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Extraction of injection in local debt market records $1.789 bln in March
April 1, 2020 (MLN): Due to the continuous deterioration in economic conditions with the COVID-19 crisis across the globe, risk-averse investors fled with their hot money worth $1.77 billion net from government debt securities (T-bills and PIBs) during the month of March 2020.
Since the pandemic began, Pakistan witnessed a blow of hot money outflow. The extraction of injection further gathered pace when SBP slashed policy rate by 225 bps to 11%, as according to the SCRA data published by SBP, during the month, the country witnessed only $18.5 million investment in government securities, whereas, outflow stood at $1.789 billion. Comparing with the previous month, the situation was totally different as the country witnessed net inflows of $261 million in T-bills and PIBs.
Country-wise, $1.49 billion net from T-bills has been withdrawn by Investors from the UK, while $239.4 million net has been retracted by US investors during the month.
Cumulatively in 9MFY20, the country witnessed an injection of $3.49 billion hot money in T-bills and PIBs, out of which foreigners have pulled around $2.1 billion, indicating that $1.4 billion investment still parked in Pakistan’s debt securities.
Speaking of the last day of the month, foreign investors have pulled back $59.96 million from T-bills with Zero injection recorded.
The outflow of hot money is expected to continue further in coming days, as the fears of a global recession over COVID-19 spread likely to heighten risk aversion. In addition, the cut in policy rate has also made foreign investors reluctant to further inject their money in Pakistan’s debt market as they will now get low margins on their investment than before.
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SBP launches eLearning Financial Literacy Portal for Youth
April 01, 2020: State Bank of Pakistan in collaboration with National Institute of Banking & Finance (NIBAF) is implementing National Financial Literacy Program for Youth (NFLP-Y) to impart essential financial education to Pakistani youth and school going children for strengthening of their money management skills and enhance their understanding of financial matters.
National Financial Literacy Program for Youth (NFLP-Y) is launching Pakistan’s first online financial literacy course which is delivered through an engaging and interactive game. The game targets three age-groups – Children (9-12), Adolescents’ (13-17), and Youth (18-29) and can be accessed through your desktop browser or through a dedicated mobile phone application.
NFLP-Y’s easy-to-use eLearning portal and mobile app delivers its lessons in English and Urdu language through a story-based game format designed to help understand and apply principles of financial literacy. Users follow the story of two entrepreneurial families as they tackle personal, financial, and business decisions.
As the player of this game, the aim is to help the families create a successful business. In just a couple of hours, users can master the essentials of saving, budgeting, borrowing, and banking, among many other topics. Interactive questions follow each topic to assess the knowledge of the students. Those users who complete the course are awarded with a Certificate of Financial Literacy.
The game is called ‘POMPAK – Learn to Earn’. It’s free, ready to be used and available at the below addresses:
Google Play Store: https://play.google.com/store/apps/details?id=com.knowledgeplatform.pompak&hl=en
Apple App Store: https://apps.apple.com/us/app/pompak-learn-to-earn/id1503676474?ls=1
Laptop/Desktop (Web Version): https://nflpy.pk/elearning/
When closure of educational institutes in Pakistan is affecting studies of thousands of students, NFLP-Y is hoping to positively impact the youth of Pakistan with its eLearning portal. Anyone aged between 9-29 years old can download the game or use the web portal to gain the much-needed financial literacy training which will help them take control of their financial matters.
Press Release
Topline Securities issues PAI to acquire 16.53% share capital of Hallmark Company Ltd
April 1, 2020 (MLN): Topline Securities Limited has submitted a Public Announcement of Intention to acquire up to 82,640 ordinary shares i.e. 16.53% share capital of the Hallmark Company Limited, on behalf of the acquirer, Mr. Azneem Bilwani.
In a notice issued to the PSX on Wednesday, Topline Securities informed that it had been appointed as the Manager to Offer by the Acquirer.
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PMEX Index continues downward slide, ends at 3,500 points
April 01, 2020: Following the bearish trend, PMEX Commodity Index lost 25 points to close at 3,500 on Tuesday. The traded value of Metals, Energy and COTS/FX was recorded at PKR 4.362 billion and the number of lots traded was 9,825.
