The Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) decided to raise the policy rate by 100 basis points to 9.75%. The goal of this decision is to counter inflationary pressures and ensure sustainable growth. Since the last meeting on November 19, 2021, indicators of activity have remained robust, while inflation and the trade deficit have risen further due to both high global prices and domestic economic growth. In November, headline inflation increased to 11.5%YoY. Core inflation in urban and rural areas also rose to 7.6 and 8.2 percent, respectively, reflecting domestic demand growth. On the external side,…
Author: Shabbir Kazmi
Performance may range-bound; mini budget in focus Stock Market remained flat throughout the week ended on December 24, 2021 posting a nominal increase of 0.5%WoW to close in at 44,118 points level. This took the cumulative performance throughout CY21 to 0.8% whereas USD adjusted return currently stands at negative 9%. Volumes dried up significantly on WoW bases and average daily traded volume was recorded at 215 million shares as opposed to 265 million shares, down 18.7%WoW. Top performers of the market included: BNWM, HCAR, TRG, PSX and ABOT. The laggards were: ARPL, SFL, GATI, COLG, and JDWS. The performance during…
Decline in trade deficit a sigh of relief; monetary policy eyed After taking a heavy beating during earlier week on the back of high trade deficit for November 2021, the market took a breather on the first trading session of the week. In the second session the news of assistance from Saudi Arabia provided some relief and the market rallied 1.3% during the session. However, towards later part of the week, market set its sight on the upcoming monetary policy meeting and remained under pressure on the expectations of an increase in interest rate and depreciating PKR. Overall, the benchmark…
Overseas Pakistanis have sent the highest-ever US$8 billion remittances during the first quarter of the current fiscal year, registering an increase of 12.5% over the same period last year. The State Bank of Pakistan (SBP) reported that with inflows of US$2.7 billion in September, workers’ remittances continued their strong momentum and have remained above US$2 billion since June 2020. “This is the 7th consecutive month when inflows recorded around US$2.7 billion on average,” said the SBP. In terms of growth, remittances increased 17% in September as compared to the same period last year, while comparing with August inflows it was…
There is no denying to the fact that Pakistan has to boost its exports to contain ever-growing trade deficit. Pakistani exporters have to get acquainted with Harmonized System numbers —known as HS codes. It is anticipated that changes will take effect to the official nomenclature for hundreds of product groups used to classify imports and exports. There exists more than 5,000 product categories developed by the World Customs Organization, an inter-governmental group in Brussels, which are updated every five years or so. In 2022, the biggest changes are coming for electrical machinery and parts, wood, textiles, fish and organic chemicals. The…
Trade has historically been a powerful driver of economic growth and poverty alleviation in Asia. While tariff barriers to trade in Asia are low overall, a new measure of non-tariff barriers suggests those remain high in many Asian emerging markets and developing economies. Unlike tariffs, these barriers include policies that introduce frictions such as licensing requirements or restrictions on trade, payments and exchange foreign currencies. Reducing trade barriers can reignite growth engine. Concerted efforts have to be made to liberalize trade, invigorate sustainable growth and minimize post pandemic scarring. According to a recent research, as detailed in the International Monetary…
Index falls despite IMF staff level agreement news Despite the positive news-flow regarding the IMF staff level agreement, the benchmark index of Pakistan Stock Exchange (PSX) trimmed the last week’s gains on account of unexpected hike of 150bps in policy rate by SBP. In addition to this, the Current Account Deficit (CAD) widened by US$1.66 billion in October 2021 and rose to 4.7% of the GDP from 4.1%, beyond the target of 2-3% for the entire financial year. With negative news-flows engulfing the investors, the confidence remained jittery. At the same time, PKR remained on downward trajectory against US$, hitting…
It is a phenomenon rarely seen in commodity markets, natural gas prices are skyrocketing across the world, Europe and Asia and consumers are paying up to nearly six times more for natural gas as compared to the US consumers. This is being attributed to a lack of the US liquefaction capacity. On Tuesday in New York, front month contracts for Henry Hub gas futures closed above US$5.88 per million BTUs, more than doubling in the year to date. The fuel topped US$6.46 on October 6, marking the highest level since 2014. On top of climbing air conditioning demand in the…
Engro Energy Limited (EEL) signed a Memorandum of Understanding (MoU) with the Sindh Transmission and Dispatch Company (STDC) and the Directorate of Alternate Energy (DAE) to establish a renewable energy park at Jhimpir that will provide electricity to industry at Port-Qasim and Dhabeji. Under the terms of the MoU, Engro will be responsible to build the first hybrid solar PV and wind park in the country whereas STDC and DAE will be responsible for laying the transmission network and facilitate the provision of required land for the project, respectively. The MoU jointly spearheaded by the Government of Sindh was witnessed…
Index to keep rallying on IMF review outcome Extending rally for the fourth consecutive week, the benchmark index closed the week ended on November 06, 2021 at 47,296 points, up 2.33%WoW. It was the highest weekly gain since May 2021 as investors turned optimistic on a possible breakthrough in much awaited IMF review and the incumbent government possibly regaining political capital through Rs120 billion subsidies on key food commodities. Trading volumes also improved with daily average turnover rising to 429.7 million shares during the week as compared to 219.1 million shares a week ago, it was the highest in last…
In Europe, the high nutrient prices have farmers questioning whether to curb plantings. Canadian authorities cautioned that growers may cut back on usage, while in corn powerhouse Brazil, there’s a risk that soaring fertilizer costs and less supply will limit crop yields. The global fertilizer market had already been tightening before plants were forced to cut production on the back of the recent spike in the cost of gas, a key feedstock. That’s sent prices of nutrients crucial for growing staples soaring — to a record in some cases — risking smaller harvests or even more expensive food down the line. Fertilizer plant shutdowns in the UK highlighted how critical the situation is, because it…
