Lately, Pakistan Stock Exchange (PSE) has been creating records on daily basis. During the past week ended on December 06, 2024 the benchmark index, registered its highest ever weekly point gains of 7,697 and market closed at a record high of 109,054 points, up 7.6%WoW. The bullish momentum was fueled by inflation recorded at 4.9%YoY, lowest in nearly six and half years, fueling expectations for continued monetary easing in the upcoming Monetary Policy Committee scheduled for December 16, 2024. During the week under review, major contributing sectors to this rally were commercial banks, followed by Fertiliser, and Oil & Gas…
Author: Shabbir Kazmi
PSX benchmark index up 7.6pc wow Pakistan Stock Exchange (PSX) continued its bullish momentum throughout the week, leading to a major increase in the benchmark index, registering its highest ever weekly point gains of 7,697 and market closed at a record high of 109,054 points, up 7.6%WoW on Friday, December 06, 2024. The bullish momentum was fueled by November 2024 inflation recorded at 4.9%YoY, lowest in nearly six and half years, fueling expectations for continued monetary easing in the upcoming Monetary Policy Committee scheduled for December 16, 2024. Major contributing sectors to this rally were commercial banks, followed by Fertilizer,…
As court suspends tax on ADR shortfall, banks turn to low-interest lending to meet December 2024 deadline According to media reports, Islamabad High Court has temporarily barred the government from collecting an additional tax of up to 15% from commercial banks, as about a dozen financial institutions approached the court to suspend the tax, they were liable to pay after failing to meet the mandatory private sector lending targets in the outgoing year 2024. The average advance-to-deposit ratio (ADR) of the banks operating in Pakistan recently stood at 38%, significantly lower than the mandatory 50%. Accordingly, banks were projected to…
Cement sector is heavily leveraged as well as energy intensive. The recent reduction in policy rate and the decline in global oil prices bodes well for the sector. First quarter results are expected with some pleasant surprises for investors. However, this may not translate into any reduction is cement price or increase in dividend payout. Lucky Cement (LUCK) is expected to post unconsolidated earnings of PKR5.6 billion (EPS: PKR19.1) for 1QFY25 as against PKR6.9 billion (EPS: PkR23.6) for the same period last year, reflecting a decline of 13%YoY. The decline is primarily attributed to lower gross margins, which are expected…
MLCF is also taking interest, FFC has upper hand to take possession of Mianwali based firm Fauji Fertiliser (FFC) has expressed its intention to acquire controlling interest in Agritech (AGL), a fertiliser plant located at Mianwali, Punjab. This marks FFC’s second announcement to expand its fertiliser footprint following the announcement to amalgamate Fauji Fertiliser Bin Qasim (FFBL) through a share swap (FFBL is an associate company in which FFC owns 49.88%). If FFC acquires AGL, it will also expand FFC’s footprint in the northern region of Pakistan. It may also be recalled that Maple Leaf Cement Factory (MLCF) had also announced to…
PSX benchmark index records highest-ever mark Pakistan Stock Exchange (PSX) maintained its bullish momentum throughout the week ended on November 15, 2024, with the benchmark index closing at a record high 94,763 points, marking a 1.6%WoW increase, achieving its highest-ever closing. The bullish momentum continues on the back of accelerated pace of monetary easing by State Bank of Pakistan (SBP) and IMF’s visit with a focus on structural reforms. During the visit, the IMF mission held discussions with local authorities, focusing on the external financing gap and the Federal Board of Revenue (FBR) revenue collections. FBR officials assured the IMF…
AKD Banking universe is set to announce its 3QCY24 results. The brokerage house expects profit to increase by 3%YoY to PKR94.4 billion as shrinking NIMs and high provisioning cost to be overshadowed by higher non-core income and growth in investment book. The brokerage house expects yields on investment to decline slightly despite significant drop in secondary market yields during 2QCY24, as bank’s locked in T-Bills at higher rates, particularly in a 12-Months tenure. Strong non-markup income on the back of gain on sale of securities due to declining secondary market yields along with higher fee and dividend income would offset…
PSX witnesses 16.5%WoW decline in average daily trading volume Pakistan Stock Exchange (PSX) remained volatile during the week, with the benchmark index losing 233 points or 0.3WoW to close at 85,250 points on Friday, October 18, 2024. Commercial Banks and Power sectors were the primary drags on the index, as concerns over additional ADR-based taxation to weigh on banks’ expected profitability for the last quarter, while continued government scrutiny on IPPs added pressure to the Power sector. Fertilizer sector also remained laggard due to lower than expected payouts by EFERT. On the political front, the successful conclusion of the SCO…
There is no denying to the fact that commercial banks in Pakistan have been posting substantial profit when the interest rates were high. However, with the commencement of decline in interest rate banks’ profit is likely to come under pressure. Along with this banks are also anticipated to witness erosion in deposits as the depositors will switchover their investment in other high yielding options. In the high interest environment banks were investing colossal amounts in risk-free government securities. The added advantage was no fear of non-performing loans and no need for provisioning for delinquent loans. The first and hard below…
PSX benchmark index up 2.76%WoW Pakistan Stock Exchange (PSX) continued its bullish momentum throughout the week ended on October 04 2024. With expectation of further interest rate cut and IMF’s EFF approval the benchmark KSE-100 index gained 2,240 points or 2.76%WoW to close at 83,532 points. Overall, the bullish sentiments were driven by high dividend yielding sectors that included Fertilizers and E&P, as falling fixed-income yields led to a rerating of these sectors. CPI dropped down 6.93%YoY in September 2024 since January 2021. Additionally, in the auction held on October 02, the yields for the 6-month and 12-month T-Bills decreased…
* With 42 years of strategic investments focuses on industrial, agricultural and climate-resilient projects and eying future with Shariah-Compliant Financial Solutions “We aim to emerge as a development focused and impact driven boutique DFI in the country”, says Rizwan Sheikh Interview with Mr. Rizwan Sheikh — General Manager and Chief Executive of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) Profile Rizwan Ahmed Sheikh is the General Manager and Chief Executive of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO). He is a seasoned business and banking executive with over 25 years of diverse experience in driving business…
