The flagship company of the Arif Habib Group, Arif Habib Corporation Limited (AHC), which emerged from its beginnings in the financial sector, has now been re-classified by Dow Jones and FTSE Classification Benchmark (ICB) Advisory Committee in the chemical sector.
Consequently, the Karachi Stock Exchange will apply the sector change with effect from 31st December 2010. According to a press release, the company was an equities brokerage company when it got listed in the year 2001, however, over the last decade it has diversified its strategic investment portfolio into high growth sectors such as chemicals (fertilisers), industrial materials, food products, financial services, construction materials, banks and Non Life Insurance and in addition it has investments in a secondary market portfolio.
Of the total investments valued at Rs 22.87 billion as at June 2010, Rs 15.46 billion or 67.6 percent was in the Chemical (fertiliser) sector, which had generated 71 percent of the company's revenues. The company is trading at a PE multiple of 4.6 times, which is the norm for the financial sector; however, the chemical sector is trading at a multiple of 12 times.
Those investors who had subscribed for 100 shares at the time of its IPO in 2001 at Rs 80 per share now have total 8,332 shares (through bonus issues) and have received 490 percent in cash dividends, making their total return to date 3756 percent despite the lower multiple that its price has been trading. "It should be expected that the market price will adjust to the chemical sector multiple in due course", the company said.-PR
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