Use of phosphate fertilizer is on the rise but its raw material is depleting fast The world faces an imminent crisis in the supply of phosphate, a critical fertilizer that underpins the world’s food supply. Phosphate is an essential mineral for all life on earth and is added to farmers’ fields in huge quantities. But rock phosphate is a finite resource and the biggest supplies are mined in politically unstable places, posing risks to the many countries that have little or no reserves. Phosphate use has quadrupled in the last 50 years as the global population has grown and the…
Interview with Mr Nasib Ahmed Saifi – an exporter of Halal meat [box type=”shadow” align=”” class=”” width=””]Profile: CEO: Anis Associates (Pvt) Ltd. Chairman: Saifigroup of Companies (U.A.E., Pakistan, Thailand, Bahrain & K.S.A.) Chairman: Standing Committee on Halal Food Import & Export – LCCI Chairman: FPCCI (Central) Standing committee on “Halal Meat Import & Export” Chairman: All Pakistan Meat Exporters & Processors Association Former Member: Executive Committee Member – LCCI Patron: The Lahore General Hospital – Lahore[/box] Pakistan has an overwhelming majority of Muslim population as well as enjoys enormous population of livestock. However, country’s share in global Halal meat has…
Index may stimulate on important IMF talks In a shorter than usual week, market remained volatile. The start of the week witnessed across the board selling as investors became jittery on the news that IMF talks remained inconclusive. However, once a clarification was published that negotiations were still going on; market took a sigh of relief on second day of the week and gained 1.9% in a day. The same momentum was carried into third trading day. However, on the fourth day, news flow regarding IMF discussions again caused jitters and a sell-off was witnessed. The benchmark index closed the…
Pakistan and the International Monetary Fund (IMF) are still talking about raising taxes and electricity tariff at the last leg of technical-level discussions to put US$6 billion Extended Fund Facility (EFF) back on track. The virtual talks between the two sides on Friday were extended at the last moment for 8-10 hours as they struggled to narrow down their hard positions to a level that Finance Minister Shaukat Tarin could strike a deal during policy-level talks with the IMF management and mission chief next week. The IMF staff had termed Pakistan’s revenue growth ‘unsustainable’ as it could reverse as soon…
Meteorologists are predicting a cold winter, and it could send international energy prices even higher. Record high natural gas prices have forced some utilities to switch to oil, boosting demand for crude. It is feared that oil prices may witness further rise, though not likely to stay there for long. The spike in oil prices to the highest in years came after OPEC plus decided not to add more barrels than the initially agreed 400,000 bpd monthly. Analysts say that prices could witness further increase. Now, some forecast price may rise to US$100/barrel. The good news is that even if…
Bears rule, results and other news focus of attention Reeling from the previous week’s dejected performance; Pakistan Stock Exchange (PSX) witnessed bearish sentiments throughout the week. The week ended on October 08, 2021, closed the benchmark index at 44,477 points, posting a decline of 395 points or 0.9%. An upsurge in global commodity prices (Coal hit US$238/ton and Brent hit US$83.1/barrel), widening trade deficit and higher inflation kept the investors’ sentiments subdued. In addition to these, the upcoming IMF review and political uncertainties also dampened investors’ sentiments. Cement sector was among the top laggards for the week, losing 5.6%WoW as…
Benchmark lending rate hikes to 16-month high Cut-off yields on Treasury Bills (T-Bills) spiked by up to 49 basis points (bps) in the auction held on Wednesday. It is the first increase of this magnitude during the last 15 months. Most of the bids received by State Bank of Pakistan (SBP) were for three-month tenor. The auction target was Rs800 billion, total bid received amounted to Rs1.171 trillion, but the central bank accepted bid worth Rs731 billion. The increase in cut-off yields was warmly welcomed mainly be the banks evident from the amount offered to buy the papers. Bids of…
Stocks continue gloom-ridden venture Moving along the trend set in motion in previous week, Pakistan Stock Exchange posted negative performance throughout the week. On last trading day of the week ended on 24th September 2021, bench mark index closed at 45,073 points, touching a low of 44,788 points. Over the outgoing week, the index cumulatively lost 1,562 points or 3.4%. A 25bps hike in interest rates by the central bank suggests further hikes in future. Other major news flows during the week included: 1) the central bank tightening regulations on consumer financing and mandating banks to share 5-day import payments…
I am delighted to share these lines from an article by Matthew Boyle. I quote, “Any company that says they fully understand their supply chain is lying,” says Goentzel, who believes that supply-chain practitioners should be certified just like accountants. “It’s time for the profession to wake up. The 20th century was about finance. The 21st century should be about supply chains.” On can recall that just-in-time inventory system embraced by many businesses led to empty shelves and costly bottlenecks. Some of the headlines were never seen before. These included: Stores with no toilet paper, colossal cargo ships run aground in the…
It is heartening to note that the cargo handling activities at the two ports located in Karachi – Port Bin Qasim and Karachi Port have recorded an impressive growth of 25% and 13.72% in FY21. This increase can be attributed to 18% in exports and 26pc rise in the country’s exports and imports, respectively. Reportedly, exports in FY21 rose to US$25.3 billion from US$22 billion in FY20. Imports rose to US$56 billion from US$44.5 billion during this period. This kept goods movement at twin ports alive amid issues like lockdown, port congestion, higher freight charges etc. all over the world.…
Interview Hasan Faraz, Manager, Pakistan Area Customer Experience, Maersk PAGE: What does Customer Experience mean to Maersk? Hasan Faraz: Customer experience for us at Maersk essentially means the holistic perception of what our brand and business stand for. We are keeping our customers at the heart of every decision we take and therefore customer experience revolves around customer-centric mindset, where the end-result is to constantly improve our customers’ satisfaction and resulting in their ever-growing loyalty towards Maersk. Customer Experience is an integral part of all our offerings allowing us to differentiate ourselves in the industry from others. Our Customer Experience teams…
PSX remain under pressure due to high trade deficit coupled with depreciating Rupee Pakistan stock market started the week ended on 10th September 2021 under pressure. Investors awaited MSCI’s decision of downgrading Pakistan to Frontier market status from Emerging Market, resulting in selling in some index heavy stocks. Additional pressure was evident on the market due to high trade deficit for August 2021 coupled with depreciating Rupee. However, on fourth and fifth trading day of the week, market rebounded, led by technology sector and recovered almost all the losses for the week. The benchmark index closed at 47,198 level, up…