PSX hits record high on rate cuts and IMF boost The Pakistan Stock Exchange (PSX) maintained its upward trend, driven by key factors from the previous week, such as an interest rate cut and Pakistan’s inclusion in the IMF executive board agenda. As a result, the benchmark index hit a record high, closing at 82,074 points, gaining 2,741 points, or 3.5% week-on-week (WoW). Overall, the bullish sentiment was predominantly driven by high-dividend-yielding sectors including Banks, E&P, and Fertilizers, as falling fixed-income yields led to a rerating of these sectors. Current account balance for August 2024 posted a surplus of US$75…
Daily Trading Volume up 28.5%WoW The benchmark index of Pakistan Stock Exchange showed signs of weakness earlier in the week since Pakistan was not included in the IMF’s executive board meeting agenda, which led to a weekly loss of 0.4%WoW, closing at 78,488 points. The Government of Pakistan (GoP) has requested Saudi Arabia to increase it’s lending by US$1.5 billion from existing US$5 billion and are also seeking US$4 billion from Middle East based commercial banks to seize the external financing gap. The global rating agency Moody’s upgraded Pakistan’s debt ratings to Caa2 from Caa3 which instilled positivity among investors.…
In 77 years of sovereignty, the nation contemplates its complex history of external influence, internal challenges, and the enduring quest for stability and integrity Every year on August 14, Pakistanis celebrate Independence Day, when the British Raj decided to quit the subcontinent after ruling this piece of land and ripping it off as much as they could. Muslims of South Asia passed a resolution on March 23, 1940, for the formation of an independent country. They worked hard under the charismatic leadership of Quaid-e-Azam Mohammad Ali Jinnah. Pakistan was the first-ever state created on the basis of ‘ideology’ rather than…
PSE posts nominal gains as global concerns ease, remittances surge Pakistan Stock Exchange witnessed mixed momentum throughout the week ended on August 09, 2024 to close at 78,570 level with a nominal 0.4%WoW gain. According to a report by AKD Securities, the week began on a turbulent note, primarily due to concerns about global markets following Japan’s interest rate hike. However, a rebound in the E&P sector, spurred by a surprising payout from MARI, revitalising market sentiment in the last two sessions. Investors’ confidence was further strengthened by debt rollover commitments during the week, aligning with IMF prerequisites ahead of…
Since independence Pakistani academic institutions working in the public sector have been following a curriculum, capable of producing ‘dignified clerks only’. Lately, some of the private sector universities have introduced new disciplines, but experts are of the consensus that an entirely new range of subjects have to be introduced to meet the emerging local demand and especially to cater to the overseas markets. Agriculture education should be the topmost priority. Crop yields in Pakistan are below the world average. To improve yield, new verities have to be developed which are resistant to common diseases and capable of giving better yields.…
Pakistan Stock Exchange daily trading volume slips to 18 month low Pakistan Stock Exchange experienced volatility throughout the week ended on August 02, 2024 due to political upheaval, with the average daily traded volume falling to 337 million shares as against 358 million shares a week ago, down 5.9%WoW, marking a low of 18 weeks. The benchmark index closed with a loss of 196 points or 0.25%WoW, to close at 78,226 points on Friday. Despite the 100bps cut announced in policy rate by the central bank on Monday, market sentiment remained skeptical. Trade deficit for July 2024 was reported at…
Most of the equity market analysts are bullish about energy companies listed at Pakistan Stock Exchange. Two of the prime reasons are: 1) high dividend pay outs due to persistently increasing crude oil and gas prices and 2) persistently eroding PKR. However, some other analysts term energy sector one of the most inefficient sectors. The disparity is the opinions needs a little deeper probe to determine its strengths and weaknesses. Exploration and Production (E&P) is one of the largest sub sectors in terms of listed capital as well as high dividend pay-out history. However, it may be said point blank…
An exclusive interview with Muhammad Tariq Haq, Founder and CEO, Energy Solutions (Private) Limited Profile  Muhammad Tariq Haq is the Founder and CEO of Energy Solutions (Private) Limited, a leading power generation company in Pakistan. With a BE in Mechanical Engineering from NED University and an MBA in Marketing from IBA, Haq has almost 30 years of experience in the industry. He played a pivotal role in introducing Cummins and Aksa Power Generation to the Pakistani market. Known for his focus on safety, learning, and continuous improvement, Haq is a visionary leader committed to driving growth and innovation in Energy…
Pakistan Stock Exchange closes almost flat The week ended on July 19, 2024 began with the market showing bullish momentum from the outset after Pakistan and IMF reached a staff level agreement for a US$7 billion Extended Fund Facility (EFF) program, which instilled optimism amongst investors. Meanwhile the political tensions persist, as government mulls opposition party ban. Consequently, the bullish trend did not sustain throughout the week and the market faced volatility in the last session. Overall the benchmark KSE-100 index closed with a gain of 173 points or 0.22%WoW to close at 80,117 points on Friday. Current Account Deficit…
The FY25 Budget proposals are the initial steps to broaden the tax base in Pakistan (tax to GDP is still a paltry 9%). It raises taxes on some key agriculture inputs (DAP fertiliser and tractors), strives to encourage tax filing, and does attempt to tax retailers and real estate, albeit with question marks over sustainability. The Budget removes a concessionary tax regime for the exporters (barring the services export industry e.g. IT) and introduces hefty punitive measures for non-tax filers, including a restriction on foreign travel. The key positive from the market’s standpoint is that the feared sharp increase in…
Contrary to expectations of change in the treatment of income from capital gain and dividends to normal tax, affecting net returns of the investors, Topline Securities believes the budget FY25 is overall positive for the market as the Government of Pakistan (GoP) has not changed the treatment of CGT to normal tax. Alongside this, the maximum rate of 15% tax on CGT has also remained unchanged (though removed slab benefits on holding for more than a year on the purchase after Jul 01, 2024) for tax filers and tax on dividends has also remained unchanged at 15%. To note, in…
PSX records highest intraday level of 80,000 At the Pakistan Stock Exchange (PSX) trading was reduced to two days due to Eid-ul-Azha holidays. On Friday, June 21, 2024 market witnessed fluctuation as the index momentarily crossed the 80,000 level during intraday trade. On Thursday the benchmark KSE-100 index had closed at an all-time high of almost 78,800 points. On Friday, the market closed at 78,810.49 — maintaining its record high level with a meager rise of nine points. The week before that the market lost ground in the first two days amidst rumours about potential increases in the Capital Gains Tax (CGT)…
