After a week’s sabbatical abroad, which really was not a time off for one was working, yours truly is back in harness. Meanwhile, with the regional situation tense and volatile as it is, especially after some gung-ho NATO helicopter gunship fliers by design or by accident (the uppermost feeling in these parts is that it was more of a case of the former than the latter) the market was inevitably likely to take a plunge in the week that one was away; and it did. However, it didn’t quite plumb the depths – the KSE-100 benchmark lost about 600 points, most of them in only one particularly bad session. Business as usual, or rather unusual! The investors, both of the institutional and the individual variety, were not just wary, they were jittery. And this little bout of nerves was quite justified. In such troubled times as these, you don’t venture out flashing your pocketbook.
But with some reconciliatory noises emerging from Washington, the slide down the slippery slope not only stopped, some recovery was already witnessed on Tuesday and a bit further by Wednesday, and the KSE-100 had already topped well over 11,500 by noon.
Still, one’s activity as far as buying and selling is concerned has obviously mostly been in the dormant zone these last few weeks. Perhaps, the reason is that having parked one’s little stash in the right scrips one is now waiting patiently till the dividend-paying time around February. But one has to watch out for the goings-on with keen interest. Maybe something quite attractive out of the blue would catch one’s attention these days. Or probably better still waiting for a windfall from somewhere (like every Average Joe Investor, this writer’s dream too) that would provide the wherewithal and the vim and vigour to embark on a buying binge.
Meanwhile, it makes one happy that the December-closing scrips that one had projected as decent buys have not done too badly despite the overall bearish trend. The reason why these survived and held their own despite the prevalent investor indifference towards the market in general that reflected in low volumes, was because the assessment was based on their balance sheets. The capital gain may not have been there as yet, but that too shall be dangled before one once we are well into January 2012 – close to the payout time when investors come back in droves to pick up with a focus on a handful of good prospects.
Getting to the specifics, there is further information that reaffirms one’s faith in these scrips. For one, the third quarter reports are out and only a month remains before the close of the ongoing year. These are quite healthy and heartening. We knew that profitability in the fertiliser sector was high. The reports on the brace of Fauji companies, the FFC and FFBQ reconfirm the fact that earning per share after three quarters year on year has been far higher. The FFC’s EPS after three quarters this year has been Rs16, while it was exactly half at Rs8 last year. And it is already in the business of sharing its profit with an interim dividend of 55 per cent – or Rs5.50 per share. In case of FFBQ the EPS is even better than hundred per cent: Rs7.68 this year, against Rs3.14 last year.
In terms of steep profits, not quite similar is the scenario in the three banks that were mentioned: Bank Al-Habib, Allied Bank and Habib Bank Limited. But in the case of all three, the gain over last year has been around 40 per cent. Not as good as the fertiliser sector, but definitely better considering that the banking sector had taken a hammering in recent years.
The writer is Sports and Magazine Editor, Pakistan Today