The benchmark index of Pakistan Stock Exchange, KSE-100 Index is celebrating its 30 years of existence. The Index is total return market capitalization based, which was created in 1991 with a base value of 1,000 points. Following international best practices the benchmark Index calculation methodology was changed from full market capitalization to free float market capitalization in October 2012. Some other indices have been created since 1991 i.e. KSE-30 All Share and KMI-30, but KSE-100 Index still remains most followed and most reported indicator of stock price movements in Pakistan. The Index comprises of 100 companies selected on the basis…
PSX remains under pressure as of weak market sentiments Pakistan Stock Exchange (PSX) remained under pressure during the week ended 27th August 2021, apart from Monday, where the benchmark index crossed the much anticipated barrier of 48,000 points to close at 48,112. The weak market sentiments, coupled with Rupee depreciation, geopolitical tensions in the region and uncertainty over talks with IMF continued to dampen investors’ confidence during the rest of the week. The index could not sustain the massive selling during week and cumulatively lost 463 points, down 0.97%WoW, to close at 47,137 points. Despite receiving US$2.7 billion inflow under…
Heavy rains and floods in China and Europe have recently dominated headlines around the globe. Most-affected was China’s Henan province, home to one-tenth of country’s total agriculture output and 36% of China’s total primary Lead capacity (used in batteries) and 15% of recycled Lead capacity. Western Europe (Germany, Belgium and the Netherlands) embraced highest rainfall in decades, causing transportation and production disruption in the Rhine valley – a major shipping route for commodities in Northern Europe. Moreover, Rhineland-Palatinate and North Rhine-Westphalia region (areas most hit in Germany) are home to manufacturing facilities of top steel producers. Disruptions in steel supply…
Index regains momentum, covid 4th wave may worry sentiment Pakistan Stock Exchange (PSX) remained range bound during the week ended 13th August 2021 and closed at 47,170 points, down 0.67%WoW. The geopolitical uncertainty kept the investors at bay, evident from 37.8%WoW decline in average daily turnover to 306 million shares. Key data points released during the week included: 1) trade deficit for July 2021 rising to US$3.1 billion, up 85.5%YoY on increase in global crude oil price and 2) remittances remaining stable at US$2.71 billion. The auto numbers released showed PSMC/INDU recording highest ever monthly sales with 15,181/6,715 units, on…
Telecommunication companies and commercial banks have been converging for years. According to some sector experts, banks are witnessing greater competition from telecom operators, which are aggressively entering into financial services, especially in transactional lines of business. Therefore, there is a need to explore the opportunities for complementing each other to attain greater synergy. Retail banks have been eager to push digital channels, such as fixed and mobile, as an important part of their operations, since they started offering services to their clients through the web almost 20 years ago. Today, all banks are facing the digital age with a broad…
The State Bank of Pakistan (SBP) has issued its flagship annual publication, the Financial Stability Review (FSR) for CY20. The Review presents performance and risk assessment of various stakeholders in the financial sector including banks, non-banking financial institutions, financial markets, non-financial corporates and financial market infrastructures. The FSR highlights that CY20 was a challenging year for the financial sector as COVID-19 pandemic triggered deepest global recession since the Great Depression. Besides enormous loss of lives worldwide due to this health crisis of epic proportions, economic activities were severely disrupted. To mitigate the adverse implications, national authorities and central banks around…
As the data centre landscape continues to, the industry is expected to grow exponentially. With growing reliance on digital connectivity, evolve demand is likely to ramp up further due to the imminent rollout of 5G, IoT-linked devices, data localization and cloud adoption. The 5G, the next big thing in Pakistan telecom, is not just about communications. If 4G was for data, 5G would be for device connectivity. The superfast 5G network is expected to create a network of connected devices, enabling millions of applications capable of transforming every sector and every minute event happening across the country. Time is changing…
Stocks end flat, results season in limelight Pakistan Stock Exchange closed almost flat during the week ended on 16th July 2021 at 47,834 points, up 0.6%WoW. The investors preferred to remain on sidelines eyeing Eidul Azha holidays. Average daily trading volumes contracted 4.0%WoW to 467 million shares. Major activity continued to be in the main boards items. Similar muted performance was recorded across all sectors with exceptions being Modarabas (up 57.3%WoW), and Textile Weaving (up 9.1%WoW). Major news flows of the week included: 1) LUCK locking-in contract for setting-up plant for manufacturing of Samsung mobiles in Pakistan, 2) Covid positivity…
Engro story began in 1957 when Pak Stanvac – an Esso/Mobil joint venture – stumbled upon vast deposits of natural gas in Mari while pursuing viable oil exploration in Sindh. Pak Stanvac’s focus was exclusively on oil exploration; however, the discovery shifted the impetus to Esso, which decided to invest in the massive industrial potential of Mari gas field. Esso proposed the establishment of a giant urea plant in Daharki, about ten miles from the Mari gas fields, which would use natural gas produced as its primary raw material to churn out urea fertilizer. Talks with the Government of Pakistan…
Ismail Iqbal Securities (Pvt) Limited (IISPL), with its inception in the year 2004, became a Corporate Member of the Karachi Stock Exchange. IISPL is presently a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL also holds BMR3 in Broker Management Rating and A(-) in Entity Rating given by PACRA. The Company is committed to providing a comprehensive range of products and services to its clients by offering a combination of quality products and bundles of sophisticated financial services and investment opportunities for its individual as well as corporate clients. IISPL…
Upcoming results a welcome boost for investors Weak sentiment coupled with geopolitical tensions in the region and uncertainty over talks with IMF continued to dampen investors’ confidence. Thursday session which saw massive buying by Mutual Funds, to the tune of US$12.7 million, helped the benchmark index to break the losing streak. However, the index could not sustain that level and closed in red in the following session by cumulatively losing 123 points (down 0.26%WoW) to close the week at 47,563 points. The withdrawal of US troops from Afghanistan is creating a vacuum in a high foreign stake region. Added to…
