Fauji Fertilizer Bin Qasim Ltd., Pakistan’s only producer of di-ammonium phosphate, reported an increase in second-quarter profit because of higher prices.
Net income rose to 913.4 million rupees ($10.7 million), or 0.98 rupee a share, in the three months ended June 30, from 485.3 million rupees, or 0.52 rupee, a year ago, the Rawalpindi- based company said in a statement to the Karachi Stock Exchange today. Revenue fell to 5.4 billion rupees from 9.1 billion rupees.
The price of di-ammonium phosphate rose to 2,600 rupees for a 50-kilogram bag, from 2,000 rupees in the previous quarter, according to Invest Capital & Securities Ltd. in Karachi.
The company also booked a profit of 122 million rupees from a joint venture compared with a loss of 315.2 million rupees a year ago, according to the statement. Fauji Fertilizer Bin Qasim has a joint venture with a Moroccan phosphate company.
Fauji Fertilizer Bin Qasim, which has risen 15 percent this year, rose 1.4 percent to 30 rupees as of 1:42 p.m. local time, on the Karachi Stock Exchange. It plans to pay a mid-year cash dividend of 1.30 rupees a share.
Fauji’s profit in the six months ended June 30 rose to 1.72 billion rupees from 497.9 million rupees a year ago, according to the statement. Sales fell to 11.9 billion rupees from 14.9 billion rupees a year ago.
To contact the reporter on this story: Khurrum Anis in Karachi at Kkhan14@bloomberg.net
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Tuesday, July 27, 2010
Tuesday, June 30, 2009
Chinese stimulus cash is inflating new stock market bubble, officials warn
Half of the 5.8 trillion yuan (£522bn) of stimulus loans issued by Chinese banks have flowed into the country's stock and property markets, inflating new bubbles, according to senior Communist officials.
Under orders from the government, China's banks have flooded the economy with new credit this year, advancing more money in the first six months than the total for 2008.
It is the biggest wave of money since the People's Republic of China was founded in 1949. The loans are part of a stimulus package to spur domestic investment and consumption and help the economy through the financial crisis.
However, a significant proportion has been diverted into shares and property, with the Shanghai Stock Exchange rising 60pc since January.
Several economists believe a large part of the government's 4 trillion yuan state aid package has also failed to reach the "real" economy.
Wei Jianing, an economist at the Development Research Center of the State Council, said 20pc of the new bank loans had reached the stock market, and 30pc had been invested in property.
According to the Chinese state media, Wei said the huge flow of money could fuel further asset bubbles. However, he was careful to note that this was not yet the view of the State Council, China's ministerial cabinet.
“When funds are circulating and swelling inside the financial system, instead of servicing the real economy, we see this as a sign of bubble formation,” said Wei. “Now the rapidly circulating funds can easily boost the stock market and produce new financial bubbles, and lift real estate prices as well.”
Another official, Cheng Siwei, the vice-chairman of the standing committee of the National People's Congress, said around 2.4 trillion yuan of the 4.58 trillion lent in the first three months of the year had been used for "real" investment, while the remainder was used for speculation.
However, Cheng also predicted that the Chinese economy will grow by 8pc this year and by more than 9pc next year.
The lack of supervision over the enormous sums being advanced has started to trouble the Communist Party, which issued a stern commentary through the People's Daily, its official mouthpiece.
"Extraordinary times call for extraordinary measures," said the commentary. "However we must at the same time improve the lending structure and guard against risks to ensure that lending supports good quality economic development".
China's bank regulator has already urged commercial banks to scrutinize borrowers to ensure loans aren't misused.
One factor that might inspire a rout in the market is the 3.2 trillion yuan of shares that will emerge from lock-up periods this year, a 53.1pc increase in value terms on the sum last year, according to the Chinese central bank. The People's Bank of China cautioned that the market would have to be watched closely for any impact.
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