The major business was contributed by Gold amounting to PKR 1.673 billion, followed by NSDQ 100 (PKR 715.666 million), Crude Oil (PKR 614.287 million), DJ (PKR 488.895 million), Currencies through COTS (PKR 441.458 million), Silver (PKR 228.468 million), Platinum (PKR 75.386 million), SP500 (PKR 67.320 million), Copper (PKR 39.764 million), Natural Gas (PKR 15.860 million) and Brent Crude Oil (PKR 2.025 million).
In agriculture commodities, one lot of Wheat amounting to PKR 4.715 million and one lots of Cotton amounting to PKR 0.422 million was traded.
Press Release
President ICCI urges for strategy to reduce, post COVID-19 business loses
Apr 01, 2020: President, Islamabad Chamber of Commerce and Industry (ICCI) Muhammad Ahmed Waheed on Wednesday emphasized to evolve a comprehensive strategy for mitigating the business loses, during the COVID-19 epidemic in the country.
Due to coronavirus, the business community all over the country has adopted all necessary measures as directed by the government to control the pandemic, he told APP here.
The president ICCI informed that due to coronavirus issue, businesses and industrial units had been closed, but they had to pay the monthly commercial bills of gas and electricity, which was adding to their difficulties.
He also appealed to the government that receipt of commercial bills of gas and electricity from business and industry should be deferred for few months so that business community could be able to cope with the current crisis.
Ahmed further said that if deferment of receipt of utility bills was not possible, business community should be allowed to pay monthly commercial bills in three installments till the time the COVID-19 epidemic issue was over.
He said that whole of the country including the federal capital was in lockdown situation due to which markets and industrial units were closed.
However, the business community had to pay wages of workers and meet day to day expenses as well, he added.
He said that all the industries under his chamber had retained their employees on jobs as per direction of ICCI adding “We will pay all their dues and salaries in this crisis.”
The president said that in these circumstances, deferring the receipt of commercial bills of gas and electricity for few months or allowing them to pay monthly bills in 3 installments would provide significant relief to the business community.
Replying to question, he said that despite closure of industrial activities, industrialists had to pay mark up of banks on daily basis, which was putting more pressure on them.
He urged the government to issue directions to commercial banks to immediately defer the receipt of mark up from industrialists for few months to save the industry from further troubles.
Ahmed Waheed said that in these difficult circumstances, instead of earning profits, banks should realize the problems of industry and freeze the receipt of their mark up for few months to save the industrial units from closure.
He said that all the commercial and public sector banks were earning huge profit during good days and in recent critical situation, the government must give directions to these banks to provide maximum relief to the local business community.
APP
LCCI President, Razak Dawood discuss export issues, uplift plan
Apr 01, 2020: Lahore Chamber of Commerce & Industry (LCCI) President Irfan Iqbal Sheikh on Wednesday discussed the plan for export uplift with Prime Minister’s Advisor on Commerce, Textile, Industry, Production and Investment Abdul Razak Dawood through a teleconference on Wednesday.
The PM Advisor said that government was committed to cope with challenges being faced by the country. “We have to bring in export culture and export driven growth strategy,” he vowed.
Abdul Razak Dawood said the government was rectifying all those matters which went wrong in the past and taking facilitation steps to ensure businessmen market access. He said that engineering and other sectors were also being focused for exports. He also emphasized to bring in quality culture as it would definitely help in enhancing exports.
The PM’s Adviser said that he was persuading Pakistan’s manufacturers to send their products outside the country in quantity terms to attain the market share.
LCCI President Irfan Iqbal Sheikh said that Special permission should be granted to Industries for loading export cargo. He added that to bring more liquidity in the economy, it was requested that Refunds of export-oriented industries should be released on immediate basis.
He appreciated recently government’s initiative to enhance country’s exports growth after the economic slowdown due to COVID-19 outbreak.
Irfan Iqbal Sheikh said the government should revive zero-rating facility for export-oriented Industries and the income tax refunds of Rs 100 billion should be released immediately for the industry to overcome liquidity
issues. The government should not charge payments for DTRE and DLTL so that the issue of refunds was not created. He said that special permission should be granted for transportation of labour of export-oriented industries. The government should re-allow BMR (Balancing, Modernization and Replacement) Tax Credit of 10 per cent under Section 65B of Income Tax Ordinance.