The Federal Budget strategy for FY22 is stated to be pro-growth and spending-led. The total size of the outlay is Rs8.5 trillion which is almost 19% higher as compared to the outgoing year’s budgeted expenditure of Rs7.1 trillion. The increased spending is expected to boost economic activity through total development expenditure of Rs964 billion, which is up 22% from previous year’s budget. The GDP growth target for FY22 has been set at 4.8% which is viable given the estimated growth rate of 3.94% for the outgoing fiscal year. Since primary balance posted a surplus of Rs159 billion during 10MFY21, debt…
Federal Budget FY22, prioritize a mix of growth and stabilization, targets GDP growth at 5.0% with tax collection at PkR5.83 trillion. Also aims at limit FY22 budget deficit to 6.3% of GDP. Incentivizing value added sector and reducing duties may prove a winner for all. GoP’s structural reforms for curing economic ills are quite visible with Refinery policy provisions and Energy sector reforms coming to the forefront. At the same time, reduction in Capital Gains Tax (CGT) for filers to 12.5% from 15% is likely to cheer the development in the coming days. Despite continued strong earnings momentum (3QFY21 earnings…
Index remains range bound amid uneasiness ahead The benchmark index of Pakistan Stock Exchange (PSX) remained range bound during the week ended on 25th June 2021. The investors remained jittery regarding the FATF Plenary meeting which took place from 21st to 25th of this month. Added to this, was uneasiness regarding the ongoing talks with the IMF. The week closed at 47,603 points, down 1.3%WoW. Automobile Assemblers turned out to be among the outperformers, increasing by 0.28%WoW, led by PSMC as the stock rallied in anticipation of tax incentives offered to cars under 850cc being extended to cars under 1000cc…
‘Female Dump Truck Driver Program’ launched in 2017 has received an overwhelming response from the women living in the impoverished area Every progressive nation ensures the inclusion of women in its socio-economic mainstream, because the world cannot have a sustainable future, if this half of its population is not skilled enough to play a productive role in the community. Ideally, women are educated and qualified to earn a healthy income, while the society provides them opportunities to contribute positively. Since, gender-diversity promises optimum utilization of human-resources in a society, the corporate sector also supports female-literacy to engage them in professional…
Budget related news keep investors at bay After an exuberant week, Pakistan Stock Exchange (PSX) started the week with same enthusiasm. However, the benchmark index failed to sustain that level as investors started booking their gains in later sessions. The market closed on 4th June 2021 at 48,212 points, up 2.3%WoW. The average weekly trading volume in KSE-100 declined to 1.12 billion shares, down 9.4%WoW. The overall investors’ sentiments remained positive on account of improving macroeconomic indicators where government’s continued support to construction sector resulted in engineering sector being among the leaders with a performance during the week. Meanwhile, refinery…
In the second half of 2020, Americans, trapped at home by the pandemic, started buying weighted blankets, Crocs, giant fleece hoodies, ring lights and desks at a relentless pace. One toilet paper manufacturer saw a 600% increase in sales over two weeks. Another retailer sold out of a year’s stock of bird feeders in two months. Yoga leggings, milk frothers, air fryers and lawn mowers were crammed into shipping containers in the ports of Asia. Earlier that year, at the start of the pandemic, idled ships could be seen anchored off the Singapore coast, eerie and still. But by the…
Index moves strongly; upcoming mps, budget in the limelight Carrying the momentum from last week, the market started the week ended on 28th May 2021 on an exuberant note on the back of strong economic growth data and the news related to populous budget proposals. The market remained in the green, gaining 1,211 points. Benchmark index closed at 47,126 levels, up 2.64%WoW. The market witnessed a surge in trading volumes as highest intraday volumes were witnessed on Thursday with an exchange of 2,220 million shares (up by 42%) over the previous day highest intra-day volume. Apart from this, the weekly…
With the growing influx of remittances, now touching US$2.5 billion per month and COVID-19 still hindering movement of people, there is a need to further improve delivery system. One of the reasons people has been using Hawala or Hundi system was speedy delivery of money at the homes of recipients, particularly in the rural areas. The COVID-19 pandemic has placed unprecedented restrictions on travel, trade, and economic activity, triggering a global economic crisis. As a result, remittances to developing countries were expected to fall sharply. Families of the overseas workers, many solely dependent on the remittance flows sent from abroad,…
Interview with Mr Arif Nadeem – CEO, Pakistan Agriculture Coalition [box type=”shadow” align=”” class=”” width=””]Arif Nadeem has over 35 years experience in the public sector and is an expert in public policy and administration. Prior to joining Pakistan Agricultural Coalition (PAC) he served as Secretary to the Government of Punjab in the departments of Agriculture, Irrigation and Health. He is known to be an authority on the procedural functioning of federal, provincial and local governments and holds extensive knowledge of Pakistani laws, rules and regulations. He has worked closely with various UN Agencies and international aid organizations (World Bank, ADB,…
Profit-taking witnessed; political, covid fear persist After starting the week on a jubilant note on the back of strong economic data, market lost 1,420 points during last four sessions as political uncertainty mounted with a spat among ruling party’s members. Added to this were increased incidences of COVID-19, supporting a possible lockdown in highly affected areas. Resultantly, KSE-100 Index closed the week at 44,262 points, down 0.99%. Across the board profit-taking was witnessed where engineering sector, despite posting impressive results, remained under pressure, going down by 6.7% during the week. Participation remained low with average daily turnover decreasing to 332…
State Bank of Pakistan (SBP) has unveiled the third five-year Strategic Plan for the development of Islamic Banking in the country. The plan has set headline targets for Islamic banking to be achieved by 2025. These include: 1) achieving 30% share in both assets and deposits of overall banking, 2) boosting to 35% share in branch network of overall banking, and 3) acquiring 10% and 8% share of SMEs and agriculture financing respectively, in private sector financing by Islamic banking. In order to steer the growth of Islamic banking on sound footings, SBP has been providing proactive guidance through issuance…
