N.P. Spinning Mills Limited’s financial results for the year ended June 30, 2012

Karachi, October 8, 2012 (PPI-OT): In compliance with the listing regulations of the Exchange, we have to inform you that the Board of Directors of the Company in its meeting held on October 05, 2012 at 3:30 p.m. at its registered Office (Karachi) has passed over payment of dividend for the year ended June 30, 2012.

The financial results of the Company are as follows:-

Amount in Rupees

June 30, 2012

June 30, 2011

Sales

1,792,499,017

2,129,405,131

Cost of goods sold

(1,756,285,594)

(1,952,540,131)

————-

————-

Gross profit

36,213,423

176,865,000

Other operating income

12,072,712

2,992,631

————-

————-

48,286,135

179,857,631

————-

————-

Distribution cost

13,483,352

21,618,163

Administrative expenses

45,997,162

50,827,171

Other operating expenses

20,491,115

8,707,555

Finance cost

25,871,026

12,551,715

————-

————-

(105,842,655)

(93,704,604)

————-

————-

(Loss)/ profit before taxation

(57,556,520)

86,153,027

Provision for taxation

(18,293,414)

(30,110,137)

————-

————-

(Loss)/ profit after taxation

(75,849,934)

56,042,890

Other comprehensive income

————-

————-

Total comprehensive income for the year

(75,849,934)

(56,042,890)

————-

————-

Earnings per share – basic and diluted

(5.16)

3.81

Annual General Meeting

The 22nd Annual General Meeting of the Company will be held Insha Allah on Wednesday October 31, 2012 at 9:30 a.m. at 7th Floor, Uni Tower, I.I. Chundrigar Road, Karachi, (copy of formal notice of meeting enclosed).

Book Closure

The Share Transfer Books of the Company will be closed from October 25, 2012 to October 31, 2012 (both days inclusive).

Notice of Meeting

Notice is hereby given that the 22nd Annual General Meeting of the Shareholders of N. P. Spinning Mills Limited will be held Insha Allah on Wednesday October 31, 2012 at 9:30 a.m. at 7th F1oor, Uni Tower, I.I. Chundrigar Road, Karachi, to transact the following business;-

1. To confirm the minutes of last Annual General Meeting held on October 29, 2011.

2. To receive, consider and adopt the Audited Accounts for the year ended June 30, 2012 together with Directors and Auditors reports thereon.

3. To appoint auditors for the year ending June 30, 2013 and fix their remuneration. The retiring auditors M/s. M. Yousuf Adil Saleem and Co., Chartered Accountants, being eligible, offer themselves for re-appointment.

4. To transact any other business with the permission of the Chair.

Notes:

1. The Share Transfer Books of the Company will remain closed from October 25, 2012 to October 31, 2012 (both days inclusive).

2. A member entitled to attend and vote at this meeting is entitled to appoint another member as a proxy to attend and vote on his/ her behalf. Proxies must be deposited at the registered office of the Company not less than 48 hours before the time of meeting.

3. The shareholders through CDC are requested to bring original CNIC, Account Number and Participant ID to facilitate identification and in case of proxy, must enclose an attested copy of CNIC. Representatives of Corporate Members should bring the usual documents.

4. Shareholders, who have not yet submitted copy of their valid CNIC are requested to send the same to our Share Registrar.

5. Change of address, if any, may please be notified immediately.

For more information, contact:
Muhammad Siddique
Company Secretary
N.P. Spinning Mills Limited
703, Uni Tower, I. I. Chundrigar Road,
Karachi-Pakistan
Phone: +92-21-32427202 (4 Lines)
Fax: +92-21-32427207
Email: info@npsm.com.pk

MCB Bank Limited’s board of directors’ meeting

Karachi, October 8, 2012 (PPI-OT): This is to inform you that a meeting of the Board of Directors of MCB Bank Limited (MCB) will be held on Wednesday October 17, 2012 at 09:30 A.M., at Jumeirah Emirates Towers, Dubai, United Arab Emirates.

The Bank has declared the “Closed Period” from October 08, 2012 to October 17, 2012, during which Director/CEO/CFO/Executives cannot buy or sell shares of MCB Bank Limited, pursuant to Clause (xxiii) Code of Corporate Governance contained in the Listing Regulation of the Exchange.

For more information, contact:
Abdus S. Sami
Company Secretary
MCB Bank Limited
MCB Building, 15-Main Gulberg,
Lahore Pakistan,
UAN: +92-42-111-000-111,
Ph: +92-42-36041621,
Fax: +92-42-35776616,
E-mail: asami@mcb.com.pk
Web: www.mcb.com.pk

PKR 60.9 billion released under PSDP in 1QFY13 – Alfalah Securities Limited

Karachi, October 08, 2012 (PPI-OT): The Planning and Development Division has released PKR 60.9 billion, or 26.13%, in 1QFY13 under the Public Sector Development Programme (PSDP) against the annual target of PKR 233 billion, according to official figures released by the Planning Commission.

