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Weekly SPI Increases by 8.72% YoY
September 18, 2020 (MLN): The Weekly Sensitive Price Indicator (SPI) for the Combined Group increased by 0.71% during the week ended Sep 17, 2020 while the SPI increased by 8.72% compared to the corresponding period from last year.
According to data released by the Pakistan Bureau of Statistics (PBS) the Combined Index was at 137.59 compared to 136.62 on Sep 10, 2020 while the index was recorded at 126.56 a year ago, on Sep 19, 2019
Out of the 51 monitored items, the average price of 26 items increased, 3 items decreased whereas 22 items registered no change during the week.
The weekly SPI percentage change by income groups showed that SPI increased across all quantiles ranging between 0.63% and 0.86%.
The Lowest Income Group witnessed a weekly increase of 0.86% while the highest income group recorded an increase of 0.63%.
On an yearly basis, analysis of SPI change across different income segments showed that SPI increased across all quantiles ranging between 7.27% and 11.67%.
Yearly SPI for the Lowest Income Group increased by 11.67% while the highest income group recorded an increase of 7.27%.
The average price of Sona urea stood at Rs.1682 per 50 kg bag which is 0.06% higher than last week’s price and 15.94% lower when compared to last year.
Meanwhile, average Cement price was recorded at Rs.563 per 50 kg bag, which is 1.08% higher than the previous week and 1.99% higher than prices last year.
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MPS Preview: Curb Your Enthusiasm
September 18, 2020 (MLN): The wait-and-see stance is expected to be well maintained by the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its meeting which is scheduled to take place on Monday i.e. September 21, 2020.
The SBP in its upcoming meeting is expected to maintain status quo, holding the benchmark policy rate unchanged at 7%.
The main reason for status quo stance in upcoming monetary policy is the normalized inflation outlook as CPI is expected to remain within the SBP’s target range of 7%-9% for FY21, on account of higher base effect and lower oil prices.
Moreover, considering absence of demand side pressures, major slowdown in business activity post covid-19, stable current account position and a risk of a second wave of virus, the MPC may continue to hold the negative real interest rate for now.
Since March 2020, when the economy had faltered under the effects of Covid-19 pandemic, with economic activity ending, the SBP came up with the most aggressive central bank in terms of a rate cut as it reduced 625 bps since March-2020
To recall, the monetary policy statement for July had been delayed by the SBP as the regulator did not feel the urgency to take further action over the prevailing economic challenges rather than preferred to adopt wait and see approach for any change in the interest rate.
The recent surplus of $424 million in current account due to surge in remittance to a record US$2.8 billion, which was up by 36% YoY and 12% MoM, would also contribute to the maintenance of the status quo stance on policy rate. Although this is a short-lived phenomenon as the remittances flow through official channels will slow down once international travelling takes up again and cash carriage reconvenes. Additionally, the rising unemployment in source countries is also expected to soften remittances flows going forward.
However, with international oil prices remaining under pressure amid general slowdown in economic activity and with flexible exchange rate regime, country’s current account balance is expected to remain strong. To highlight, the current account deficit has been consistently depicting a declining trend over the last two years as it stood $2.9 billion in FY20 against $13.4 billion and $19.1 billion in FY19 and FY18 respectively.
Moreover, the strong external account position will also help PKR to stand firm against greenback, which will push imported inflation back.
In addition, taking clue from the recent auctions of government securities i.e. T-bills and PIBs, where cut off yield remained stable, also pointing towards a status quo.
Lastly, the expected status quo in the policy rate stance is further strengthened by the survey conducted by Arif Habib Limited, in which the brokerage house took feedback from various sectors such as Banks, AMCs, Insurance, DFIs, E&Ps, Cement, Fertilizer, Steel, Textile and Pharmaceuticals about the upcoming monetary policy.
According to the brokerage house, 83% of the total respondents are of the view that the SBP will keep the policy rate unchanged in September’s MPS., while 17% of the total respondents see a rate cut, whereas, none of the respondent expects a rate hike in September’s MPS.
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Closing Bell: Wingardium Leviosa
September 18, 2020 (MNL): The KSE-100 index ended the trading session on Friday with a 170 point or 0.40 percent gain to close at 42,504.76.
Activity at the trading floor remained subdued as several participants took cues from the current state of international markets. Investors who did participate in the trading took respite from China’s confidence in a successful FATF review for Pakistan.