Modern infrastructure and reformed policies can transform bumper crops into sustainable prosperity Pakistan has produced bumper crops of rice, maize and wheat so far in 2024, but will not reap benefits because of bad policies, inadequate storage facilities and absence of value addition. Not only the farmers have lost the confidence because of plunging of prices, but it is also feared that over the next couple of years the country may see drastic reduction in production. Many analysts are jubilant that Pakistan succeeded in exporting large quantity of rice, but it was mainly because the Indian government-imposed ban on export…
Index remains under pressure, next IMF plan supportive Pakistan Stock Exchange remained volatile throughout the week, with early correction leading the benchmark index to dip below the psychological barrier of 75,000 points. However, the bulls staged comeback on the last trading day, gaining 1,000 points. Overall, the KSE-100 index ended the week down by 105 points or 0.14%WoW, closing at 75,878 points on May 31, 2024. Uncertainty surrounding the upcoming budget fuelled volatility and profit-taking. With just a week remaining before the budget announcement, concerns have risen over the IMF’s high tax proposals. Reports suggest abolishing all sales tax exemptions,…
Commercial banks in Pakistan surfer from some serious issues that include, high interest rates, concentration in government securities. As a result, the Government of Pakistan has emerged as one of the largest borrowers. It is believed that more than 80% of total investment of banks is in government securities. This on one hand deprives the private sector from borrowing and on the other hand becomes a serious impediment in the growth of the economy. The central bank data showed that outstanding credit to the private sector rose by 0.72%YoY to PKR8.41 trillion in March 2024. On a sequential basis, private…
Bullish momentum likely to continue The pre-budget rally continued throughout the week ended May 17, 2024 with Pakistan Stock Exchange benchmark index closing at its historic high, as the bears failed to seize control at every turn and investor’s confidence remained high, driving the market to sustained gains. The benchmark index closed at 75,342 points on Friday with a gain of 2,257 points, up 3.09%WoW. The market’s bullish momentum was mainly attributed to recent talks with the IMF proceeding smoothly, without any hiccups. Further, SPI weekly inflation was consistently on downward trend for the past five weeks, indicating a tapering…
Farmers in Pakistan face two opposite problems with reference to the availability of irrigation water: 1) drought-like conditions if rainfall is low and 2) flash floods if rainfall is high. In both cases standing crops are destroyed. Small farmers in Pakistan either use their own money or borrow money from the formal banking system/ informal lenders to purchase seeds, fertilizers and other inputs. When the crop is destroyed, there is no way to recover the loss. In the shipping industry, underwriters developed a system to reduce the losses of those whose goods were carried on ships. Not only did this system improve…
An exclusive interview with Syed Ali Hassan Zaidi, COO, TPL Insurance Profile Syed Ali Hassan Zaidi is a thorough professional with diversified experience of over 15 years. He is currently serving as the Chief Operating Officer for TPL Insurance where he also oversees the Strategy functions with special focus on Insurtech/digital initiatives. Over the years, he has worked on multiple initiatives & projects which has significantly contributed to TPL Insurance securing top position in the industry. Ali has previously worked at Ernst & Young for Pakistan & Dubai offices in the Audit and Assurance function. He also served as Finance…
Volatility persists until budget and IMF talks The trading sessions during the outgoing week remained volatile, primarily due to the aftermath of decision of the State Bank of Pakistan (SBP) to keep interest rates unchanged, coupled with anticipation surrounding inflation readings, which registered at 17.34%YoY for April 2024. The benchmark index closed at 71,902 level on Friday, posting a loss of 840 points or 1.16%WoW decline. The last trading session remained positive with a gain of 1244 points. Other major events included the receipt of a US$1.1 billion tranche following the final review of the IMF’s Stand-by Arrangement, declining fuel…
The automotive industry in Pakistan continues to grapple with a challenging landscape amid elevated interest rates and high inflation. The concerning trend of rising CBU imports persists; they are up 7.8x YoY in 1HFY24. Current industry utilisation stands at approximately 22%. However, demand is expected to gradually rebound with easing inflationary pressures and the onset of monetary easing. Automotive industry sales totaled 9,379 units, posting a decline of 3 %MoM and 1%YoY. This brings 9MFY24 sales to 69,078, reflecting a 38%YoY contraction. Car production also experienced a downturn, dropping by 9 %MoM, potentially indicating weak demand in the coming months.…
Since independence Pakistan has remained an energy-deficient country. After the nationalisation of industries by former Prime Minister, Zulfikar Ali Bhutto in the early seventies, the entire energy sector came under the control of the state. Despite the successive governments following deregulation, liberalisation and privatisation energy business is controlled by the state-owned companies. A significantly large part of energy companies is in exploration and production, oil and gas distribution and even refining remains in the public sector. The names include Oil & Gas Development Company (OGDC), Pakistan Petroleum (PPL), Pakistan State Oil Company (PSO), Sui Twins, and Pak Arab Refinery and…
Erratic week ends on highest-ever level During the trading sessions of the week ending on April 19, 2024, the Pakistan Stock Exchange experienced fluctuations. However, it concluded the week on a strong note, with the benchmark index reaching its highest-ever closing at 70,909 points, marking a 0.85% WoW increase from the previous week. The overall trading volume saw a significant rise, with an average of 492.37 million shares traded, reflecting a 43.51% increase WoW compared to the previous week. In total, 2.46 billion shares were traded throughout the week, up from 1.72 billion shares traded in the preceding week. The…
Since the re-launching of Islamic banking in Pakistan nearly a quarter of a century ago, the apex regulator — the State Bank of Pakistan (SBP), has been saying that the industry has made significant strides. However, many of the critics say the growth is far from satisfactory. The largest number of listed banks falls in the category of conventional banks. Excluding a couple of Islamic banks, most are too small, suffer from a dearth of asset and liability products and mostly suffer from complacency. Their biggest complaint is that the mindset of the people managing the finances of the Government…