According to Alfalah Securities Limited, the break up of released PSDP includes PKR 32.9 billion released for infrastructure projects, PKR 26.4 billion for social sector projects and PKR 0.7 billion for projects in other sectors. The spending on infrastructure development leads to improved demand for cement which bodes well for the cement sector companies.

AKD Quotidian about — MPS Review: End of Monetary Easing?

Karachi, October 08, 2012 (PPI-OT): The recent Monetary Policy announcement, which came in the footsteps of Post Program Monitoring talks with the IMF, had the SBP reducing the benchmark Discount Rate by 50bps to 10%.

According to AKD Securities, the rate cut is at the lower end of consensus estimates of a 50bps-100bps reduction where the SBP appears to have given due consideration to Core inflation at 10.4%YoY in Sep’12 and anticipated uptick in CPI in 2HFY13. Recall that Sep’12 CPI clocked in at 8.79%YoY, bringing the 1QFY13 CPI average to 9.15%YoY. At the same time, SBP has decided to implement measures to strengthen the liquidity management framework including 1)fortnightly maintenance of CRR alongside reduction in daily minimum requirement by 1ppt to 3% and 2) penalty of 50bps if Repo/Reverse Repo facilities are accessed more than 7 times in a quarter. Going forward, AKD Securities believes the 50bps rate cut could potentially spell the end of the monetary easing cycle in view of expected increase in price pressures beyond the next few months and latent Balance of Payment concerns. Within this backdrop, AKD Securities believes Banks can stage a rally where AKD Securities flags AKD Securities’ preference for UBL (CY13F P/B: 0.85x, P/E: 4.8x; TP: PKR 100/share), BAEL (CY13F P/B: 0.7x, P/E: 4.6x; TP: PKR 20/share) and NBP (CY13F P/B: 0.5x, P/E: 4.2x; TP: PKR 55/share).

End of monetary easing? The SBP has cut the benchmark Discount Rate by 50bps to 10%, effective for the next two months. This is at the lower end of consensus estimates of a 50bps-100bps reduction. Considering CPI is expected to remain in single digits across the next two months and the SBP has stated that there is increase likelihood of meeting FY13 CPI target of 9.5%, there does appear to be room for a 50bps cut in the DR come Dec’12. That said, with Core inflation sticky in double digits alongside anticipated uptick in CPI in 2HFY13 and latent Balance of Payment concerns, AKD Securities believes Friday’s 50bps reduction could potentially spell the end of the monetary easing cycle. In this regard, non-materialization of earmarked foreign inflows (US$2.5 billion) remains a key risk.

Banks is the limelight: In addition to the rate cut, the SBP has also notified certain amendments to the systemic liquidity framework. Salient among these is 1) shift onto fortnightly maintenance of CRR from weekly earlier, alongside reduction in daily minimum requirement by 1ppt to 3% (fortnightly average has to be maintained at 5%) and 2) penalty of 50bps if Repo/Reverse Repo facilities are accessed more than 7 times in a quarter. AKD Securities views the former as positive for Banks (e.g. simple CRR cut by 1ppt would make an additional ~ PKR 40 billion available for deployment) while the latter should not materially impact the larger, more liquid banks.

Morning Call about Monetary Policy – Arif Habib Limited

Karachi, October 08, 2012 (PPI-OT): SBP announces 50bps cut and revises Liquidity Framework

Monetary easing continues; 50bps cut brings policy rate down to 10%

In the recent monetary policy statement released on 5th October, 2012 the State Bank of Pakistan (SBP) slashed the policy rate by 50bps, bringing it down to 10%.

According to Arif Habib Limited, the objective was to revitalize the economic growth, by encouraging private sector credit offtake supported by the descending headline inflation which for the period 3MFY13 averaged at 9.2% YoY. Arif Habib Limited is of the view that the rate cuts will perk up the investments but might result reigniting inflationary expectations in long run, which suggests SBP to reassess its easing policy.

Key measures taken for improving liquidity management

Along with the announcement of cut in policy rate, SBP came up with some measures to rejuvenate liquidity management in the economy, effective from 12th October, 2012. According to the circular issued for maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Requirement (SLR);

• Increase in the reserve maintenance period from seven days to fortnight, starting from Friday and ending on Thursday of following week

• All banks (including Islamic banks/branches) have to maintain CRR at an average of 5% of total demand liabilities (including time deposits with tenor of less than 1 year) during the reserve maintenance period

• Daily minimum requirement reduced to 3% from previous 4%. Time liabilities (including time deposits with tenor of 1 year and above) will continue to be exempt from cash reserves.

• An extra 50 basis points (bps) will be charged from banks that approach discount window above seven times in a quarter

Motive behind revision of liquidity requirements

After our discussions with some key personnel of the banking sector, the main motives Arif Habib Limited has come across for the revision of liquidity measures are:

• To let banks improve their cash flow management, and

• To discourage their discounting practices

By increasing the maintenance tenure SBP has given a breathing space to the banks for meeting the CRR/SLR requirements. This leaves banks with no excuse to resort to the discount window on a frequent basis. Therefore, in order to meet their liquidity requirements, some banks might drift to call borrowing.

