KARACHI: A day after Dost Steels Limited informed the Securities and Exchange Commission of Pakistan (SECP) of its lack of knowledge on why its share price has risen by 30% in the last 2 weeks, the company notified the stock exchange of its plan to expand its output.
The company wrote to the SECP on December 31 that it has no idea why its share price has been recently volatile. This information was made public through a notice to the Pakistan Stock Exchange (PSX).
“We have no idea as to why there has been volatility in the volume and price of the shares of the company at the PSX. We are also not aware of any speculation/rumours,” stated the company letter to the SECP.
However, the company, in another notice sent at 3pm and merely hours after the previous one, informed the PSX that “the expected date of commercial operations of the company is around 120 days from the date of release of Rights issue money, received by the company. Under this scenario this shall fall sometime during May 2017”.
The company was referring to its earlier notice to the PSX on December 20 in which it informed the market that the company has credited the Right Shares of Dost Steels into respective accounts or sub accounts of the shareholders in the Central Depository System.
The KSE-100 index closed at 48,827, up 587 points or 1.22% on Tuesday. Dost Steels share price closed at Rs13.29, up 1.3% compared with its last day closing price.
According to the company website, Dost Steels wants to tap the growing construction market of Pakistan, which is continuously showing strong growth due to the improving macroeconomic indicators. The company is especially eyeing the upcoming projects under the China-Pakistan Economic Corridor (CPEC).
The company’s head office is in Lahore but its mill is situated in Phoolnagar, a city in Pattoki Tehsil of Kasur, about 58 kilometres from Lahore. The mill is a Greenfield automatic plant with an initial capacity of 350,000 tons per annum which will produce hot rolled, high tensile, deformed steel bars.
Analysts expect strong steel demand in coming years mainly due to the strong growth in construction industry and mega infrastructure projects related to CPEC.
Published in The Express Tribune, January 4th, 2017.
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