While several companies announced their financial results for the period ended June 30, 2020, it was KAPCO that got most of the limelight due to its terrific performance. Despite that, the scrips of the company failed to impress in today’s session.
The Index traded in a range of 320.46 points or 0.76 percent of previous close, showing an intraday high of 42,554.84 and a low of 42,234.38.
Of the 97 traded companies in the KSE100 Index 45 closed up 47 closed down, while 5 remained unchanged. Total volume traded for the index was 331.72 million shares.
Sectors propping up the index were Oil & Gas Exploration Companies with 75 points, Commercial Banks with 71 points, Fertilizer with 35 points, Automobile Assembler with 15 points and Transport with 13 points.
The most points added to the index was by OGDC which contributed 43 points followed by FFC with 28 points, UBL with 27 points, MEBL with 20 points and POL with 15 points.
Sector wise, the index was let down by Cement with 25 points, Insurance with 11 points, Power Generation & Distribution with 10 points, Tobacco with 9 points and Chemical with 7 points.
The most points taken off the index was by KAPCO which stripped the index of 19 points followed by DAWH with 14 points, PAKT with 8 points, EPCL with 7 points and LUCK with 7 points.
All Share Volume increased by 7.43 Million to 516.13 Million Shares. Market Cap increased by Rs.23.67 Billion.
Total companies traded were 417 compared to 414 from the previous session. Of the scrips traded 184 closed up, 210 closed down while 23 remained unchanged.
Total trades decreased by 3,318 to 125,419.
Value Traded decreased by 1.51 Billion to Rs.13.58 Billion
| Company | Volume |
|---|---|
| Pakistan International Bulk Terminal | 75,507,500 |
| Unity Foods | 45,277,000 |
| Fauji Foods | 38,861,500 |
| K-Electric | 35,377,500 |
| Kot Addu Power Company | 35,293,000 |
| Pakistan Telecommunication Company Ltd | 28,181,500 |
| Hascol Petroleum | 26,375,500 |
| Al Shaheer Corporation | 14,471,500 |
| Pakistan Refinery | 14,081,500 |
| Power Cement | 11,528,500 |
| Sector | Volume |
|---|---|
| Transport | 78,085,200 |
| Power Generation & Distribution | 76,456,023 |
| Food & Personal Care Products | 66,921,620 |
| Technology & Communication | 47,189,100 |
| Vanaspati & Allied Industries | 45,279,000 |
| Oil & Gas Marketing Companies | 29,478,303 |
| Cement | 27,986,869 |
| Commercial Banks | 21,207,473 |
| Inv. Banks / Inv. Cos. / Securities Cos. | 19,174,300 |
| Refinery | 19,135,200 |
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Gold increases by Rs 500 to Rs 114,700 per tola
September 18, 2020 (MLN): In domestic bullion market, the price of 24 Karat gold on Friday increased by Rs 500 to Rs 114,700 against the price of Rs 114,200 recorded yesterday.
According to the data released by the All Sindh Saraf Jewellers Association, the price of 10-gram gold also witnessed an increase of Rs 429 to settle at Rs 98,337 against the previous close of Rs 97,908 per-gram.
On the other hand, silver witnessed a decrease in its price. The 24-Karat Silver edged lower by Rs 20 to Rs 1,300 per tola. Likewise, the price of 10-gram silver was recorded at Rs 1,114.54, down by Rs 17.14 compared to a prior close of Rs 1,131.68.
In international markets, gold prices inched higher by $4 to $1953 per ounce while silver stood at $27.10 an ounce.
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PKR strengthens by 14 paisa in a week
September 18, 2020 (MLN): Pakistani rupee (PKR) appreciated by 38 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 165.83 per USD, against yesterday's closing of PKR 166.21 per USD.
The rupee traded within a very narrow range of 21 paisa per USD showing an intraday high bid of 165.91 and an intraday Low offer of 165.75.
During the week, the currency has gained 14 paisa against the greenback, as the previous week was concluded at PKR 165.97 per USD.
Within the Open Market, PKR was traded at 165.50/166.50 per USD.
Meanwhile, the currency gained 10 paisa against the Pound Sterling as the day's closing quote stood at PKR 215.25 per GBP, while the previous session closed at PKR 215.35 per GBP.