Lockdown fear, declining bond yields may weaken sentiments Bond yields in the secondary market of Pakistan came down by 5-12 bps, while compared to 11th March 2021 have come down by 12-65 bps. Analysts believe the decline in yields is largely due to rising COVID-19 cases in the country, which may potentially delay any rate increase by State Bank of Pakistan (SBP). The appointment of Shaukat Tarin as new Finance Minister has also added to this belief, as he has been vocal of low interest rates prior to his appointment. Asad Umar, Minister for Planning, Development and Special Initiatives said…
Interview with Arsalan Hashmani – CEO, Hasmanis Hospitals [box type=”shadow” align=”” class=”” width=””]Profile: Mr. Arsalan Hashmani is one of the distinguished entrepreneurs in Pakistan, CEO of Hashmanis Group of Hospitals and Vice President of Hashmanis Medical Welfare Foundation (HMWF). Aside from this Mr. Hashmani is also the Vice Chairman of World Memon Organisation – Global Youth Wing – Pakistan Chapter. He graduated in Accounting and Financial Management from the University of Waterloo, Canada. He acquired master’s degree in Accounting and is a certified Financial Analyst (CFA). With respect to time he gained a considerable experience as he worked with numerous reputable…
Index springs back; result season, tax measures for budget will likely define sentiments The week ended on 9th April 2021 remained volatile due to the concerns on rising COVID cases in the country. Market was down more than 750 points on the first day of the week. However, a sharp recovery in the remaining days helped the market to close at 45,186 points, up 2.0%WoW. Stronger growth forecasts by IMF, and lower than expected inflation reading in March 2021 acted as catalysts to change investors’ sentiments followed by US$2.5 billion inflows from Eurobond. Other news flows during the week included:…
The rally over the past 12 months or so in the equity markets worldwide have largely been fueled by an increase in liquidity. Governments and in some instances central banks have poured in greater liquidity to stimulate economies in the midst of COVID-19 outbreak, which remains mantra of policymakers over the months. According to a report by Topline Securities, it remains difficult to gauge/quantify by how much has the liquidity increased in a country like Pakistan due to significant presence of an undocumented economy. That brokerage house believes changes in M2 may provide a good proxy for an analysis. M2…
At its meeting on 19th March 2021, the Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) decided to maintain the policy rate unchanged at 7 percent. The MPC noted that since the last meeting in January 2021, growth and employment have continued to recover and business sentiments have further improved. Looking further ahead, this year’s upcoming round of wage negotiations, next year’s budget, and the path of domestic energy prices and international commodity prices may have an important bearing on the inflation trajectory. The MPC will monitor these developments carefully and react to them appropriately when needed. While…
PSE index ends on strong note and likely to be build up Pakistan Stock Exchange (PSX) started the week ended on 19th March 2021 on a strong note, after the announcement of Senate election results on the last trading session of the earlier week, rallying 2.23% on the first trading session. During the following trading sessions benchmark index remained volatile, where bullish sentiment from political victory of incumbent government was given a tough face-off by corporate income tax exemption withdrawals and potential inflationary pressures from electricity rate hikes — both necessary to unlock third tranche of IMF’s EFF facility (payment…
Accelerated by the pandemic, the digital future is coming at us faster than ever before, and maybe faster than we can imagine. There is a need to explore the possible consequences—the good, the bad, and the gray. For millions, technology has been a lifeline, changing the way people work, learn, shop, and entertain themselves. In a year like no other, it has spurred game-changing digital shifts. Governments moved quickly, using mobile solutions to provide cash assistance; financial technology has helped the survival, and in some cases, growth of small- and medium-sized businesses; and the first national digital currency, in The…
Market stays dull but likely support for govt come positive The benchmark index of Pakistan Stock Exchange closed the week ended on 5th March 2021 at 45,837 points, almost flat. The week was marked by extreme volatility on the back of political drama surrounding Senate elections. The market registered major uptick in initial half of the week owing to anticipations regarding the elections. However, the index went downhill following the news of PTI’s Minister for Finance and Revenue, Dr. Hafeez Sheikh being unsuccessful in his bid to become a senator from Islamabad, losing to the former prime minister Yousuf Raza…
Oil prices declined after climbing to the highest in more than a year. Prices fell for a second day on Friday, retreating further from recent highs, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages. US energy firms during this past week cut the number of oil rigs operating for the first time since November 2020. Brent crude futures ended the session down 1.6% at US$62.91/barrel, while US benchmark, West Texas Intermediate (WTI) fell 2.1%, to settle at US$59.24. For the week, Brent gained about 0.5% while WTI fell about…
Index posts smidgen gain likely to remain shaky During the week ended on 19th February 2021, Pakistan Stock Exchange (PSX) remained volatile and closed the week at 46,228 points, posting 0.92%WoW gain. This was in continuation of the momentum witnessed a week ago and as a result of staff-level agreement with International Monetary Fund (IMF) for the release of US $500 million. Nevertheless, profit-taking by investors kept the Index under pressure during the week. Major news flows for the week included 1) commencement of COVID vaccine registration for citizens aged 65 and above, after successful vaccination of around 50,000 frontline…
In Pakistan, Islamic banking has registered substantial growth over the last few years. Along with increase in number of branches, windows and diversity of Islamic banking products and services, the size of Islamic banking balance sheet has improved significantly. The growth continued during FY20, as the assets and deposits of the Islamic banking grew by 21.4 percent and 22 percent, respectively. Due to substantial growth, Islamic banking has become systemically important as it presently enjoys share of 15.3 percent and 16.9 percent of the overall banking assets and deposits, respectively by 30th June 2020. Financing to Deposit Ratio (FDR) of…
