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Commercial Banks’ deposits surge by 18% YoY by end-March, highest in 14 years
April 12, 2021 (MLN): The total Deposits held by Commercial Banks have grown by 18% YoY to Rs.17.9 trillion in 1QCY21, which is the highest growth in the March quarter in the last 14 years.
According to the report by Topline Securities, the growth in Deposits has been fueled by higher Remittances (+29% YoY in USD and 31%YoY in PKR terms during 1Q2021), while lack of cash-based business activity due to COVID-19 may have also resulted in an increase in banking deposits.
Meanwhile, Investments have grown by 35% YoY to Rs.12.6 trillion in 1QCY21. The excess liquidity is being placed in investments (primarily T-Bills) due to subdued growth in Advances.
Consequently, banks' investment to deposit ratio (IDR) which had already depicted an improvement to 67% in Dec-2020, has now increased to 70% by Mar-2021.
On the other hand, demand for Advances remained muted as it grew by just 4% YoY to Rs.8.6 trillion in 1QCY21 as banks remained wary of overall economic conditions due to COVID-19. However, sequential growth of 3.5% QoQ, is an indication of better economic activity during the last few months, the report said.
The advances to deposits ratio (ADR) has dropped to 48% as of Mar-2021 from 56% in Mar-2020.
Moreover, banks’ general provisioning has witnessed an increase of 20% YoY by end of March’21 as banks have opted to increase Provisioning in the wake of COVID-19. Fresh provisioning during the quarter stands at Rs.26 billion compared to Rs.11 billion in the same quarter last year.
Going by the report, M2 growth clocked in at 15% in 1Q2021 primarily driven by higher government borrowing from scheduled banks (up by 12% YoY). The Currency in Circulation (CIC) has increased by 16% YoY to Rs.6.6 trillion by end-March’21, with CIC as a percent of M2 clocking in at 30%, above the past 5-year average of 27%. The reasons for increasing CIC can be attributed to low-interest rates and evasion from tax authorities, the report said.
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PSX Closing Bell: Hesitation Marks
April 12, 2021 (MLN): The capital market started the first day of the week on a volatile note after last week’s alternating frenzy of bulls and bears. The market initially cheered the strong inflows from overseas Pakistani in the form of remittances that clocked in at $2.72 billion. However, later, investors in the market found themselves under the influence of bearish sentiments amid rising virus severity.
Accordingly, the benchmark KSE-100 index ended the trading session on Monday with a 208.43 point or 0.46 percent decline to close at 44,978.05.
As per the closing note by Topline securities, the market saw selling pressure during the trading session which was primarily caused by concerns over COVID-19 lockdowns in cities where the infection ratio is above 15%.
The Index traded in a range of 511.37 points or 1.13 percent of the previous close, showing an intraday high of 45,268.68 and a low of 44,757.31.
Of the 94 traded companies in the KSE100 Index, 25 closed up 67 closed down, while 2 remained unchanged. The total volume traded for the index was 173.42 million shares.
Sector-wise, the index was let down by Oil & Gas Marketing Companies with 36 points, Commercial Banks with 32 points, Pharmaceuticals with 26 points, Chemical with 23 points and Cement with 23 points.
The most points taken off the index was by ENGRO which stripped the index of 44 points followed by PSO with 25 points, OGDC with 22 points, SEARL with 21 points and UBL with 16 points.
Sectors propping up the index were Technology & Communication with 89 points, Real Estate Investment Trust with 3 points, Paper & Board with 2 points and Leasing Companies with 1 points.
The most points added to the index was by TRG which contributed 98 points followed by FFC with 24 points, MCB with 19 points, EFERT with 12 points and LUCK with 6 points.
All Share Volume decreased by 184.51 Million to 503.53 Million Shares. Market Cap decreased by Rs.57.58 Billion.
Total companies traded were 387 compared to 404 from the previous session. Of the scrips traded 130 closed up, 234 closed down while 23 remained unchanged.