On the other hand, PKR's value weakened by 42 paisa against EUR which closed at PKR 196.63 at the interbank today.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation in which it injected Rs.950 billion for 7 days at 7.02 percent.
The overnight repo rate towards close of the session was 7.00/7.10 percent, whereas the 1 week rate was 7.00/7.05 percent.
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CCoE discusses proposal for waiver of minimum 66% Take-or-Pay commitment in PPAs and GSAs
Posted on: 2020-09-18T16:29:00+05:00
36994
Nishat Mills’ net profits fall by 9% YoY in FY20 due to COVID-19 and lower other income
September 17, 2020 (MLN) : Nishat Mills Limited has posted a profit after tax of Rs 8.77 billion in FY20, depicting a decline of 9% YoY against a net profit of Rs 9.65 billion in FY19.
This has translated into earning per share which clocked in at Rs 18.07 against Rs 22.20 in the aforementioned period.
Other than this, the Board of Directors of NML announced a final cash dividend for the year ended June 30, 2020, of Rs 4 per share i.e. 40%.
During FY20, the company’s net profitability decreased on the back of lower revenue due to the outbreak of COVID-19, resulting in the closure of the plant to curb the spread of the virus and cancellation or delay in the sales order, highlighted by Arif Habib Limited’s research.
As per the financial statement issued by the company, the topline witnessed a drop of 7.6% to Rs 88 billion but more than a proportionate decrease in the cost of sales by 10.48% owing to a decline in raw material prices, led gross profits to increase by 6% YoY. Therefore, the gross margin jumped from 17.6% to 20.16%.
The other major highlight is other income which plunged by around 31% YoY to Rs 2.35 billion on the back of lower dividend income received from DGKC and NPL as well as lower exchange gains, the research said.
Meanwhile, the tax expenses plunged by 37% YoY to Rs 839 million compared to the same period of last year, providing the cushion to its earnings.
Consolidated Profit and Loss Statement for the year ended June 30th, 2020 ('000 Rupees) | |||
|---|---|---|---|
| Jun-20 | Jun-19 | % Change |
Revenue | 88,709,830 | 96,005,322 | -7.60% |
Cost of Sales | (70,822,039) | (79,108,980) | -10.48% |
Gross Profit | 17,887,791 | 16,896,342 | 5.87% |
Distribution cost | -6093102 | -5741161 | 6.13% |
Administrative expenses | (2,223,204) | (1,833,976) | 21.22% |
Other expenses | (218,300) | (394,678) | -44.69% |
Total expenses | (8,534,606) | (7,969,815) | 7.09% |
| 9,353,185 | 8,926,527 | 4.78% |
Other income | 2,351,438 | 3,422,072 | -31.29% |
Profit from operation | 11,704,623 | 12,348,599 | -5.21% |
Finance cost | (2,957,854) | (2,665,183) | 10.98% |
Share of profit from associates | 864,092 | 1,300,879 | -33.58% |
Profit before taxation | 9,610,861 | 10,984,295 | -12.50% |
Taxation | (839,106) | (1,331,201) | -36.97% |
Profit for the year | 8,771,755 | 9,653,094 | -9.13% |
Earnings per share - basic and diluted (Rupees) | 18.07 | 22.20 | -18.60% |
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KAPCO’s earnings jump by 80% during FY20 despite lower revenues
September 18, 2020: Kot Addu Power Company (KAPCO) has announced earnings of Rs. 23.6 billion (EPS: 26.83) for FY20, i.e. a whopping 80% higher than the profits recorded in last year.
It is interesting to note that the profitability showed a commendable growth despite lower revenues, which fell by 16% on the back of lower power generation as well as drop in the prices of FO and LNG. Nonetheless, the 29% decline in cost of sales due helping in lifting the gross profits by 51%.
The other income of the company surged by 51% owing to increase in over-due receivables.
The finance cost remained somewhat the same as it changed by merely 1.8%, due to consistent curtailment in interest rates throughout the latter half of the year as well as decline in short term borrowings.
