The start of New Year has brought no immediate rewards. Dull and indifferent, that is mostly what generally describes Pakistan’s main bourse, the Karachi Stock Exchange these days. That is the general drift, so to speak, and it is reflected in KSE-100 index and volumes. There have been brighter sessions too, such as the one on Tuesday that saw the market get a 120-point boost. But these have been few and far between, and as a result the benchmark has stayed well below the 11,500 mark.
And there is nothing immediately in the offing that promises the kind of resurgence that could catapult it towards the 12,000 point peak achieved some weeks ago. But, some analysts say, things might perk up in a couple of weeks, or by close of January and early February at the latest. That is when the dividends and bonus shares are due from December-closing companies and institutions and individuals keen on making a fast buck make a bull run on the options they fancy.
For the Average Joe with liquidity, this down time in the market is also an opportunity, for he can do his buying at discounted rates. Those intending to go on a buying binge indeed have quite a few options to pick from. In the banking sector, as one had suggested before, there is ever dependable Habib Bank Limited in the mid-priced shares, while Bank Al-Habib is a decent cheap option. In between there is Allied Bank, going at under Rs58 despite Wednesday’s rise by a rupee and three quarters. Similarly UBL, at Rs54 apiece, is available at cut-rate.
Some who like to take a wager suggest Bank Alfalah, at a bit over Rs11, as one that could bring some windfall. The argument for it goes like this: it is under a new management, and its figures have seen an improvement. And the promise of a decent dividend, compared with its near base price, make it a bargain.
Sounds good, maybe too good, and one thing is certain: it is not likely to take a tumble. But expecting a windfall may turn out to be wishful thinking. Only go for it if you are in a betting mood – which means not much profit or a little loss would not upset you too much. But this scribe is not a betting man, so he would suggest treading with caution.
The really bad thing about speculation is that it is indeed ruinous even if you make a profit – because you’re lured to indulge in more and more, and finally script your own fall.
The fertiliser sector, though under a bit of cosh owing to stringent curb on gas supplies, still is most lucrative amongst the December closing shares. Here the Chhota and Barra Fauji, which in the brokers parlance stand for Fauji Fertiliser Company and its subsidiary Fauji Fertiliser Bin Qasim (Chhota and Barra neatly depicting their value, with the former give or take a few rupees nearly one-fourth of the latter) are the top buys.
The FFC gives dividend twice a year, and makes those who keep faith in it with bonus shares too. But the real sweetie is the FFBQ. If you don’t take my word for it, give close attention to Mr Ali Malik, CEO of the First National Equities. According to him, here’s why. “The FFBQ doesn’t offer any bonus shares but after every quarter without fail you’d find the dividend cheque in your mail box,” says Mr Malik. At under Rs44, it is a steal for you’re likely to get a quarter of the value back in one year. In percentage terms, the yield gets to well above 50. And that is why Mr Malik advised this writer to get a whole year’s salary in advance and invest in this beauty. It is entirely another thing what the COO of the company that owns this newspaper said when one took the request for a dozen salaries in advance to him. Regardless, one has already bought a sizable chunk and is happy with it.
The writer is Sports and Magazines Editor, Pakistan Today
