84 listed companies report huge losses in four days

KARACHI - Despite an unprecedented boom in the stock market, about 84 companies listed at the Karachi Stock Exchange have shown considerable losses in their financial results. By May 2, 2008, a total of 213 companies have announced their results out of which 84 companies have reported losses for the year, The Nation learnt on Friday.  As many as 29 companies in Textile sector are heading the list of those companies on KSE who have posted huge losses followed by six companies in cement sector. Moreover, two companies each from Auto sector and banking sector also witnessed losses in their financial results in the quarter ending March, 31, 2008. However, so far four banks including Bank of Punjab witnessed huge losses in their financial results. PTCL topped the loser list with the total loss of Rs6.6 billion followed by Bank of Punjab which witnessed loss of Rs3.09 billion in the aforementioned quarter. Despite the boom seen in the stock market during the past couple of months, the number of listed companies, which have unveiled huge financial losses, is a point of concern and it will affect the status of the market. Interestingly, only three companies out of 213 have issued dividends/right shares. Umar Ayaz analyst at JS Global attributed the huge losses that textile sector witnessed in the quarter ended on March 31, 2008, to the fall in the exports and soaring prices of cotton coupled with the higher energy costs. He said since the removal of quota regime, Pakistan's textile sector has been facing intense competition from neighboring countries on the export front. Moreover, rising input and energy costs coupled with higher financial charges have deteriorated overall sectors performance in the last couple of years. Banking sector has posted 17 percent decline in their first quarter, which is contrary to the expectation of analysts, as they were of the view that banking sector will again show the profitability. Decline in the banking sector has put too much pressure on the several banks, as it can be seen in the decline of the share prices of several banks .i.e. National Bank, Bank of Punjab, Habib Bank, Faysal Bank, Allied Bank and others. Bank sector is one of the leading sectors of the stock exchange in terms of contribution in the total capitalization of the markets, if the banking sector not performs well, it will directly affect the sentiments of the market, analysts said. Analysts were also concerned about the losses seen in the cement sector, as the sector is also among the leading sectors of stock exchange. However, analyst did not show any concern about the huge decline in the textile sector owing to its minimal contribution in the market. At present Karachi Stock Exchange has more than 600 listed companies. During the past few months the stock market has managed to boost up its capitalization, on May 3, the total capitalization stood at Rs4.585 trillion.

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