Total trades decreased by 21,384 to 160,077.
Value Traded decreased by 5.37 Billion to Rs.19.97 Billion
| Company | Volume |
|---|---|
| Worldcall Telecom | 73,751,500 |
| TRG Pakistan | 42,170,016 |
| Ghani Global Holdings | 38,841,500 |
| Telecard | 38,528,000 |
| Byco Petroleum Pakistan | 18,902,000 |
| Hum Network | 18,480,500 |
| First National Equities | 17,863,000 |
| Unity Foods | 17,399,903 |
| Azgard Nine | 14,351,500 |
| TPL Corp | 13,844,000 |
| Sector | Volume |
|---|---|
| Technology & Communication | 216,879,716 |
| Chemical | 47,598,780 |
| Food & Personal Care Products | 34,944,053 |
| Refinery | 33,490,500 |
| Inv. Banks / Inv. Cos. / Securities Cos. | 27,085,143 |
| Cement | 19,173,675 |
| Commercial Banks | 18,447,938 |
| Glass & Ceramics | 18,360,000 |
| Engineering | 17,108,187 |
| Textile Composite | 16,813,640 |
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SECP amends Murabaha Share Financing Regulations
April 12, 2021: In an endeavour to promote Islamic finance products in the capital market, the Securities and Exchange Commission of Pakistan (SECP) has introduced amendments in Murabaha Share Financing Regulations.
Murabaha Share Finance (MSF) is a Shariah-compliant leveraged product, a viable alternate avenue for capital market investors who prefer the Islamic mode of financing. The product was initially launched in September 2019 with the guidance of renowned practicing Shariah scholars. However, through recent amendments, a system-based initiation and affirmation process has been introduced for Murabaha Sale Transaction. This will facilitate Islamic Financial Institutions (IFIs) and market participants to execute sale transactions with more ease and comfort.
Further, options for collateral management have been added to facilitate MSF Seller and market participants in executing Murabaha Share Financing and release of shares against payment of cash or other collateral.
SECP has conducted a number of awareness sessions with Banks, Brokers, and investors to adopt Shariah-compliant leverage facilities in the capital market. It is hoped that the facilitation will result in increased activity in MSF Product and liquidity in the capital market.
Press Release
KOHC witnesses turnaround in nine-month profits to Rs 2.53 billion
April 12, 2021 (MLN): Kohat Cement Company Limited (KOHC) has witnessed a turnaround in net profits to Rs 2.53 billion (EPS: Rs 12.60) for the nine months ended on March 31st, 2021 compared to the net losses of Rs 283 million (LPS: Rs 1.41) incurred in the same period last year.
The turnaround in earnings can be attributed to higher retention during the said period.
As per the financial statement sent to PSX, the company registered a more than two-fold increase in revenues to Rs 17 billion while its cost of sales jumped by 56% YoY due to a massive jump in international coal prices recently (up by 60% since October 2020). As a result, the gross profits of the company clocked in at Rs 4.34 billion in 9MFY21.
On the cost front, the selling & distribution and administrative expenses tweaked up by 27% and 30%, YoY respectively. The other income of the company during the said period declined by 39.45% YoY.
Meanwhile, the finance cost depicted an increase of 2.01 times YoY to Rs 393 million from Rs 195 million.
Further, the company paid taxes worth Rs 997 million, while, it got a tax credit of Rs 31 million for the same period last year.
