What do you call a stock that remains lacklustre for months - often with less-than-a-million turnover - then suddenly catches a spark to become the top volume leader for two straight days? Choose your favourite lexicon, because Lotte Pakistan PTA Limited has been doing the same of late.
The firms stock, previously called PPTA (Pakistan PTA) before it was purchased by KP Chemical Corporation, a subsidiary of South Korean conglomerate LOTTE, last year, saw participation increase to 42.68 million shares on Wednesday - taking the average month to-date volume to 20 million compared with Decembers average of just 4.8 million shares.
Whats driving the rush? Perhaps the fact that the firms foreign delegates have arrived in Pakistan to explore investment opportunities by South Korean conglomerate in various industries of the country.
Lottes aim to enter top ten economic groups of Asia by 2018 can also fuel investment and business activity in Pakistan. The company has successfully established its presence in many Asian developing countries including Korea, India, Vietnam and Indonesia.
Investment by Lotte holds great importance for the firm since the acquirers strong financial health and technological know how will continue to support its operations in future.
After the acquisition, the firm has seen its bottom-line jump manifolds to a profit Rs908 million in third quarter CY09 compared to a loss of Rs929 million in the year ago. Company officials attribute this change to favourable market conditions as well as better management skills and expertise brought by Lotte.
PPTA holds dominant position in domestic petrochemical industry, since it is the only supplier of PTA (Pure Terephthalic Acid) in Pakistan and the chemical produced through it, such as PSF, PET and PFY, are used widely in textile and packaging materials industry. The firm also exports PTA to Asia and Europe.
In addition to chemical industry, Lotte can reap huge gains through investments in the untapped sectors at home including construction, petrochemical, confectionary, food, tourism, hyper department stores, manufacturing and even financial services.
All this might sound too good, but then whats the excitement about when the company officials haven confirmed a thing so far, citing that they are here just to explore. Who will have made the best deal at the bourse during this time; one can only know when the officials finally announce their decisions later this week. Until then, here is a good reminder, if stocks have a life, gossips are their junk food.
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