In order to reduce the cost of doing business for the local industry, the gas tariff should be reduced and Income Tax Exemption certificates on electricity bills should be allowed for all the industries, as well as zero duty on raw materials for export oriented industries which were not manufactured locally.
Irfan Iqbal Sheikh said, the federal and provincial governments needed to publicly announce the approval for exporters, so that all government functionaries i.e administration and law enforcers should honour that approval, citing that this announcement would also help media to understand that exporters were permitted by the government to complete their pending export orders.
The LCCI President said that various essential food items in Pakistan were imported from Australia, Canada and Myanmar, and there was a chance that these countries might stop their exports of essential food items. The government should have a backup plan of finding substitute markets for importing essential food items on emergency basis.
He said that export industries across all sectors which confirmed export orders, should be allowed to operate in the lockdown period. A special mechanism should be devised by the government in this regard.
He said that workers were only in the factories for eight hours and for the remaining 16 hours they were on their own. Companies could not be held responsible for workers conduct outside the premises and expose them to coronavirus. He said that premises should not be either raided or sealed in case of possible cases.
Irfan Iqbal Sheikh said that due to closure of airspace, the courier companies like DHL and FEDEX were not operating in Pakistan. As a result the documents of importers were stuck in China, while their consignments had arrived at Karachi Port. The government should give a special provision to facilitate importers for releasing import consignments against copied documents with the payment of shipping guarantee which was equal to 100 per cent of margin value.
APP
Closing Bell: Hold on tight and enjoy the ride
April 01, 2020 (MLN): The capital markets started on a good note to the first trading session of April as KSE-100 Index carried its positive momentum from the last session by gaining 273 points to close at 29,505- level amid inflation rate which fell to the lowest level in seven months at 10.20%.
However, the index seemed to witness a breather today after yesterday’s sharp rally which was accompanied by foreign selling ($8.7million). Moreover, the United Nations has identified that economies like Pakistan and other low-income countries will face a severe economic crisis if sufficient support is not provided, as per research by Ismail Iqbal Securities.
The Index traded in a range of 776.84 points or 2.66 percent of the previous close, showing an intraday high of 29,692.19 and a low of 28,915.35.
Of the 98 traded companies in the KSE100 Index, 56 closed up 40 closed down, while 2 remained unchanged. The total volume traded for the index was 157.17 million shares.
Sectors propping up the index were Commercial Banks with 46 points, Automobile Assembler with 38 points, Inv. Banks / Inv. Cos. / Securities Cos. with 33 points, Oil & Gas Exploration Companies with 32 points and Textile Composite with 29 points.
The most points added to the index were MARI which contributed 35 points followed by DAWH with 35 points, MCB with 24 points, ENGRO with 23 points and UBL with 23 points.
Sector-wise, the index was let down by Food & Personal Care Products with 14 points, Transport with 5 points, Tobacco with 3 points, Paper & Board with 3 points and Modarabas with 1 points.
The most points taken off the index was by MEBL which stripped the index of 24 points followed by LUCK with 18 points, EFERT with 12 points, NESTLE with 10 points and OGDC with 10 points.
All Share Volume decreased by 28.15 Million to 193.71 Million Shares. Market Cap increased by Rs.47.72 Billion.
Total companies traded were 358 compared to 353 from the previous session. Of the scrips traded 214 closed up, 122 closed down while 22 remained unchanged.
Total trades increased by 1,410 to 89,119.