Profit and Loss Account for the nine months ended March 31, 2021 (Rupees) | |||
|---|---|---|---|
| Mar-21 | Mar-20 | % Change |
Sales - net | 17,819,980,071 | 8,573,093,454 | 107.86% |
Cost of goods sold | (13,483,605,069) | (8,634,838,889) | 56.15% |
Gross profit/ (loss) | 4,336,375,002 | (61,745,435) | - |
Selling and distribution expenses | (57,566,251) | (45,384,733) | 26.84% |
Administrative and general expenses | (232,928,189) | (179,084,050) | 30.07% |
Other operating income | 109,536,658 | 180,904,273 | -39.45% |
Other expenses | (232,548,080) | (14,207,524) | 1536.80% |
| (413,505,862) | (57,772,034) | 615.75% |
Operating profit/ (loss) | 3,922,869,140 | (119,517,469) | - |
Finance cost | (393,350,150) | (195,215,075) | 101.50% |
Profit/ (loss)before taxation | 3,529,518,990 | (314,732,544) | - |
Taxation | (997,806,454) | 31,416,896 | - |
Profit after taxation | 2,531,712,536 | (283,315,648) | - |
Earnings/(loss) per share - basic and diluted (Rupees) | 12.60 | (1.41) | - |
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Gold rates drop by Rs.600 to settle at Rs.103,500 per tola
April 12, 2021 (MLN): The demand for safe-haven fell today in the domestic bullion market as the price of 24-karat per tola gold dropped by Rs 600 to close at Rs.103,500 per tola. In the previous session, the yellow metal had closed at Rs 104,100 per tola.
According to the Karachi Sarafa Association, the price of 10-gram of 24-karat gold also dipped by Rs 514 to settle at Rs 88,735.
On the other hand, the silver prices remained stable as single tola and 10-gram of 24-karat silver were available at Rs.1,360 and Rs.1,165.98 respectively.
In the global market, gold prices declined by $3 to $1,741 per ounce against the previous closing of $1,744, while silver was valued at $25.20 per ounce.
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PTCL earns Rs.1.6 billion net profits during 1QCY21
April 12, 2021 (MLN): Pakistan’s national carrier PTCL, leading telecom and ICT service provider has announced its Financial Results for the quarter ended March 31, 2021, as per which the company witnessed a turnaround in profitability.
The net profits of the company clocked in at Rs1.6 billion against the net loss of Rs.406.7 million in the corresponding quarter a year ago.
On the revenue front, PTCL reported Rs.33.9 billion worth of revenues for the period under review which was 6.71% higher compared to the same quarter of the previous year. The gross margins of the company improved to 27% from 25% in the previous quarter.
With regards to the company’s major expense heads, its admin and distribution expenses witnessed a meager increase of 3.3% and 3.5% YoY respectively mainly on the back of cost control initiatives taken by the company.
This coupled with a 44.6% YoY reduction in impairment loss on trade and contract assets translated into a 3.9x increase in PTCL’s operating profit to Rs.2.37 billion.
Another factor that helped the company to turn around its losses was income earned from other sources which jumped by 40% YoY from Rs.2.15 billion to Rs.3 billion.
Moreover, the company paid income tax of Rs.656.5 million as opposed to the tax incentive of Rs.114.7 billion that the company availed in the same quarter last year.
Consolidated Financial Results for the Quarter ended March 31, 2021, ended ('000 Rupees) | |||
|---|---|---|---|
| Mar-21 | Mar-20 | %Change |
Revenue | 33,959,997 | 31,825,093 | 6.71% |
Cost of services | (24,633,475) | (23,965,061) | 2.79% |
Gross profit | 9,326,522 | 7,860,032 | 18.66% |
Administrative and general expenses | (4,397,138) | (4,255,705) | 3.32% |
Selling and marketing expenses | (1,925,009) | (1,860,094) | 3.49% |
Impairment loss on trade debts and contract assets | (630,957) | (1,138,233) | -44.57% |
| (6,953,104) | (7,254,032) | -4.15% |
Operating Profit | 2,373,418 | 606,000 | 291.65% |
Other income | 3,010,570 | 2,151,342 | 39.94% |
Finance cost | (3,120,622) | (3,278,828) | -4.83% |
Profit before tax | 2,263,366 | (521,486) |
|
Provision for income tax | (656,560) | 114,762 |
|
Profit for the period | 1,606,806 | (406,724) |
|
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Banks to remain closed for public dealing on 1st Ramadan
April 12, 2021: The State Bank of Pakistan will remain closed for public dealing on 1st Ramadan-ul-Mubarak, 1442 A.H., which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.