Index moves up 2.84%WoW, profit-taking prevails The week ended on March 29, 2024 witnessed bullish trend at Pakistan Stock Exchange. Overall, the first four trading days cumulatively added around 2,000 points, with the benchmark index closing at 67,005 points, up 2.84%WoW on Friday (March 29), following a slight profit-taking session noted on the last trading day of the week. Positivity loomed over the successful last review of IMF’s SBA, the new incumbent government’s steps and commitment towards reforms. A new tax regime ordered for retailers and wholesalers, piloting initially in major cities, aimed to broaden the tax base. While similar…
Pakistan’s relationship with the International Monetary Fund (IMF) since 1958 has been marked by a complex interplay of financial challenges, strategic manoeuvres, and global assistance, profoundly shaping the nation’s economic trajectory over the decades. Recent data offers a nuanced perspective on Pakistan’s ongoing engagement with the IMF, with significant implications for economic stability. Pakistan ranks fifth in outstanding debt with the IMF, standing at US$7.4 billion, trailing behind Argentina, Egypt, Ukraine and Ecuador. The journey began in 1958 when Pakistan secured its inaugural IMF bailout of US$25,000. The largest-ever loan of US$7.6 billion which was sought in 2008, under the…
There is a growing consensus that large commercial banks prefer to work in certain comfort zones. Top of the list item is investment in totally risk-free government securities i.e. Treasury Bills and Pakistan Investment Bonds (PIBs). This is followed by lending to the blue of the blue-chip companies, which offer substantial deposits. Ironically, microfinance banks also suffer from this herd mentality. Many analysts strongly believe that agriculture has the potential to boost Pakistan’s GDP manifold, but paltry lending to the agriculture sector that too at a high-interest rate and on top of all lack of specific lending guidelines, does not…
Strategic shifts in market priorities Market remained volatile during the week with a sharp correction of 1,700 points mid-week followed by some recovery during the second-last trading session. Overall, the benchmark index lost 977 points or 1.49%WoW to close the week at 64,816 level. With the new cabinet taking oath, progress on the IMF SBA’s second review has begun. The arrival of the IMF team led to the circulation of conditionalities and requests across various economic sectors, most of which indicate long-term reforms and conditions, setting the tone for long-term programmes. Alongside conditions set in the SBA, additional conditions of…
There is a growing consensus that large commercial banks prefer to work in certain comfort zones. Top of the list item is investment in totally risk-free government securities i.e. Treasury Bills and Pakistan Investment Bonds (PIBs). This is followed by lending to the blue of the blue-chip companies, which offer substantial deposits. Ironically, microfinance banks also suffer from this herd mentality. Many analysts strongly believe that agriculture has the potential to boost Pakistan’s GDP manifold, but paltry lending to the agriculture sector that too at a high-interest rate and on top of all lack of specific lending guidelines, does not…
Pakistan Stock Exchange posts lackluster movement The week ended on March 08, 2024 started on a positive note, with the index gaining 1% on the opening day. However, as the week progressed, profit taking activities ensued, losing some of the initial gains. Nonetheless, by the week’s end, the benchmark index managed to maintain an upward momentum, closing at 65,326 points with a gain of 468 points or 0.7%WoW. With new Prime Minister taking office and issuing immediate directives focusing on engaging with the IMF and addressing privatization matters set an initial positive impetus. With new setup in place the IMF…
Index recovers and likely to come round With the political tumult settling, market bounced back and regained the points lost in the previous week. Benchmark index closed the week ended on Friday (February 23) at 62,816 points, up 4.9%WoW. The market had lost 3,000 points a week ago amidst political uncertainty. Overall, week started with the positivity, however exacerbated after Bilawal Bhutto’s announcement of new prime minister and president joint candidates. Similarly, provincial assemblies also began taking shape, with Punjab MPAs taking oaths and the announcement of the Sindh chief minister name. Additionally, healthy corporate earnings and developments on the…
PSE index likely to move up on new govt formation The week ended on February 09, 2024 was short three-day trading, the weight of a momentous event loomed large—the elections. The week began with positive news of possible nods by the IMF on circular debt and power tariff rationalisation plans, as well as a narrowed trade deficit for the month of January. However, uncertainty surrounding the election results on Friday (February 9) shattered the early gains. Contrary to expectations, the initial outcomes largely favoured PTI-backed independent candidates, resulting in the KSE-100 plunging by 2,300 points at the opening, before partially…
easypaisa: Redefining financial landscape of Pakistan In the heart of Pakistan, where nearly 100 million unbanked individuals face limited access to credit, a financial revolution was underway. The traditional commercial banking landscape struggled to provide services to the underprivileged, especially in remote regions. The daunting prospect of establishing brick and mortar branches in these areas was a significant challenge for many banks. However, the inception of easypaisa, emerged as a beacon of change. In 2009, easypaisa made its debut as a peer to peer money transfer service, marking the genesis of a fintech revolution in Pakistan. It went beyond mere…
Escalating tensions in the Middle East have begun to exert a notable influence on global trade, with Yemeni Houthi targeting commercial vessels leading to disruptions in maritime traffic. This development has resulted in a substantial surge in freight charges, as shipping companies opt for longer routes to avoid the Red Sea, consequently impacting various sectors. Additionally, the heightened tensions in the region have the potential to trigger a commodity super-cycle, driven by rising oil prices, contributing to increased inflationary pressures. According to the Topline Securities, the top most commodities that are shipped each year via Red Sea and Suez Canal…
Index edges up, likely to shine under election glare The week unfolded amidst political uncertainties and speculations of election delays, tempering market optimism; however, positive macroeconomic developments provided a counter balance. IMF’s approval of the second tranche of US$700 million on January 11, 2024, injected momentum, drove the KSE100 index to close the week at 64,638 points (up 0.19%WoW) after an initial dip to 64,237 on the first day. While the approval of the IMF’s second tranche was anticipated, the surprise was the absence of any comments on politics or elections. Additionally, a restrained trade deficit of US$1.7 billion in…
