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MARKET BEHAVIOUR AND ANALYSIS

KARACHI: The market improved marginally as the index gained 14 points to close at 1556. The upsurge was dominated by active short-covering as well as some genuine buying in the fundamentally strong scrips. The trading volume remained in the normal range with 22.3 million shares changed hands in the rings.

The centre of attraction were undervalued scrips in banking and energy sectors. The prominent among them were PTC and Hub Power, which combinedly accounted for over 60 percent of the volume and closed with marginal gains. Other prominent scrips included Dhan Fibre, Fauji Fertilizer and Lucky Cement.

The market may take consolidative stance on Thursday in wake of the long holidays coming ahead. The immediate resistance faced by the index is at 1568.00, the breach of which can further help in determination of further course of action.

IN THE LIMELIGHT

ADAMJEE INSURANCE

The scrip opened just above the overnight closing at 127.50 and after testing its long term trend line at 129, rebounded and closed at 128.50. The scrip is in neutral zone, while pressure indications are showing that the scrip has enough potential to test its important resistance level of 130 in Thursday's trading session. Breaking of this level will give the long term direction.

MAPLE LEAF

Despite some gains within the last three trading session, the scrip could not break its strong down ward channel, which was started on 2/14/96 on Tuesday it closed just below the major trend line of the downward channel at 18.40. Technical indicators are of the view that it will move sideways in a narrow range between 17.50-18.75 in coming session till it breaks the downward channel.

LUCKY CEMENT: A REVIEW

Lucky Cement a 100 percent equity finance project with a highest paid up capital in cement sector, is managed by "Yonus Brother Group", a well-established group in the country which deals in the business of export of textile products from Pakistan and is responsible for operating several spinning and weaving units in country.

PROJECT:

Due to rising demand of cement in the Northern Zone and abundant supply of basic raw material limestone and clay, the plant is set up in a strategic at Pezu, District Lucky Murawat with a total production capacity of 4000 tons of Grey Portland Cement per day and expected to utilize 85 to 90 percent of the rated capacity in the first year of its operation. Pilot run has already been done and the plant is expected to start commercial production by June 1996. The project based on dry processing technology, which is more cost effective. Most of the plant machinery _has been imported from China at a total cost of Rs. 1.84 billion including the expenses to be borne by supplier for training of the workers, whereas the cost of locally-manufactured machinery to be installed at the plant, is expected to cost Rs. 360 million. The total estimated cost of project is around Rs. 4.04 billion.

COMPETITIVE ADVANTAGE:

1) Due to the massive infrastructure activity that has been carried out over the past few years in the Northern Zone, the growth rate of demand is around 9 percent per annum in northern areas and since the plant is located at the heart of deficit area, the chances of market penetration are relatively higher. Besides the construction of Ghazi Barotha and overall infrastructure expansion and modernisation will increase the profitability of the company in coming years.

2) As it is the 100 percent equity financed project, therefore the company won't be incurring any interest charges, if any over the supply of cement. The plant is in a better position with its lower over heads charges to compete due to the absence of financial charges.

3) Five years exemption of sales tax on the assumption that the plant will start its production by 30 June 1996.

4) Due to the lack of power supply, the company set up its own power generating plant with generating capacity of 47 megawatt. The trial run of six out of seven engines has been completed and are ready to generate and supply power to the cement plant.

5) The company got thirty-year lease mining permission for basic raw materials i.e. clay and limestone.

TRADING MAJOR MAJOR MARKET 30 DAYS 50 DAYS NET

SHARE TREND RANGE SUPPORT RESISTANCE SITUATION M.AVG M.AVG CLOSE CHANGE

KSE INDEX CONSOLIDATIVE 1540-1568 1530.00 1595.00 NEUTRAL 1562.00 1633.00 1556.01 14.14

PTC SLIGHTLY UP 32.70-34.10 31.50 35.60 NEUTRAL 33.30 35.20 33.20 0.90

HUB CO CONSOLIDATIVE 31.00-32.50 30.00 32.50 S. OVERBOUGHT 28.30 29.20 31.95 0.95

FFC SIDEWAYS 73.30-74.00 72.40 75.40 NEUTRAL 74.24 74.10 73.40 0.40

LUCKY CEMENT CONSOLIDATIVE 16.35-17.20 16.00 17.50 NEUTRAL 17.62 19.70 16.60 0.25

DHAN FIBER CONSOLIDATIVE 6.35-6.75 6.20 7.50 NEUTRAL 7.72 8.34 6.50 0.05