All banks / DFIs / MFBs shall, therefore, remain closed for public dealing on 1st Ramadan-ul-Mubarak, 1442 A.H. However, all employees of the banks / DFIs / MFBs will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing).
Press Release
Governor SBP announces important measures for deepening debt and capital markets at Gong Ceremony
April 12, 2021: Pakistan Stock Exchange (PSX) hosted Governor State Bank of Pakistan (SBP), Dr Reza Baqir at its Gong Ceremony to mark the beginning of a new chapter of cooperation between SBP and PSX on multiple initiatives.
SBP and PSX have recently been working closely to improve and widen the access of capital market participants to government debt securities; facilitate investments by non-residents in the stock exchange; remove bottlenecks hindering companies from leveraging against shares of their group companies; and, developing information sharing arrangements between banks and capital markets.
Speaking on the occasion, Governor SBP, Dr. Reza Baqir said he was pleased to visit PSX for this Gong ceremony as it marked the commitment of SBP and PSX to work together for the deepening of debt and capital markets in Pakistan and improving financial intermediation. He made three important announcements in this regard.
First, he said that SBP has revised the Rules governing appointment of primary dealers for the Government’s debt securities. This will expand the list of institutions eligible to work as primary dealers, including Security Depositories and Clearing institutions. This measure is aimed at widening the investor base of government securities, improving liquidity, enhancing transparency and promoting market development. In addition, SBP has relaxed the selection and performance criteria for development finance institutions (DFIs), investment banks and brokerage houses to encourage them to become part of the primary dealer system, which is currently dominated by banks. Hence, among other privileges offered to primary dealers, a larger and more diverse group of institutions will now have direct access to primary auctions.
He said that while the government debt market in Pakistan is well developed and liquid, participation of capital market clients has historically been limited and SBP wants to encourage wider ownership of Government securities among retail investors. The Governor SBP noted that the revised primary dealer Rules will cater to the needs of a diverse group of investors, including capital market clients, corporates and individuals, and will attract a new clientele to the government securities market. Governor Baqir shared that this measure has been taken after detailed discussions with stakeholders and a comprehensive review of international best practices.
Second, Governor Baqir said that SBP has made changes in its prudential regulations to facilitate the sponsors, shareholders and companies in raising more financing against the security of shares of their group companies. He highlighted that this amendment will help sponsors and companies in raising liquidity for further investment in new business opportunities and ventures, in turn leading to greater economic activity. This regulatory change would also benefit the capital markets by encouraging sponsors of companies to consider listing on the stock exchanges. As a result, it will also promote documentation of the economy, transparency, and good corporate governance practices.
Third, Dr. Baqir, apprised the audience that SBP and PSX are jointly working on expanding the scope of KYC information sharing arrangements between banks and Central Depository Company of Pakistan (CDC) or National Clearing Company of Pakistan Limited (NCCPL) for existing bank account holders. He was delighted to reveal that the tangible progress has been made and was hopeful that this important initiative will be successfully rolled out by the end of the next month. He further added that such arrangements will facilitate capital market players in mobilizing domestic resources and channeling them effectively to productive uses.
The Governor SBP was warmly welcomed by the Chairman of the Board, PSX, Mr. Sulaiman S. Mehdi; Board Members of PSX; MD & CEO of PSX, Mr. Farrukh Khan; and senior management of PSX. Also present at the Gong Ceremony were senior members of the Market, Bank Presidents and Treasury Heads, along with senior management of SBP.