Qatar witnesses a prosperous start to 2021, first scoring a major political goal by restoring diplomatic relations with Saudi Arabia and ending its almost 4-year long embargo. Following a political breakthrough come an unexpected revenue bonanza, which saw Doha happily riding the waves of spiking Liquefied Natural Gas (LNG) prices in Asia. The combination of both developments – Qatar casting away its pariah state and probably playing a more nuanced role as it finds itself between Saudi Arabia, Iran and the still-skeptical UAE, as well as its low-cost LNG production becoming a staple diet of North East Asian LNG demand…
Index surges amid profit-taking; positive momentum may prevail in near term The benchmark Index of Pakistan Stock Exchange (PSX) closed the week ending on 4th February 2021 at 46,906 points, up 1.12%WoW amid volatile sessions, with heavyweight E&P sector supporting the Index, but profit-taking was witnessed in select scrips. E&P sector turned out to be the top performer during the week on rising oil prices and removal of dividend distribution cap on MARI. Average daily trading volume for the week declined to 675.4 million shares, from 932.5 million shares a week ago. The key news driving the market included: 1)…
In an attempt to address circular debt issue, the Government of Pakistan (GoP) has increased electricity tariff by Rs1.95/Kwh or 15%. This is likely to translate into additional recoveries of Rs200 billion. Potential agreements with IPPs is also likely to result in savings of Rs800 billion over the next 20 years (annual savings of Rs40 billion), according to government calculations. Negotiations and termination with/of government generation companies (GENCOs) are expected to generate savings of Rs6 trillion over the next 30 years (annual savings of Rs200 billion), as per news reports and Ministers’ press conference. Analysts believe most of the savings…
The State Bank of Pakistan (SBP) in its latest Monetary Policy Statement (MPS) has kept the Policy Rate intact at 7.0%. The Policy Rate has remained unchanged since 25th June 2020, when the SBP had reduced the Policy Rate by 100bps. The SBP, for the first time, has also provided forward guidance to facilitate policy predictability and decision making by economic agents. The Monetary Policy Committee (MPC) expects monetary policy settings to remain unchanged in the near term till economic recovery becomes more durable and economy returns to full capacity. If there are requirements for adjustments in the Policy Rate,…
Volatility witnessed; sbp forward guidance, result season may comfort investors Pakistan Stock Exchange witnessed volatility throughout the week ended on 22nd January 2021. The week closed at 45,868 level after gaining 1,433 points or 3% month-to-date. Lackluster news on macro levels led to profit taking during the outgoing week, offsetting the result season driven exuberance. Major news driving the market included:1) hike in unified base tariff of DISCOS by Rs1.95/KWh as against a proposal of Rs3.34/KWh; likely to yield impact of Rs200 billion impact, adding to inflationary pressure in the upcoming months, 2) decision to disconnect gas supply to captive…
According to the latest data released by State Bank of Pakistan (SBP), overall deposits of Pakistan banks have grown by 17% to Rs17.1 trillion in 2020. The growth is the highest in 4 years and is better than 10-year average of 13%. Growth in Deposits has been fueled by higher Remittances (+17.5%YoY in USD terms and 27.5%YoY in PKR terms during 11MCY20). It is also fears that the lack of business activity due to COVID-19 may have resulted in increase in bank deposits. Investments have grown by 31% to Rs11.5 trillion in 2020. At the start of the year high…
Interview with Mr Irfan Wahid — Chief Executive Officer, Global Financial Solutions (GFS) Builders & Developers [box type=”shadow” align=”” class=”” width=””]Global Financial Solutions (GFS) Builders & Developers is a projectized organization offering a full range of construction services and investment management while maintaining a strong foundation of trust and mutual respect generated through positive relationship with clients, architects, engineers, sub-contractors and suppliers. A company-wide policy encouraging shared performance responsibility ensures the highest degree of professional service and result on all projects. GFS has been into the field of building and construction/land development for more than 15 years. GSF has built…
Bullish sentiments likely to attract investors With the joy of a new year following through the trading floor for the first week of the year 2021 and the January effect in full steam (where investors re-allocate portfolios, driving volumes higher), the benchmark index of Pakistan Stock Exchange (PSX) gained 2.7%WoW to close at 45,654 points continuing the uptrend witnessed during the tail end of CY20. Additional catalysts were in the form of significant headway on circular debt resolution efforts initiated by the Government of Pakistan (GoP) in August 2020. The surprise crude supply cut by Saudi Arabia lifted crude benchmarks…
It has truly been a year like no other, with the pandemic dominating not just every news cycle but each of our lives. From work to family life, where we went, and what we did, nothing was untouched by Covid-19. But as people got used to phrases like ‘self-isolate’ and ‘social distancing’, there were plenty of other news too. The year began with a new virus originating from Wuhan, China. Wei Guixian, a 57-year-old shrimp seller, is thought to have been the first person infected. “Every winter I always suffer from the flu,” she later told Chinese media. “So I…
An inquiry report of the Competition Commission of Pakistan (CCP) has found massive profit-taking due to cartelization by the cement sector. The inquiry report was finalized for the cement units in the North Zone of All Pakistan Cement Manufacturers Association (APCMA) as the Sindh High Court had restrained the CCP from using material collected from the raids at offices of cement companies in South Zone (Sindh). The inquiry report has inputs from the Federal Investigation Agency (FIA) regarding forensic audit of all the electronic evidence collected from the offices of cement companies and the APCMA head office, Lahore. The names…
Bulls rule persist and to carry on with The week ended on 24th December 2020, the rollover week started on a negative note on declining crude oil prices and concerns regarding a potentially more dangerous strain of Covid-19 coupled with increased border tensions. However, towards mid of the week, market went into a positive on the back of another current account surplus for November 2020 as well as slight improvement in oil prices. The benchmark index closed the week at 43,417 points, down 0.74%WoW. Oil and gas exploration and refineries were among the major laggards due to declining oil prices.…
Cross-border paperless trade has great potential to not only grow trade competitiveness, but also to address new challenges associated with e-commerce and the digital economy. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with the United Nations Commission on International Trade Law (UNCITRAL) and the Enhanced Integrated Framework (EIF) have launched an interactive guide to support readiness assessments on cross-border paperless trade. The Online Readiness Assessment Guide for Cross-border Paperless Trade is designed to support countries in the region to conduct self-assessments of legal and technical readiness on cross-border paperless trade. With the…