The country has the potential to accelerate the GDP growth rate, produce exportable surplus and optimise the cost of production The year 2024 is anticipated to be a good year for Pakistan. Improved relationships with the lender of last resort— the International Monetary Fund (IMF) has paved the way for the inflow of funds from multilateral lenders as well as friendly countries. Hovering of crude oil prices around US$80/barrel, despite the Israel-Hamas war going on for more than three months is likely to keep Pakistan’s energy import bill at a modest and sustainable level. Production of above 7.8 million cotton…
Benchmark index up 3.3%WoW on positive outlook The Year 2024 started optimistically for Pakistan Stock Exchange and its benchmark index surged 2,211 points on the first day. However, political noise cast a shadow, dragged the index 151 points below the week’s first day closing at 64,515 points, up 3.3%WoW to close the week on January 05, 2024. Despite the headwinds, economic factors provided positive signals, foreign exchange reserves held by State Bank of Pakistan rose by US$1.3 billion in last two weeks of December 2023, marking a 23-week high, closing at US$8.22bn as of December 29, 2023 and would potentially…
This year when I said down to write review of the outgoing year, nothing came to my mind except genocide of Palestinians by Israel in Gaza. Over the last eleven weeks nearly 20,000 people have been killed, mostly women and children. The biggest tragedy is, Israel is adamant at eradicating Palestinians and rest of the world is talking about humanitarian aid but not ceasefire. Two of the superpowers also enjoying Veto power, the United States and Russia abstained from a United Nations resolution passed by the Security Council that would increase humanitarian aid to the Gaza Strip without directly calling…
Pakistan Stock Exchange benchmark index declines 6.69%WoW After touching successive highs for the last two months, the benchmark index of Pakistan Stock Exchange (PSX) declined 6.69%WoW to close at 61,705 points on December 22, 2023. Overall, selling in scrips was witnessed as the year closes. On the brighter side, after much anticipation, ECP issued the elections schedule for February 08, 2024. Moreover, Pakistan recorded a current account surplus of US$9 million in November 2023 after having seen four consecutive deficits in the months before. Ministry of Energy authorized the plan to settle PKR262 billion payables to WAPDA and GPPs in…
Index keeps upward trend and likely to continue Pakistan Stock Exchange benchmark index continued its upward movement during the week ended on December 01, 2023, finally settling at 61,691 points, up 4.4%WoW, reflecting its historic high. Although the market participation witnessed a dip of 6.7%WoW, investors remained engaged amid the historic ascent, with avg. traded volume of 612.5 million shares. The impetus, post IMF review success, sustained with a notable increase in foreign inflows into the market, with net FIPI buying hitting its 6-year high of US$35 million in November 2023. Furthermore, Kuwait and UAE agreements, US$3 billion deposit extension…
Need for comprehensive plans to enhance food security in the country Many of the security experts are of the opinion that food security is the strongest defence against all sorts of aggressions, both internal and external. Availability of indigenously produced food not only keep their prices affordable for the people but also keep foreign exchange reserves of the country free from pressure. Before going ahead it is necessary to have a quick review of the prevailing situation in Pakistan. Despite tall claims of the successive governments, the country has remained net importer of food items. Top of the list items…
A little extra attention can reduce edible oil import bill of Pakistan to half The initial conversation with growers from Sindh reveals that in the recent past farmers used to grow sunflower on a substantially large area. However, with the passage of time and after making considerable losses, they have stopped cultivating sunflower. The experts are of the opinion that a little attention of the government, creation of awareness among the farmers and construction of modern warehouses can once again convince them to cultivate sunflower. The experts go to the extent of saying that Sindh has a potential to bring…
Bulls to dominate on optimistic outlook Pakistan Stock Exchange (PSX) witnesses persistent bullish run during the week ended on November 10, 2023. The benchmark index closed at 55,391 points, up 4.27%WoW, with daily trading volume averaging at 544.05 million shares, up 20.8%WoW. The sentiments were driven by an overall positive atmosphere owing to IMF’s review under the SBA, after the completion of technical talks, followed by policy level discussions scheduled to begin on Monday (November 6). Overall, discussions seem to be on a positive trajectory with IMF mostly questioning the fiscal targets and delay regarding gas price revisions. On the macro…
Pakistan Stock Exchange gains 1,261 points Pakistan Stock Exchange (PSX) remained positive throughout the week ended on October 06, 2023. The benchmark index gained 1,261 points to close at 47,494 level. In a meeting with the Senate Standing Committee on Finance, Dr. Shamshad Akhtar made a promising statement that the caretaker government will deliver on the IMF program to secure US$700 million under the SBA. Pakistan is also seeking foreign investments from Saudi Arabia in Reko Diq’s copper and gold mining projects while companies like OGDC, PPL, and GHPL are contemplating on selling their partial or full stakes in an…
There is no denying to the fact that the largest percentage of remittances originates from Saudi Arabia. However, it is felt that to capture the emerging opportunities Pakistanis should keep a close eye on the emerging state of the economy of the country. Now the Kingdom needs workers and executives equipped with new technologies. In recent years, the prospect of relocating to Saudi Arabia has garnered increasing attention worldwide. Fueled by ambitious reforms and a forward-looking vision, Saudi Arabia has embarked on a transformative journey that has captivated global interest. Under the leadership of Crown Prince and Prime Minister Mohammed…
Pakistan Stock Exchange benchmark index posts 1.46%WoW increase Pakistan Stock Exchange (PSX) posted somewhat lackluster movement during the week ended on September 22, 2023. It could be attributed to Monetary Policy announcement scheduled in the middle of the week, amidst dual fuel price hikes during the month. However, the decision of the central bank to keep the rates unchanged was a pleasant surprise. On the external front, country’s foreign exchange reserves remained relatively flat, ending at US$7.69 billion as compared to US$7.64 billion a week ago. Additionally, the domestic currency continued to strengthen against the greenback. Globally crude oil prices…