Financial Results for year ended June 30, 2020 (Rupees'000) | |||
|---|---|---|---|
Jun-20 | Jun-19 | % Change | |
Sales | 71,543,299 | 84,830,617 | -15.7% |
Cost of sales | (50,065,134) | (70,625,377) | -29.1% |
Gross Profit | 21,478,165 | 14,205,240 | 51.2% |
Administrative expenses | (872,749) | (708,740) | 23.1% |
Other operating charges | - | (8,922) | |
Other income | 20,806,245 | 13,781,099 | 51.0% |
Finance cost | (8,457,417) | (8,306,164) | 1.8% |
Profit before taxation | 32,954,244 | 18,962,513 | 73.8% |
Taxation | (9,341,051) | (5,850,973) | 59.6% |
Profit after taxation | 23,613,193 | 13,111,540 | 80.1% |
Earnings per share | 26.83 | 14.9 | 80.1% |
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Govt making tax collection trouble-free for people, business community: Hafeez Shaikh
September 18, 2020: Adviser to Prime Minister on Finance Abdul Hafeez Sheikh has said present government is continuing with reforms in tax system to make it transparent through automation.
He was speaking at a ceremony to release tax directory and hold balloting for audit of the taxpayers in Islamabad on Friday.
Hafeez Sheikh said two committees comprising of representatives from both the FBR and business community have been constituted to address complaints against FBR and issue of refunds to facilitate the taxpayers.
He said basic objective of tax collection is to provide better basic facilities of life like potable water, health, education, and infrastructure.
The Advisor on Finance said the government wants to make tax collection trouble-free for the people, particularly the business community. He said no new tax was imposed on business community in this year's budget. He said subsidies were maintained for industry, particularly the export industry to minimize the cost of doing business.
Abdul Hafeez Sheikh said the government refunded 240 billion rupees during the last fiscal year which is double as compared with previous year.
He said system of sales tax on exports has also been computerized and refund can be had in 72 hours by filling a form while sitting home. He said the process of refund of income tax is also being made faster.
Advisor on Finance said the government's policies are aimed at boosting the exports to earn precious foreign exchange.
Radio Pakistan
Debt retirement of PKR 42 billion signals better days ahead for PSO
September 18, 2020 (MLN): Pakistan State Oil recently disclosed its financial accounts for the Financial Year 2020, which showed a heavy decline of Rs. 42 billion in the company’s short-term borrowings.
This amount accounts for almost 20% of the company’s balance sheet size as of March 30, 2020. Naturally, deleveraging of such a magnitude would lead to favorable change in the net finance cost of the company.
This factor is likely to have a strong positive impact on the earnings for the next quarter, a report by Foundation Securities suggested recently. Not only the borrowings, but the ongoing negotiation with the Power Sector to address the issue of mounting circular debt as well as the expected additional liquidity injection in the power sector by government to the tune of Rs. 200 billion would also uplift the cash position of the company.
Foundation Securities has estimated an annualized impact of Rs. 3 per share in the earnings for 1QFY21, after taking into account Rs. 28 billion on foreign exchange gains received from government, Rs. 26 billion reduction in trade debt mainly from Rs. 19 billion received from SNGP, improved working capital from Rs. 27/17 billion decrease/increase in Inventory/trade payable, and lower interest rates (KIBOR/LIBOR) which would reduce PSO’s finance cost.
PSO is also looking forward to gain from the future resumption of IMF program, which would result in higher electricity/gas prices and efficiency measures in power chain that would potentially address (partially if not fully) the issues on recurring basis in medium-long term.
The future outlook entails stability in international prices and inflationary revisions in marketing margins of regulated products are expected to improve gross earnings. Moreover, macroeconomic stability, stabilization of PKR-USD parity and aggressive business strategy of market penetration backed by plans of infrastructure development represent a promising future for the Company ahead.
To recall, PSO had reported had Loss after Tax (LAT) of Rs. 6.5 billion (Loss per share: 13.8) for the year ended June 30, 2020. The Board noted that the unprecedented losses of Rs. 16.4 billion incurred during Q4FY20 not only eroded the net profit of PKR 3 billion earned during the first three quarters, but also resulted in a net loss for the complete fiscal year 2020.
In wake of uncontrollable circumstances and despite massive inventory losses, the Company was able to contain the extent of losses through efficient inventory management, focus on high margin products and prudent expense controls. The Company was also successful in reducing the chronic receivables from the Power Sector, PIA and SNGPL by PKR 13.1 billion which stood at PKR 185.2 billion as of June 30, 2020.
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