing by the market affairs committee also kept circulating the market while big brokerage houses and foreign investors remained active in the market.
New margin eligibility list: Meanwhile, the Karachi Stock Exchange has revised the list of margin eligible securities for ready market on the basis of eligibility criteria approved by the Security and Exchange Commission of Pakistan (SECP), effective from September 21, 2009.
According to a KSE notice, the new list included 40 scrips which would be acceptable as collateral against exposure margins and market-to-market losses.
KSE has asked its members to replace those shares with the Exchange which are not included in the list before September 21, 2009.
KSE will not value such shares for deposits against margin demand.
The new list included ABL, ACPL, AHL, AHSL, AICL, AKBL, ANL, APL, ATRL, BAFL, BAHL, BOP, BOSI, DGKC, Engro, EPCL, FABL, FFBL, FFC, HBL, HUBCO, ICI, JOVC, JSCL, JSIL, KAPCO, Luck, Mari, MCB, NBP, NETSOL, NIB, OGDC, PAEL, PAKRL, PKGS, POL, PPL, PRL, PSO, PTCL, Shell, SNGP, SPL and UBL.

Moody’s rating change pushes KSE 100-share index up by 62 points

2009-08-19T17:47:00.002+06:00

The Karachi stock market witnessed a bullish trading session Tuesday as Moody’s investor service revised the ratings of NBP, HBL, UBL, MCB and Pakistan’s sovereign debt to stable, which boosted investor confidence and they went for buying activities.

The Karachi Stock Exchange (KSE) 100-share index gained 62.55 points or 0.79 percent to close at 7,995.10 points as compared to the previous session’s 7,932.55 points. The KSE 30-share index closed at 8,474.25 points with an increase of 65.32 points. The KMI 30 index closed at 11,873.31 points with a surge of 63.07 points.

Analysts said the market remained buoyant since the start of the trading activities the trend continued till the closing. Cement and bank stocks remained in the limelight during the session.

The market turnover went down by 22.55 percent and traded 106.86 million shares as compared with previous session’s 137.99 million shares. The overall market capitalisation was up by 0.68 percent to close at Rs 2.354 trillion as against Rs 2.338 trillion. Out of total 385 companies, 166 closed in the positive zone, 193 in negative while 26 remained unchanged.

“With limited events in sight and smooth phasing out of the result season the market performed in a narrow range,” said analyst at Aziz Fida Husein and Co Hasnain Asghar Ali. “The index did manage a triple digit gain, that was generally attained by gains in MCB and OGDC as whispers suggested foreign buying in both the index heavy weights, but the gains failed to inspire an across-the-board activity as reflected by the low turnover.”

Offloading by the local investors disallowed the 100-share index to sustain triple digit gains. Dips in the main board stocks mainly those yet to announce June end results and those (few in number), which outperformed market expectations, invited cautious accumulation by the local investors who opted for squaring up their positions, he added.

Stocks trading at higher multiples have faced local selling that is being absorbed by foreign participants (due to unknown reasons) disallowing any major impact on 100-share index, he said and added that while tug of war continued in leading cement stocks due to CCP phobia and unconfirmed news of decline in local cement rates, dips however continued to invite renewed buying interest.

“Rise in local furnace oil prices and foreign buying played a key role in rejuvenating spirits of the investors,” said senior analyst at Shahzad Chamdia Sec Ahsan Mehanti. The KSE 100-share index opened in green zone with a gain of 15.49 points and at the end of the day closed at 7,995.10 points with a gain of 62.55 points.

Central Bank cuts interest rate by 100 points

2009-08-15T17:42:00.001+06:00

State Bank of Pakistan has slashed the discount rate by 100 basis points, report said on Saturday. At a press conference here Saturday, Governor SBP Syed Saleem Raza announced the monetary policy. He announced that the SBP has decided to slash the discount rate by 100 basis points. “The SBP has cut the discount rate by one percentage points from the current 14 per cent,” Raza said. The governor said GDP ratio reaches 2.1 pc. He said foreign exchange reserves improved sharply and stood at $9.1 billion.

The SBP has cut the discount rate by one percentage points from the current 14 per cent. It had cut the rate by one percentage point in April this year from 15 to 14 per cent. The central bank also changed the interest rate mechanism to bring transparency in Repurchase Offered (repo) rate as well as reverse repo rate as recommended by the International Monetary Fund (IMF).

Profit-taking limits stock market gains

2009-08-15T17:31:00.001+06:00

The KSE 100-index could muster nominal 14 points on Wednesday as investors preferred booking profit for the second consecutive day while benchmark closed the day at 8,058 points.
The KSE sustained a decent surge during the session mainly due to positive activity in main board banking stocks, confirmation of MCB-RBS transaction and whispers of consistency in earnings likely to be announced by NBP.
Besides the banking stocks, cement, textile and oil & gas exploration stocks witnessed stock swapping, wherein the stocks trading at higher multiples were switched with those trading at comparatively low multiples, thus having a neutral to positive impact on the index, besides providing trading opportunities to the market men as reflected by decent turnover. “Rise in dollar reserve of the country due to release of third tranche by IMF did allow the local currency to find stability. Besides actions being undertaken by the authorities to reduce creation of artificial demand of dollar is likely to divert local liquidity to available liquid investment modes”, stated research analyst Hasnain Asghar Ali.
Moreover, limited interest of state run funds provided support to the market throughout the session.
Sell-off initiated after nil dividend announced by PSO was duly neutralised as the textile stocks, after reiteration of aggressive textile export target of $25 billion witnessed renewed buying interest, with big announcements coming, mixed to negative reaction is expected from at par or below expectation announcements.
The benchmark 100-index share kicked-off the day with green numbers, adding 27.46 points and index witnessed intraday high of 8,135.36 points on Wednesday. Later index closed the day at 8,058.46 points with a gain of 13.96 points.
Trading activity was further increased to 218.108 million shares as compared to last trading session’s 200.809 million shares. Total trading value of the stock exchange decreased to Rs 10.448b from Rs 13.299b of last session.