Urgent need for taking some corrective measures and make good policies Since independence Pakistan has been suffering from two deficits — current account deficit and budget deficit. Analysts believed that these two deficits will be overcome with the passage of time. However, the bad governance of the successive government kept the borrowing appetite high. Over the years governments have been borrowing to pay off the loans acquired in the past. Instead of improving tax collection, the governments have been increasing tax rates, which fueled inflation rate in the country and the wizkids resorted to hike in the interest rate to…
Index gains 1.5%wow; sentiments may improve Pakistan Stock Exchange remained range-bound during the week ended on September 08, 2023, with the benchmark index KSE-100 marginally fluctuating in the slim range of 654 points. The fear of interest rate hike due to the increase in the T-Bills yields kept the market activity in check. However, positive developments over SIFC and the caretaker prime minister’s announcement of total expected inflows of US$50 billion from UAE and Saudi expected to materialise in the next 4-5 years added a substantial layer of positivity to this multifaceted narrative. The KSE-100 index closed at 46,013 points…
The healthcare delivery system in Pakistan consists of public and private sectors. Under the constitution, health is the primarily responsibility of the provincial governments. Health care delivery has traditionally been jointly administered by the federal and provincial governments with districts mainly responsible for implementation. Service delivery is being organised through preventive, promotive, curative and rehabilitative services. The curative and rehabilitative services are being provided mainly at the secondary and tertiary care facilities. Preventive and promotive services, on the other hand, are mainly provided through various national programmes; and community health workers’ interfacing with the communities through primary healthcare facilities and…
The residents of the areas which now comprises of Pakistan have been playing an extra ordinary role when it comes to philanthropy. They have created educational as well as healthcare units. One of the outstanding example of private-public partnership is Sindh Institute of Urology and Transplantation (SIUT). At almost all the government hospitals Patients’ Welfare Associations are performing the leading role. Following are some of the examples, which are not exhaustive. Sindh Institute of Urology and Transplantation Four decades ago SIUT started its journey as an eight bed ward in Burns Unit of Civil Hospital Karachi. Gradually this small ward…
Lacklustre witnessed; cpi data and interest rates in focus -Stock Review The week ended on August 25, 2023 remained lackluster, with the KSE-100 index losing 547 points to close at 47,671 level. The anticipation of heightened inflation had a negative impact on the market, fearing an ad-hoc policy rate hike. However, the recent T-bill auction negated that sentiment, with yields largely maintaining their flat trend as compared to the previous auction. Now the focus is on September 2023 CPI data and the Monetary Policy Committee meeting scheduled for September 14, 2023. Nonetheless, owing to a week full of result announcements,…
Over the last 18 months, Pakistan’s economy has gone from bad to worse. It may be true that the country faced some serious structural problems, but the mother of all evils was the ‘inability of the economic managers to identify the real causes of economic downturn and failure to take the appropriate remedial steps’. Lately, the ruling junta suffered from the worst ‘confidence deficit’. It was mainly because the bad decisions were attributed to the conditions imposed by the International Monetary Fund (IMF). These included persistent hikes in interest rates, increases in electricity and gas tariffs and on top of…
Pakistan stock market closes almost flat The most important news was MSCI unveiling the outcomes of its quarterly review. The update featured noteworthy additions: 15 stocks were integrated into the MSCI Frontier Market Index, while 41 stocks found their place within the MSCI Frontier Markets Small Cap Index. Particularly significant was the projection for Pakistan’s weight to ascend significantly, anticipated to rise from its current 0.6% to a more substantial 2.7%. These alterations are slated to take effect as of the close of business on August 31, 2023. Post-announcement, investors quickly adjust portfolios, implying potential capital inflows the upcoming week.…
Banking Outlook: Pakistan’s Sectoral Growth & Impact of IMF According to Inter Market Securities pre-tax 2QCY23 profits for its Banking Universe is expected to rise 10%QoQ, reflecting strong core performance. However, net earnings may come off by 15%QoQ due to retrospective impact of super tax (10% against 4% previously). Payouts should remain broadly intact. Domestic asset quality has remained resilient, which should keep the cost of risk in check. Impairment, if any, should also be contained compared to the last few quarters. The brokerage house expects Meezan Bank to stand out due to the lagged asset re-pricing this quarter. Bank scrips have risen…
Agriculture contributes nearly one-fourth of the GDP of Pakistan. Over the years State Bank of Pakistan (SBP) has been increasing the lending target to farmers. Various schemes have been introduced for the financial inclusion of farmers, particularly small land holders. For the current financial year the Government of Pakistan has an indicative target of PKR2.25 trillion, which is a welcome sign. For the last financial year (FY23) the SBP had assigned agriculture credit disbursement target of PKR1.8 trillion to meet the growing demand of funds by the farmers. Making the farmers financially strong is aimed at achieving food security. The…
Forex, rupee-dollar parity progress likely to help index Pakistan Stock Exchange witnessed bullish sentiments during the first three trading sessions. However, profit-taking by investors resulted in market closing in red during the last two sessions. Still the benchmark index managed to gain 861 points during the week ended on July 15, 2023 and close at 45,068 points, up 1.9%WoW. Market participation remained healthy with daily traded volume averaging at 352 million shares as compared to an average of 265 million shares during the earlier week up 33%WoW. The market performance was characterized by the IMF’s executive board’s approval of the…
Sales of petroleum products in June 2023 were reported at 1.3 million tons, down 31%YoY, however, up by 4%MoM. The increase in volume was mainly driven by increase in Motor Spirit (MS) by 7%MoM and furnace oil (FO) by 10%MoM. HSD sales however, remained flat. MS sales for the month under review increased by 7%MoM to 0.64 million tons. This was mainly due to 1) seasonal effect of holidays and summer vacations and 2) slightly lower prices. FO sales increased to 100,000 tons, up 10%MoM, mainly due to the higher offtake by power generation plants. Total oil sales excluding furnace…
