December 03, 2021: European stock markets advanced Friday in opening deals, mirroring gains across most Asian markets on easing Omicron concerns ahead of key US data.
In initial trade, London's benchmark FTSE 100 index gained 0.5 percent to 7,165.33 points, compared with the closing level on Thursday.
In the eurozone, Frankfurt's DAX won 0.8 percent to 15,378.45 points and the Paris CAC 40 added 0.8 percent to 6,849.80.
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January 17, 2022: China's central bank on Monday unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, while some market analysts expect more policy easing this year to cushion an economic slowdown, Reuters reported today.
The People's Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.
Thirty-four out of the 48 traders and analysts, or 70% of all participants, polled by Reuters last week predicted no change to the MLF rates in January, with the rest betting on a rate cut.
The world's second-largest economy has shown signs of slowing after a rapid rebound from the COVID-19 slump, with concerns about the financial health of property developers and the rapid spread of the Omicron coronavirus variant clouding the outlook.
"The PBOC's decision to ease early in January suggested that economic downward pressure intensified at end-2021 and room for improvements in the first quarter of this year is not huge," said Ken Cheung, chief Asian FX strategist at Mizuho Bank.
Cheung expects that the PBOC could deliver more easing measures this year than previously expected by market analysts.
Such expectations were also reflected in the bond market, with China's 10-year treasury futures rising to their highest level since June 2020 and the yield on China's benchmark 10-year government bonds falling more than 2 basis points in early trade.
Market analysts said the size of the rate cut and the timing were a big surprise, and they believe further monetary stimulus could follow.
"The 1Y LPR signaled that another rate cut was coming," said Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong.
"However, the 10-bps cut was larger than expected, suggesting that the authorities have become more preoccupied about weakness in the economy," he said, adding he also expects an additional 100 bps reduction to banks' reserve requirement ratio (RRR) this year.
With a 500-billion-yuan worth of MLF loans maturing on Monday, the operation resulted in a net injection of 200 billion yuans into the banking system.
The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10% from 2.20%, when it offered another 100-billion-yuan worth of reverse repos into the banking system. ($1 = 6.3524 Chinese yuan).
Reuters
January 16, 2022 (MLN): The highlights of the important economic and business events that took place during the last week are in order so as to become acquainted with the recent developments in Pakistan’s economic and public policy.
Announcements:
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January 16, 2022 (MLN): This week, the benchmark KSE100 index closed up by 417 points on a cumulative basis or 0.91% WoW to settle at 45,763 points.
The market kicked off the week on a positive note amid growing optimism on mini-budget approval and stability in USD-PKR parity, a report by Spectrum Securities said.
On the economic front, although, forex reserves dipped by $117mn to $23.9bn, however, PKR appreciated by 60paisa WoW against USD and settled at PKR 176.07/$.
However, in later sessions, profit-taking was witnessed on the back of increasing international oil prices and Pakistan requesting IMF to shift board meeting for approval towards tail end of Jan’22.
In terms of index contribution, the top 5 sectors throughout the week were commercial banks (282pts), miscellaneous (54pts), chemical (50pts), power generation & distribution companies (47pts), and oil & gas exploration companies (36pts).
Commercial banks added the most points in the index as advances witnessed a growth of 19% YoY (highest in 3-years) given the overall economic recovery and new financing schemes by SBP. Moreover, investors also factored in prospects of improvement in profitability on the back of increasing interest rates.
On the flip side, cement, technology, tobacco, fertilizer and investment banks/companies took away 181 points from the KSE100 Index. The cement sector witnessed the highest-selling pressure during the week as it alone eroded 66 points from the index on the back of a rebound in international coal prices during the week.
Scrip-wise, HBL, MCB, PSEL, HUBC, and GOLG were the best-performing stocks during the week as they added 298 points to the index, whereas SYS, LUCK, ENGRO, PAKT, and TRG took away 165 points from the index.
Flow wise, foreigners were the net buyers during the week, purchasing stocks worth $0.53mn compared to $24.2mn last week. Major buying was witnessed in technology ($0.5mn) and power generation ($0.4mn).
On the local side, the majority of the selling was reported by mutual funds, corporations and insurance companies amounting to $9.95mn, $2.45mn, and $0.15mn respectively. However, banks and individuals stood on the other side with net buying of $6.8mn and $2.9mn respectively.
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January 16, 2022 (MLN): Government has set the target of disbursing loans worth Rs50 billion under the Kamyab Jawan Program (KJP) this year to promote entrepreneurship amongst youth and create job opportunities in the country, as reported by Radio Pakistan.
This was stated by Minister of State for Information and Broadcasting Farrukh Habib and Special Assistant on Youth Affairs Usman Dar at a news conference in Islamabad on Saturday.
Farrukh Habib pointed out that loans of Rs30bn were disbursed under Kamyab Jawan Program over the last two years under which twenty-two thousand new businesses were opened. This, he said, provided fifty thousand direct jobs to the youth and indirectly led to the creation of thousands of other jobs.
The Minister of State for Information and Broadcasting said startups are especially being promoted under Kamyab Jawan Program. He said a proposal will be floated in the cabinet for approval under which no guarantee will be sought from those acquiring loans up to Rs2 million.
Farrukh Habib said under an Rs10bn Skill for All Program, hi-tech certification is being provided to the youth in areas such as artificial intelligence, cloud computing, graphic designing, and so on.
He stated under this program, scholarships have been awarded to one hundred thousand youth whilst another sixty-one thousand will be provided on the 31st of this month.
“The government is targeting to enhance its IT exports to three billion dollars during the current fiscal year and this skill development program will help strengthen our IT exports,” he added.
In his remarks, Usman Dar said 2022 has been declared as the year of youth and different activities will be arranged during this year to promote the soft image of Pakistan. He said, “We are also considering launching a sports scholarship program for the youth.”
Usman Dar highlighted that the loans under KJP are being provided in the most transparent manner.
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January 16, 2022 (MLN): The weekly economic roundup summarizes the country's key economic and financial data for the week from various sectors to keep an eye on next week's trends.
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