Value Traded decreased by 0.66 Billion to Rs.6.69 Billion
| Company | Volume |
|---|---|
| Maple Leaf Cement Factory | 24,646,500 |
| Hascol Petroleum | 17,936,000 |
| Unity Foods | 10,231,000 |
| Oil & Gas Development Company | 9,332,654 |
| Pioneer Cement | 9,255,000 |
| K-Electric | 8,561,500 |
| TRG Pakistan | 6,601,500 |
| Fauji Cement Company | 5,284,500 |
| D.G. Khan Cement Company | 4,670,500 |
| The Bank of Punjab | 4,335,000 |
| Sector | Volume |
|---|---|
| Cement | 51,106,356 |
| Oil & Gas Marketing Companies | 24,538,813 |
| Commercial Banks | 15,946,675 |
| Power Generation & Distribution | 14,299,546 |
| Technology & Communication | 12,997,900 |
| Oil & Gas Exploration Companies | 12,744,865 |
| Vanaspati & Allied Industries | 10,232,800 |
| Food & Personal Care Products | 9,694,390 |
| Chemical | 7,248,760 |
| Engineering | 5,695,500 |
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PKR depreciates by 13 paisa at interbank trade
April 01, 2020 (MLN): Pakistani rupee (PKR) depreciated by 13 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 166.83 per USD, against yesterday's closing of PKR 166.7 per USD.
The Rupee saw significant volatility in today’s session and traded in a range of 1.55 rupees per USD showing an intraday high bid of 167.05 and an intraday Low offer of 166.45.
Within the Open Market, PKR was traded at 164/167 per USD.
Meanwhile, the currency lost 94 paisa to the Pound Sterling as the day's closing quote stood at PKR 206.35 per GBP, while the previous session closed at PKR 205.41 per GBP.
On the other hand, PKR's value strengthened by 40 paisa against EUR which closed at PKR 182.74 at the interbank today.
On another note, within the money market, the overnight repo rate towards close of the session was 10.25/10.50 percent, whereas the 1 week rate was 10.75/10.90 percent.
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European yields fall as investors scramble for safety
April 1, 2020: Euro zone bond yields fell on Wednesday, with investors rushing into safe-haven government debt as the continuing spread of the novel coronavirus fed risk-off sentiment.
More than 74,000 new cases were reported globally on Tuesday, the largest increase in a single day since the virus began and almost 30% above the previous day's rise.
There are now over 850,000 cases and 42,000 deaths across 205 countries and territories, according to a Reuters tally at 0200 GMT on Wednesday. Italy and the United States have reported a total of more than 100,000 cases each.
Germany's Bund yield was down 4.7 basis points at -0.504% . Most of the rest of the core euro area market also saw declines, with France and Belgium seeing rates steady.
Lyn Graham-Taylor, fixed income strategist at Rabobank, said there was a strong risk-off mood across the financial markets on Wednesday.
The market can't "look around the corner" for a significant improvement in the euro zone economy given the recently published weak data and the lack of positive news in regards to the coronavirus, he said.
Data on Wednesday showed euro zone manufacturing activity collapsed last month as breaks in global supply chains caused by measures to curb the coronavirus pandemic crushed output.
The nosedive could worsen in coming months, a survey showed on Wednesday.
Elsewhere, Portugal launched the sale of a 7-year bond via a syndicate of banks, reflecting widespread sentiment in Europe that national treasurers are under pressure to finance huge government rescue programs to fight the economic fallout from the spread of COVID-19.
"I've heard rumours the books are going to be really big," Rabobank's Graham-Taylor said, adding that "it wouldn't be a surprise" if the number was much bigger than that of the 2015 issue, when books topped 3 billion euros ($3.3 billion).
Spain was the first euro zone member country to tap the primary market with a 7-year bond last week. Belgium also priced a 7-year bond on Tuesday.
Unicredit analysts said the 7-year maturity segment appears to be meeting with strong demand from financial institutions.
Portugal's 10-year government bond yield was last up 1.7 bps to 0.852%, a six-day high. ($1 = 0.9128 euros)
Reuters
Silk Bank requests SBP to extend the date for disclosure of Quarterly and Annual Accounts
April 1, 2020 (MLN): Silk Bank Limited has requested the State Bank of Pakistan (SBP) to extend the date for approval and disclosure of third Quarter of 2019 financials of the Bank till April 30th, 2020.
In a letter to Exchange, the Bank has also requested SBP to extend the date for approval of Annual Accounts of 2019 till May 31st, 2020, in view of current lockdown and the consequent extension in the various reporting requirements given to the banking industry by SBP.
The Bank’s request to SBP was also supported by the SBP’s decision to extend the timelines for the Annual Accounts of 2019 and Q1 Accounts of 2020 for the banking industry due to the Coronavirus pandemic.
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