The shipping industry is one of the most traditional sectors of the economy. As the time passes and technology improves the shipping industry also goes through transformation. Even today, digitization in the shipping industry is treated occasionally and is characterized by a lack of a holistic approach to its transformation. According to Ms. Maria Gourtsilidou, Senior Editor of Research and Data Analytics at the CEOWORLD magazine, the digital transformation of the shipping industry is significantly contributing to improving the operating costs of the ships. The total relative cost of the industry is estimated at US$100 billion worldwide with an ever-increasing…
Bulls remain in the ring; political noise unlikely to sour sentiment Climbing for a third consecutive week on the back of stable participation (avg. daily turnover up 2.5%YoY), the benchmark index of Pakistan Stock Exchange (PSX) was up 0.6%WoW to close at 42,470 points on 11th December 2020. Key news flows affecting market included: 1) pronounced rise in political noise, 2) HUBC reportedly accepted the proposal of the Power Division, a major reduction in claimed CPP payments from the base plant in return for approval for PPA with KE for purchase of 600MW of Coal power by 2024 and commitment…
Pakistan’s leading brokerage house, Topline Securities has revised its earnings forecasts fertilizer companies operating in the country. The upward revision has come on the back of: 1) higher than expected Urea offtake during first ten months of the current calendar year, 2) impact of Gas Infrastructure Development Cess (GIDC) review petition and 3) detailed review of first nine months accounts. Urea offtake is likely to beat expectations; the brokerage house expects the offtake to rise to 5.8 million tons, in line with last five years average offtake as against its earlier estimate of 5.5 million tons. To note, it had…
The onset of the winter season is likely to have adverse impact on cement sales in November 2020 due to local dispatches likely to decline up to 27%MoM. Northern region is expected to witness a contraction up to 30%MoM, while sales in the South are likely to fall max by 15%MoM. The sequential decline is likely to be higher than the past two years’ average decline of 15%MoM during the month of November. It is believed because of restricted development work in the Northern region due to early onset of the winter season and increasing number of COVID-19 cases. That…
Transit of goods through Southeastern Chabahar port of Iran has increased significantly in recent years due to offered incentives and the development of the port’s infrastructure. Loading and unloading figure have reached two million tons, while it was merely 200,000 tons just a few years ago. The port aimed at attracting regional markets that include India and Afghanistan as well as the Commonwealth of Independent States (CIS). Iran’s Ports and Maritime Organization (PMO) Deputy Head for Ports and Economic affairs said, transit of goods through Southeastern Chabahar port has increased significantly in recent years due to offered incentives and the…
Gas and Oil first OMC to offer electric vehicle chargers in Pakistan The company set to 1,000 retail outlets across the country Deregulating the market likely usher into bright prospect Concerted effort needed to push investment in the sector for revenue boost Interview with Mr Khalid Riaz – CEO, Gas & Oil Pakistan Limited [box type=”shadow” align=”” class=”” width=””]Khalid Riaz, Chief Executive Officer of Gas & Oil Pakistan Limited (GO) is a veteran of the retail and oil transportation sector with rich experience in the field spanning more than 35 years. Khalid Riaz comes from a traditional family of Qabula Sharif, which…
Market ends up; IMF plan progress, oil price movements and covid fear likey sway sentiments Pakistan Stock Exchange (PSX) began the week ended on 27th November 2020 on negative sentiment with government mulling over measures to contain rising cases of COVID-19, hinting a complete lockdown. To add, IMF hinting at government’s need to undertake unpopular measures (electricity and gas rate hikes, targeting higher tax collection, etc.) to resume the IMF program further dampened the sentiments. Decision of State Bank of Pakistan (SBP) to leave interest rate unchanged at 7% resulted in some exuberance among investors. A rise in international oil…
Demand for gold dropped to 892.3 tons in Q3 – its lowest quarterly total since Q3 2009 – as consumers and investors continued to battle the effects of COVID-19. At 2,972.1 tons year-to-date (ytd) demand is 10% below the same period of 2019. Although, jewellery demand improved from the Q2 record low, the combination of continued social restrictions, economic slowdown and a strong gold price proved burdensome for many jewellery buyers, demand of 333 tons was 29% below an already relatively feeble Q3 2019 demand. By contrast, bar and coin demand strengthened, gaining 49% YoY to 222.1 tons. Much of…
In Pakistan the three most contentious issues facing the farmers are: low productivity, distress selling of produce and huge post harvest losses. All these culminate at one point, low return to farmers, which does not allow them to undertake cultivation on modern lines. As a result, the country has not been able to achieve food security. This can be best understood if one examines what has happened in 2020. The country was been forced to import wheat and sugar, after witnessing a shortfall in output. Import of these basic commodities caused erosion in foreign exchange reserves of the country, payment…
Bulls lead; market closely track US election outcome, but covid cases may trigger risk off sentiment Pakistan Stock Exchange (PSX) started off on a weak note, with the market participants pricing in rising domestic COVID-19 cases and uncertainty on the US election outcome. The benchmark index shed 1.94% on the first trading session of the week. Softer than expected inflation numbers, encouraging volumetric offtakes in Cement and OMC sectors, electricity package for the SMEs and general industry and rebound in global markets turned the tide. The Index registered 3.5% gain on the second trading session, paring all previous day losses.…
In 1965, the Company was incorporated as Esso Pakistan Fertilizer Limited, to manufacture and market fertilizer. In 1968 urea plant was commissioned; which marked the largest foreign investment in private sector in the history of Pakistan. In 1978 Esso Pakistan Fertilizer Company Limited was renamed as Exxon Chemical Pakistan Limited. In 1991 Exxon divests its equity from fertilizer business globally; the Company was renamed as Engro Chemical Pakistan Limited through an employee led buyout. In 2005 annual production capacity was increased to 975,000 tons from 850,000 through de-bottlenecking of base plant. In 2007 construction of world’s largest single-train urea plant…