The Western mantra to get rid of fossil oil is getting louder. There are suggestions that countries have to take extra measures to contain carbon emissions and select an alternative fuel. In this race, the developed countries, particularly the United States and its allies are promoting cleaner energy i.e. solar, wind and gas. In the meantime the pressure is mounting on the less-developed countries, currently using fossil oil and coal, to switch over to natural gas and Pakistan is no exception. Pakistan’s economy is heavily dependent on fossil oil, especially for power generation. Pressure is mounting to quit the use…
Index posts 6.65%wow gain and likely to keep momentum The week ended on July 07, 2023 started on a positive note, with the market going up 2,000 points from the opening bell and closing the day at 43,899 points. Overall, market ended gaining 2,754 points or 6.65%WoW, breaking the 44,000 barrier, up 660 points in intraday trade on July 6 trading session. The rally was mainly driven by the positive sentiment coming out from the Eid holidays as the country’s authorities reached Staff Level Agreement (SLA) with the International Monetary Fund (MF) on June 30, 2023. The market capitalisation rose…
The recent statements of Finance Minister, Senator Ishaq Dar applies to two things that completely negate each other that what is valid or what is true, he said that geopolitics was behind a stalled International Monetary Fund (IMF) programme as global institutions wanted Pakistan to default like Sri Lanka and then enter negotiations, but in the same breath, he insisted that negotiations with the Fund were ongoing and the ninth review would be complete within June 2023. Testifying before the Senate’s standing committee on finance, he once again stressed that the country would meet its obligations with or without the…
It was believed that Federal Finance Minister, Ishaq Dar would present the Budget for the next financial year (FY24) keeping in view two prime objectives: 1) restoring relations with the International Monetary Fund (IMF) and 2) avoiding pitfalls of an election year budget. The general consensus is that the federal budget is unimaginative, lacks concrete substance and uses the old tried mundane methods which really haven’t ever been successful. The incumbent government has followed the decades-old practice of milking the already milked cow. It has proposed to continue super tax at income above PKR150 million. However, new slabs have been…
Index falls, short term range bound likely Market remained lackluster during the week ended on June 16, 2023, with KSE-100 index losing 603 points during the week to close at 41,301 points, posting a decline of 1.4%WoW. Market participation also registered a decline of 25%WoW, averaging at 161.7 million shares as compared to an average of 215.7 million shares a week ago. Despite the negative impact of the budget, including the imposition of a 10% super tax, windfall tax, and tax on bonus share, the market showed some resilience. Meanwhile, in the last Monetary Policy Committee (MPC) meeting last week,…
Economic policy of pakistan Currently, Pakistan struggles with high food import costs and limited foreign exchange. Prioritizing the textiles and sugar industries could enhance foreign earnings and generate significant employment for low-skilled workers. However, this requires a commitment from the government, the introduction of supporting Economic policy of Pakistan and the implementation of these economic policies in letter and spirit. It is on record that 20% to 40% of agriculture produce goes stale before reaching the market. This on the one hand deprives the farmers of a modest return for their efforts and on the other hand, creates shortages and…
Index rises; political uncertainty likely to persist The week ended on June 02, 2023 witnessed positive movement in the first two days, turned bearish on Wednesday, but closed the week on a positive note. The benchmark index gained 388 points to close at 41,353 points, a paltry gain of 0.95%WoW. Participation in the market remained strong, average daily trading volume grew to 180.3 million shares from 117.7 million shares a week ago, an increase of 53.1%WoW. On the IMF front, uncertainty continues to linger as talks of Pakistan and the IMF going their separate ways continued to linger. However, rumours…
The Government of Pakistan (GoP) came up with an alternative delivery system for the benefit of farmers in the year 2013. It is aimed at achieving the financial inclusion of farmers, improving their financial conditions and on top of all achieving food security. The irony of fate was that when the program was launched there was no supporting infrastructure in the country. The work has to be started from ground zero, all the stakeholders have to join their hands and the GoP has to take the lead. If one looks at more than one-decade history, the progress is not very…
Index falls as political uncertainty persists The week ended on May 12, 2023 was mired with political uncertainty, at a time Pakistan needs additional financing for the successful completion of long standing 9th IMF review. The benchmark index closed the week at 41,488 points, posting 1.79%WoW decline. Participation also declined to average daily volumes of 133.52 million shares during the week, from 244.47 million shares a week ago, depicting 45.4%WoW fall. Pakistan has assured the IMF, it will not implement cross fuel subsidy program. Foreign exchange reserves held by State Bank of Pakistan (SBP) eroded by US$74 million to US$4.38…
In the rising interest rate climate, commercial banks have no incentive for venturing into consumer finance. On top of all the Government of Pakistan is not only the biggest borrower but also offers a very lucrative rate of return. Still, to satisfy the apex regulator, the State Bank of Pakistan (SBP), commercial banks keep the business within the family by extending the facility to corporates, high net-worth clients and employees of the corporate sector. Let us, first of all, see much profit is being earned by the commercial banks. According to a report by Pakistan’s leading brokerage house, Topline Securities,…
 Prudent risk mitigation and diversifying services are the bank’s key strategy Focus on education has facilitated financial inclusion, empowered individuals Khushhali Bank has one of the largest client base amongst microfinance dealers Interview with Mr. Aameer Karachiwalla — President/CEO, Khushhali Microfinance Bank Limited Profile With over 30 years of experience, Mr. Aameer Karachiwalla is a fellow of the Institute of Chartered Accountants of Pakistan and a long-serving Director and Chairman of the Board of Directors of Khushhali Microfinance Bank Limited. Mr. Karachiwalla was re-appointed as the Chief Financial Officer of UBL in July 2016. He joined UBL in 1998 and…
Index posts 1.4%wow gain amid political uncertainty The week ended on April 28, 2023 was marred with political uncertainty. The United States asked Pakistan to move ahead on stalled reforms by the IMF, while promising technical help in worst economic times. The IMF awaits clarity on the cross fuel subsidy scheme. In addition to this, foreign exchange reserves inched by US$30 million to US$4.5 billion as on April 20, 2023, culminating to an import cover of less than a month. The KSE-100 index closed the week at 41,581 points, posting 1.40%WoW gain. Participation in the market was a pleasant surprise,…