Impact on Banking Sector

Though this may create a liquidity breather for the banking sector but Arif Habib Limited is not enthusiastic about liquidity excess in the economy as the SBP has kept the average rate of 5% unchanged. Moreover, Arif Habib Limited thinks that less than expected cut in discount rate may create a rally in the banking stocks which have been underperforming the market. Arif Habib Limited reiterates Arif Habib Limited’s liking for NBP, UBL and BAFL.

Impact on the valuations

With 50 basis points decline in interest rates, valuations of our universe companies have improved at an average of 4.6%. The stocks with high leveraging and dividend yield are expected to attract the interest of the investors. Widening gap between risk free rate of investments and strong dividend yield is likely to keep IPPs in the limelight. Following table summarizes the impact on valuations of AHL Universe.

Stocks Target Price Change Up(Down)side Stance PER
  Estimated Current % Potential x
FCCL 12.2 11.5 6.1% 95% Buy 4.8
KOHC 107.0 103.6 3.3% 87% Buy 3.0
PSO 372.8 353.0 5.6% 72% Buy 3.7
BAFL 23.7 22.1 7.2% 48% Buy 5.0
LUCK 194.3 187.1 3.8% 47% Buy 4.8
EPCL 14.0 13.0 7.7% 47% Buy 16.5
NBP 62.8 60.2 4.3% 44% Buy 4.3
UBL 106.0 99.3 6.7% 41% Buy 5.0
SNGP 27.2 25.2 7.9% 38% Buy 9.4
PTC 25.3 23.6 7.0% 30% Buy 8.1
NPL 21.0 20.6 2.1% 24% Buy 2.7
HUBC 56.6 55.2 2.5% 19% Buy 6.6
FFC 136.3 132.1 3.2% 18% Buy 7.7
MCB 214.7 197.3 8.8% 17% Buy 8.1
POL 500.0 492.0 1.6% 16% Buy 7.0
NCPL 22.1 21.7 2.2% 15% Buy 2.9
KAPCO 55.8 55.0 1.5% 12% Buy 6.9
FFBL 42.9 41.5 3.3% 11% Buy 9.0
OGDC 195.8 191.9 2.0% 11% Buy 7.7
INDU 280.2 272.1 3% 9% Buy 6.1
NML 62.1 59.7 4.0% 9% Buy 5.1
ACPL 115.0 112.0 2.7% 7% Buy 5.7
APL 542.5 529.0 2.6% 6% Buy 7.5
PSMC 99.71 94.81 5% -1% Hold 4.0
LOTPTA 6.8 6.3 7.1% -5% Sell n.m
Source: AHL Research

A 50 bps cut in discount rate announced in Monetary Policy – Alfalah Securities Limited

Karachi, October 08, 2012 (PPI-OT): State Bank of Pakistan (SBP) has lowered the discount rate by 50bps to 10.0% in the Monetary Policy Statement (MPS) announced on October 05, 2012.

According to Alfalah Securities Limited, this measure is taken after CPI inflation eased off to 8.79% in September thus, widening the positive real rates. The decline in discount rate has been made to encourage private sector to increase investment in the country and lead to improved economic growth as there has been a continuous decline in investment as percentage of GDP mainly due to crowding out by high government borrowing and higher cost of borrowing.

The deteriorating balance of payment situation due to hefty repayments of foreign obligations, sluggish exports growth, burgeoning import bill and insufficient foreign inflows continue to remain a major concern to economic growth. Moreover, factors like energy shortfall, law and order situation, reduction in fiscal borrowings are required to be resolved to let the loose monetary policy to be effective in boosting economic growth.

The decline in discount rate by 50 bps would have a positive impact on the stock market however, the market has already priced in the expectations of the rate cut. Therefore, Alfalah Securities Limited believes that there may not a significant surge in the stock market post announcement of the monetary policy. Despite that, it would improve the valuations of the stocks and would particularly benefit the highly leveraged companies like textile and cement sector companies and Engro Corporation by easing off the cost of debt on their books.

PNSC, PSO accord to buy vessels – Alfalah Securities Limited

Karachi, October 08, 2012 (PPI-OT): Pakistan National Shipping Corporation (PNSC) and Pakistan State Oil (PSO) plan to jointly purchase specialized vessels for haulage of Liquid Natural Gas (LNG) and Liquid Petroleum Gas (LPG) in addition to jointly handling white oil to save freight being paid by PSO for haulage of around 6 million tons of petroleum products.

According to Alfalah Securities Limited, the agreement also includes increasing the volume of cargo once the PNSC increases its haulage capacity by purchasing more oil tankers which is currently at 3 and the total number of fleet with bulk cargo and container carriers at 10. The joint set up will benefit PSO by minimizing dependence on foreign flag ships and would also reduce its haulage costs by paying in local currency translating into savings around PKR 2.5 billion p.a. as reported in the local newspaper. It will also benefit PNSC in profitability through increased business activity.