Easypaisa is Pakistan’s first mobile banking platform launched in 2009, the only GSMA mobile money certified service in the country. Initially launched as a money transfer service, Easypaisa empowers underserved masses by bringing convenience and freedom to their lives, and has today become an icon in money transfers, synonymous with convenience and reliability. Easypaisa was launched in 2009, and began with just 4,000 outlets across the country. At present it has more than 84,000 outlets catering more than 7 million active users. Initially, it began with just money transfer through USSD codes sent through conventional mobile phones. Now Easypaisa is…
Sateesh Balani is currently working with Ismail Iqbal Securities as Director Research and possesses a decade of diversified finance and investment related experience. Prior to Ismail Iqbal Securities, he has worked with HBL Asset Management as Head of Research where he was part of investment committee managing fixed income, equity and asset allocation portfolios. Prior to HBL AML, he has worked with Engro Corporation (and its energy holding company) where he was responsible for making feasibility & analyzing potential business ventures. He has also worked with Elixir Securities for four years in equity research and covered energy and industrial sectors.…
Index rallies; FATF and companies outcome likely to keep volumes buoyant Battling significant headline risk from the FATF plenary meeting vote for Pakistan’s status on the grey list, the benchmark index of Pakistan Stock Exchange (PSX) rallied 2.7%WoW. Major earnings beats across Banks, Cements and Fertilizers provided fuel to the rally. For the week ended 23rd October 2020, the index closed 41,266 points. Volume leaders during the week were: HASCOL, UNITY, KEL and TRG. Stocks leading the index higher included, UNITY, ATRL, CHCC, while laggards included: GATU, ABOT and EPCL. Volumes spiked 57.3%WoW where major forces driving investor sentiment were…
Interview with Ms. Aruna Hussain — Managing Director, Maersk Pakistan The first female CEO leading a multinational logistics company in Pakistan Maersk Pakistan’s progress rely on constant care, humbleness, uprightness, right team and image building For growth of country’s ports we need to keep focussing on improving both the cost of doing business and ease of doing business Gender equality gap still exists, but women can readily join supply chain and logistics fields [box type=”shadow” align=”” class=”” width=””]Ms. Aruna Hussain is an experienced entrepreneurial leader with exposure to several international markets that include Pakistan, United Kingdom, Australia and the Middle…
Advanced Lab provides full range of routine and special tests at highly economical rates. Interview with Prof. Dr. Rafiq Khanani — Managing Director, Advanced Laboratories Private Limited [box type=”shadow” align=”” class=”” width=””]Dr. Rafiq Khanani is a pioneer in the development of clinical diagnostic services in Pakistan. He is a Founding Director of Dow Diagnostic Reference and Research Laboratories, Dow Institute of Hematology and Blood Transfusion, Dow Radiology Institute, Institute of Biological and Biomedical Sciences, and Citilab Diagnostic Centre. Advanced Laboratory Diagnostic Centre is a refreshed commitment by the founder of Citi Diagnostic Centre Professor Rafiq Khanani and his team. Citilab…
Cherry-picking likely for short span as new covid fear, anti govt rallies may Killjoy With higher than expected inflation and heightened political tension, after announcement by opposition parties’ alliance to hold rallies across the country, trading started the week on a negative note, down 2.5% at the close of first session of the week. After remaining jittery in the second session, recovery was finally witnessed during third trading session and the sentiment remained positive till close of the week, on 9th October, last trading day of the week index close at 40,798 points, up 1.8%WoW. Top performers of the outgoing…
Reduction in interest rate is a must for bringing down cost of doing business in the country On 21st September 2020, State Bank of Pakistan (SBP) announced to keep the policy rate unchanged at 7 percent. It was announced that as compared to the time of the last announcement in June 2020, business confidence and the outlook for growth have improved. This reflected the decline in COVID-19 cases in Pakistan and the easing of lockdowns, as well as the timely stimulus provided by the Government and SBP. At the same time, the forecast for inflation was raised slightly, primarily due…
Market likely to snap out of rollover week as selling pressure eases Happenings over the political front together with rollover and rising COVID-19 cases kept the week ending on 25th September 20202 under pressure. The benchmark Index of Pakistan Stock Exchange recorded a loss of 803 points to close at 41,701 points, down 1.89%WoW. The market activity also witnessed contraction, with average daily trading volumes falling by 13.4%WoW to 465 million shares. Top gainers of the week were: ILP, SHEL, DAWH, ATLH and NCL, while laggards included TRG, ANL, OGDC, COLG and PPL. The activity was concentrated in speculative stocks,…
During FY20 Pakistan received record remittances. On a cumulative basis, workers’ remittances increased to a historic high level of US$23.120 billion during FY20 as compared to US$21.739 billion received in FY19, witnessing a growth of 6.4% over Despite economic slowdown caused by the COVID-19, the remittances during March-June quarter of FY20 increased significantly helping the country get more than expected inflows. Workers’ remittances rose by a significant 50.7% during June 2020 to reach record high of US$2.466 billion as compared to US$1.636 billion received in June 2019. The inflows June grew significantly as compared to May when the country had…
Pakistan Stock Exchange (PSX) held a gong ceremony to mark the successful book building and listing of Pakistan Energy Sukuk II amounting to Rs200 billion. The book building process was managed by Pakistan Stock Exchange. The gong striking ceremony was held to formally mark this exciting event of the first ever debt issuance through book building and listing of the debt issue at the Exchange. The Advisor to Prime Minister on Finance & Revenue, Dr. Abdul Hafeez Shaikh graced the occasion with his presence as the Chief Guest at the event. Also present were Aamir Khan, Chairman, Securities & Exchange…
Banks, cements keep index moving up; coming week may be volatile Treading on gains posted in the earlier weeks, the benchmark index of Pakistan Stock Exchange (PSX) inched up 1.21%WoW to close at 42,531 pointed for the week ended on 11th September 2020. The rally supported by prominent performance of heavy-weights Banks and Cements. Banks came on the investor’s radar, being trading cheaply as valuations stretched elsewhere. Cement witnessed run up as Prime Minister announced Karachi uplift package of Rs1.1 trillion. E&P sector witnessed erosion in value on declining international prices of crude oil and cabinet ratifying CCoP’s decision to…