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Cynicism
at its peak
By
M. Aasim Maqbool
Early last
week, the chairman of a very small sized brokerage house was the studio
guest in Geo News program ‘Tezi Mandee Roundup Live’. He blamed big
brokers for ripping-off investors and speculators, and also blasted the
regulators for not taking these big brokers to task.
When the flabbergasted
host asked him about the proof for his allegations, he said it was all
there in the investigators’ report. Either this man has not read the
reports even cursorily, or he needs to do an elementary course (non-credit
of course) in law, or both. Flying off the handle in the manner he did, in
a live TV show, would only further harm the unfortunate capital markets.
The big brokers may not be angels, to say the least, but one needs clear
proof to take these, or for that matter, anyone to courts or have the
authority to declare them ‘guilty’ if the plaintiff has submitted
sufficient proof.
In private
conversations, everybody loves to backbite, but doing it publicly is
taking the matter too far. As I understand, his peers in the brokerage
community have learnt to ignore his extreme views but perhaps this time
someone should make him realise.
What is also important
is that the hosts need to be more careful in his presence. As for the
readers of this column, they should always remember that markets go
up-and-down even in the most developed countries, and this up-and-down
movement in prices is used by value investors to keep aligning their
portfolios.
On last Friday, Merrill
Lynch issued a detailed report on regional markets, comprising Pakistan,
India, Thailand, Vietnam, Singapore, Philippines, Malaysia, Australia etc.
For us in Pakistan, the best part of the report was “Sell India, buy
Pakistan”. According to Pakistan strategist for ML, the rupee is
overvalued by 1 or 2 per cent only and SBP is unlikely to announce a
minimum deposit rate, forthcoming general elections are not going to alter
the irreversible reforms path, etc.
Geo News was the first
to issue a News Alert and the market reacted very favourably in the second
session. The point is that why does our market react to such reports that
do not carry any new stuff? Local analysts have been saying just about the
same thing but the market did not heed. This makes a good case for the
regulators to encourage local brokerages’ linkups with internationally
reputed investment banks.
The Securities and
Exchange Commission of Pakistan (SECP) has given permission to 4 asset
management companies to launch pension funds under the Voluntary Pension
Scheme rules that were issued in 2005. Several other AMC’s have also
applied but SECP needs to be asked to treat all matters with the same
speed with which SECP has proceeded against Calmate.
One host of Tezi Mandee
Live program of Geo News keeps asking his studio guests whether they know
of any way the present Futures market could be used by investors to hedge.
So far nobody has answered in affirmative. Many analysts believe that the
programme host has a point, and that is, the futures market is only a
parallel ready market and is only meant for speculators and arbitrageurs.
It would be interesting to hear what the SECP officials have to say in
this regard.
Last week, the KSE100
index gained 2.74 per cent, or 278 points if you may, closing at 10425
points. This was largely due to NBP share price rising by Rs24.15 last
week, which is a 10.25 per cent rise, although other heavy weights within
KSE100 basket helped too. A 1.12 per cent decline in POL was the only one
in the top 10 heavy weights. And POL and ABL with a 0.11 per cent decline
were the only losers within the top 25 heavy weights within the KSE100
basket. As against this performance, our portfolio gained only 1.7 per
cent, and that was much due to a Rs4.2 decline in POL and Rs6 decline in
Packages. We are not unhappy about our portfolio’s performance last week
because we believe that at least Packages will bounce back sooner rather
than later.
OUR PORTFOLIO - LAST
WEEK’S CLOSE
Symbol
Last rate Shares Value
Weekly
Rise/fall
gain/loss
in share
price
ABL
94
100
9,400
(10)
(0.10)
ACBL
114.5
100
11,450
700
7.00
AICL
157.7
100
15,770
390
3.90
ANL
21.1
100
2,110
35
0.35
BAFL
44.6
100
4,460
100
1.00
BOP
107.4
100
10,740
335
3.35
CTTL
55.25
0
-
-
(16.05)
DGKC
66.85
200
13,370
770
3.85
FFC
107.25
700
75,075
1,925
2.75
HCAR
54.5
100
5,450
(120)
(1.20)
HUBC
27.5
0
-
-
0.40
ICI
120
500
60,000
1,300
2.60
INDU
200
300
60,000
1,050
3.50
KAPCO
40.8
500
20,400
100
0.20
LUCK
-
100
6,230
-
-
MCB
265.5
100
26,550
520
5.20
MLCF
17.3
500
8,650
75
0.15
NBP
260.65
100
26,065
2,415
24.15
NCL
38.75
0
-
-
0.75
NML
91.45
110
10,060
347
3.15
OGDC
116.5
300
34,950
990
3.30
PKGS
204
200
40,800
(1,200) (6.00)
PNSC
43.55
100
4,355
305
3.05
POL
340.55
300
102,165
(1,260) (4.20)
PPL
242.7
100
24,270
870
8.70
PSMC
414
200
82,800
600
3.00
PSO
307
200
61,400
1,830
9.15
PTC
48.05
0
-
-
1.55
SHEL
398
100
39,800
350
3.50
UBL
157.1
100
15,710
145
1.45
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