It is true that Islamic banking in Pakistan has attained a significant share of the overall banking industry. Though the data used in this article may look a little outdated, it presents a fairly reasonable picture. Assets of the Islamic Banking Industry (IBI) grew by PKR 121 billion during July-September 2022 quarter and were recorded at PKR 6,902 billion by the end of September 2022. Deposits of IBI also increased by PKR 165 billion during the period under review and crossed the five trillion mark to reach PKR 5,021 billion by the end of September 2022. The year-on-year (YoY) growth…
Index smidgen low; renew IMF plan likely to support The benchmark index of Pakistan Stock Exchange closed the week ended on April 13, 2023 with a dip of 0.47%WoW. Despite Pakistan’s completion of all prior actions, the resumption of the IMF program is still awaited. According to news sources, the pain point between Pakistan and the IMF of late is commitments from friendly countries. Furthermore, the circular debt of power sector increased by PKR419 billion during 8MFY23, taking the total circular debt to PKR2.67 trillion despite increasing electricity tariffs. With the interest rates at 21% and uncertainties regarding the country’s…
The Elusive IMF Tranche and Political Dynamics Despite Pakistan fulfilling many of the preconditions, the release of the IMF tranche remains elusive. Until greater visibility returns on politics and the economy, it is difficult to build conviction around Pakistan’s investment case. February CPI was reported above 30%, a 50-year high, while the SPI suggests even faster inflation, north of 45%. Analysts expect CPI prints to peak in the 35-40% range in the next few months, and for the SBP to further increase the Policy Rate by 200bps on April 04 meeting. On a more positive note, the current account deficit…
Market stays bearish, range-bound likely Pakistan Stock Exchange (PSX) witnessed lackluster performance during the week ended March 31, 2023, with a weekly change of mere 59 points. This disappointing performance can be attributed to economic and political instability that haunted the investors throughout the week. Currently, the IMF is seeking commitments from friendly countries to bridge the gap of external financing, and furthermore, the fund is demanding clarity on the announced fuel subsidies. The foreign exchange reserves held by State Bank of Pakistan (SBP) decrease of US$354 million to US$4.24 billion as on March 24, 2023. The benchmark index gained…
Average daily trading volume increased by 31.0%WoW Pakistan Stock Exchange (PSX) witnessed an overall lackluster week ended on March 10, 2023.The news about US$500 million inflow from China boosted reserves up to US$4.3 billion as of March 03, thereby instilling investor confidence. Despite fulfilling further IMF conditions, i.e. imposition of power surcharge and cabinet approval of 25% GST on luxury items, the long-awaited SLA (Staff-Level Arrangement) still hangs in the balance. The benchmark index closed the week at 41,794 points, indicating a 1.1%WoW gain. The market witnessed an active participation, with daily trading volumes exceeding 209 million shares during the…
Average daily trading volume increased by 31.0%WoW Pakistan Stock Exchange (PSX) witnessed an overall lackluster week ended on March 10, 2023.The news about US$500 million inflow from China boosted reserves up to US$4.3 billion as of March 03, thereby instilling investor confidence. Despite fulfilling further IMF conditions, i.e. imposition of power surcharge and cabinet approval of 25% GST on luxury items, the long-awaited SLA (Staff-Level Arrangement) still hangs in the balance. The benchmark index closed the week at 41,794 points, indicating a 1.1%WoW gain. The market witnessed an active participation, with daily trading volumes exceeding 209 million shares during the…
There can’t be two opinions about the need for boosting crude oil refining capacity in Pakistan. However, analysts are of the consensus that the issue is complicated, policymakers and players are not on the same page, presence of pressure groups and above all, there is an acute shortage of foreign exchange. As a result announcement of the new Refining Policy has been lingering on, eroding paltry foreign exchange reserves of the country. Lately, the government has asked local refineries to overcome the likely shortfall of 8,000 tons of petrol in the country. This clearly indicates that the concerned departments were…
Interview with Mohammad (Razi) Raziuddin — Chairman/CEO, Razi Energy Company (Pvt) Limited PAGE: Please tell us something about yourself and your organization. Mohammad Raziuddin: I have been involved with the Pakistan refineries since 1985. I have worked as policy maker, regulator, head of a refinery, advisory roles to refineries and consultant in Pakistan, Bangladesh, Saudi Arabia, USA and Ghana. I have worked on crisis and change management. PAGE: What is your demand for new Refining Policy? Mohammad Raziuddin: The new Refining Policy must have some objectives and targets to achieve. Under the present circumstances of Pakistan, where foreign exchange is at…
PSE witnesses decline; range bound expected During the week ended on February 24, 2023, Pakistan Stock Exchange remained volatile due to news flows regarding the IMF deal and approval of Financial Supplementary Bill for raising additional taxes of PKR170 billion Unease amongst the participants increased as T-Bills cut-offs in the latest auction by State Bank of Pakistan (SBP) went up to 19.95%, contributing to the fears of further hike in the interest rate. Reserves held by the SBP witnessed an increase for second consecutive week, rising to US$$3.26 billion, still standing at a critical level. The noticeable improvement can be…
Political, economic fronts may keep market in check – stock update The week ended on February 03, 2023 remained volatile due to the ongoing talks with IMF to ensure its prerequisite conditions are implemented which includes high circular debt which is hovering around PKR2.5 trillion for power sector and PKR1.6 trillion for Gas sector while restricting subsidies only to vulnerable domestic consumers. Furthermore the lender has also demanded political consensus given that opposition might create hurdles in the way of implementing tough economic decisions. The local currency has dropped significantly after it was left to market forces, depreciating to PKR276/USD.…
Interview with Kabeer Naqvi — President & CEO, U Microfinance Bank U Microfinance Bank Ltd. (U Bank) has been witnessed to be one of the most progressive and fast-growing microfinance banks in Pakistan. The bank is a wholly-owned subsidiary of Pakistan Telecommunication Company Limited (PTCL) – e& Group (previously known as Etisalat Company). It has a vast network of branches across the rural and urban areas of Pakistan, offering a wide range of microfinance loans, deposit products, and branchless banking solutions. U Bank is dedicated to its mission of financial inclusion of the masses, under the strong leadership of its…