Welcoming the SBP Governor to PSX, the MD PSX, Mr Farrukh Khan, said that he was confident that the visit of Governor Reza Baqir to Pakistan Stock Exchange will mark the beginning of a new collaborative journey dedicated to greater coordination between PSX as the frontline regulator of the capital market and SBP as the regulator for the banking industry in the country. This greater coordination would help to promote and foster an environment of increased activity in terms of online initiatives, the recently launched Roshan Digital Accounts for Overseas Pakistanis, and Government Debt Securities, amongst other segments.
He further stated that the journey of added cooperation and between PSX and SBP will benefit all stakeholders of the capital market, the banking industry and the economy of Pakistan. He expressed confidence that SBP and PSX will together be able to lay a pathway for facilitating greater online participation in terms of account opening and activity by brokers and investors, as well as for increasing the number of investors investing in different asset classes in the capital market of Pakistan.
Press Release
PKR rally continues, gains 19 paisa against greenback
April 12, 2021 (MLN): The Pakistani Rupee (PKR) extended its upward trajectory as it appreciated by 19 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 152.75 per USD, against last session's closing of PKR 152.94 per USD.
Today’s domestic unit appreciation has been largely tied to the strong increase in workers’ remittances that surged by 20% MoM and 43% YoY to $2.7 billion in March 2021. Moreover, it is strongly expected that remittances would maintain their growth amid the arrival of Ramazan and Eid season. Commenting on the same, Asad Rizvi said via a Twitter handle, ‘We could be heading for another good month as inflow will be healthy due to holy month of Ramzan.’
The rupee traded within a very narrow range of 37 paisa per USD showing an intraday high bid of 153.10 and an intraday Low offer of 152.78.
Within the Open Market, PKR was traded at 153/153.50 per USD.
According to the data compiled by Mettis Global, PKR, so far, has logged by Rs 15.30 or 10.02% gain against the greenback in FY21 while appreciation has been Rs 7.09 or 4.64% in CY21. MTD (month to date) position showed a marginal increase of 0.01%.
Alternatively, the currency lost 30 paisa to the Pound Sterling as the day's closing quote stood at PKR 209.95 per GBP, while the previous session closed at PKR 209.65 per GBP.
On the other hand, PKR's value strengthened by 24 paisa against EUR which closed at PKR 181.54 at the interbank today.
On another note, within the money market, the overnight repo rate towards close of the session was 6.60/6.80 percent, whereas the 1 week rate was 6.95/7.00 percent.
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International Industries appoints Mr. Sohail R. Bhojani as CEO
April 12, 2021 (MLN): The Board of Directors of the International Industries Limited (INIL) has approved the appointment of Mr. Sohail R. Bhojani in place of Mr. Kamal A. Chinoy as the Chief Executive Officer (CEO) with effect from May 1, 2021.
Mr. Bhojani is a Chartered Accountant and a Fellow Member of the Institute of Chartered Accountants in England & Wales (ICAEW and the Institute of Chartered Accountants of Pakistan (ICAP). He is also a member of CPA Australia and accredited by the Institute of Public Accountants Australia (IPA). He is an alumni of the London Metropolitan University, UK, where he studied Accounting & Finance, and INSEAD, Fontainebleau, France, where he attended the Young Managers Business Program.
He has over 25 years of post-qualification experience, of which 19 have been in senior finance and commercial roles with responsibility for delivering strategy, top-line growth and profit, developing organizational capability, and implementing business performance management and corporate governance frameworks.
He brings to the IIL family a broad range of diverse skills including organizational development, business management, financial planning & analysis, audit financial control, and IT & project management. He has worked in a variety of sectors spanning industrial manufacturing, retail & premier banking, management consultancy, FMCG marketing, pharmaceuticals, and audit & assurance in a number of blue-chip organizations including Akzo Nobel, Barclays Bank, United Bank, ICI, BDO International, and Pannel Kerr Forster. Mr. Bhojani is a certified Director from the Pakistan Institute of Corporate Governance.
The aforesaid information was disseminated by the company via a notification issued to the Pakistan Stock Exchange (PSX) on Monday.
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