Foreign investors take a pause from entering, exiting local...

June 1, 2020 (MLN): Pakistan did not witness any inflow nor outflow in the government short-term securities (T-bills) on May 28th, 2020, this certainly was both the best and worst of times for the country.

 According to the daily SCRA data released by SBP, the net outflow for the said day stood at $2.24 million as $2.4 billion of inflows against the outflows of $4.65 billion have been recorded in local equities.

So far this month, the disinvestment in Debt Securities particularly T-bills was to the tune of $182.7 million while inflows stood at $800 thousands.

Cumulatively from fiscal year to date, country witnessed an inflow of $3.64 billion from, out of which more than $3 billion has been withdrawn by foreigners from T-bills, indicating that only $580.98 million worth of investment left in government’s short-term debt instrument (T-bills).

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PMEX Commodity Index gains 69 points to 4,132-level

June 01, 2020: On Friday at Pakistan Mercantile Exchange Limited, PMEX Commodity Index closed at 4,132, adding 69 points. The traded value of Metals, Energy and COTS/FX was recorded at PKR 6.768 billion and the number of lots traded was 12,692.

The major business was contributed by Gold amounting to PKR 2.148 billion, followed by Currencies through COTS (PKR 1.917 billion), Crude Oil (PKR 745.386 million), Silver (PKR 601.546 million), NSDQ 100 (PKR 420.535 million), Platinum (PKR 323.187 million), DJ (PKR 304.735 million), SP500 (PKR 154.104 million), Natural Gas (PKR 144.288 million) and Copper (PKR 8.312 million).  

In agriculture commodities, two lots of Soybean amounting to PKR 13.694 million, two lots of Wheat amounting to PKR 8.458 million and 8 lots of Cotton amounting to PKR 3.728 million were traded.

Closing Bell: Cobwebs blow away?

June 1, 2020 (MLN): After depicting relatively depressing performances from the past few sessions, the KSE-100 gained some pulse to start the new month, as it accumulated 90 points in today’s session and closed at 34,022 level, i.e. around 0.27% higher than the previous session’s close.

The trading remained range bound throughout the session. The sentiments within the market saw a boost after the PBS released inflation numbers as per which May’20 inflation settled at 8.2% in line with the expectations.

However, according to Aba Ali Habib Securities, the investors remained cautious at this level primarily due to ongoing NCC meeting that will decide fate of lockdown, furthermore, the pre-budget uncertainty drove investors sentiments throughout the trading session.

The Index traded in a range of 241.85 points or 0.71 percent of previous close, showing an intraday high of 34,061.92 and a low of 33,820.07.

Of the 94 traded companies in the KSE100 Index 38 closed up 56 closed down, while 0 remained unchanged. Total volume traded for the index was 124.14 million shares.

Sectors propping up the index were Commercial Banks with 169 points, Oil & Gas Exploration Companies with 52 points, Pharmaceuticals with 6 points, Cable & Electrical Goods with 6 points and Glass & Ceramics with 2 points.

The most points added to the index was by MCB which contributed 56 points followed by UBL with 37 points, OGDC with 35 points, HBL with 27 points and BAHL with 25 points.

Sector wise, the index was let down by Cement with 41 points, Power Generation & Distribution with 20 points, Insurance with 18 points, Inv. Banks / Inv. Cos. / Securities Cos. with 18 points and Food & Personal Care Products with 12 points.

The most points taken off the index was by HUBC which stripped the index of 21 points followed by LUCK with 18 points, DAWH with 14 points, NESTLE with 12 points and MARI with 12 points.

All Share Volume decreased by 34.93 Million to 198.10 Million Shares. Market Cap increased by Rs.8.25 Billion.

Total companies traded were 354 compared to 341 from the previous session. Of the scrips traded 141 closed up, 195 closed down while 18 remained unchanged.

Total trades decreased by 1,883 to 85,647.

Value Traded decreased by 2.93 Billion to Rs.7.26 Billion

CompanyVolume

Top Ten by Volume

Pak Elektron22,743,000
Unity Foods14,232,500
Fauji Foods11,381,500
TRG Pakistan10,321,500
Jahangir Siddiqui & Co. Ltd.10,260,500
Hascol Petroleum8,909,000
Hum Network7,408,000
Maple Leaf Cement Factory5,963,000
Siddiqsons Tin Plate4,668,500
Oil & Gas Development Company4,021,658

 

SectorVolume

Top Sector by Volume

Technology & Communication24,650,700
Cable & Electrical Goods23,508,700
Commercial Banks16,761,155
Food & Personal Care Products15,514,080
Cement15,122,759
Inv. Banks / Inv. Cos. / Securities Cos.14,364,500
Vanaspati & Allied Industries14,232,500
Oil & Gas Marketing Companies13,087,746
Oil & Gas Exploration Companies7,342,333
Power Generation & Distribution7,295,285

 

 

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PKR weakens by 98 paisa against greenback

June 01, 2020 (MLN): Pakistani rupee (PKR) depreciated by 98 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 164.08 per USD, against last session's closing of PKR 163.1 per USD.

Within the Open Market, PKR was traded at 163.00/164.00 per USD.

Meanwhile, the currency lost 2.9 rupees to the Pound Sterling as the day's closing quote stood at PKR 203.66 per GBP, while the previous session closed at PKR 200.75 per GBP.

Similarly, PKR's value weakened by 1.8 rupees against EUR which closed at PKR 182.77 at the interbank today.

On another note, within the money market, the overnight repo rate towards close of the session was 8.20/8.30 percent, whereas the 1 week rate was 8.10/8.25 percent.

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Atlas Honda’s yearly profits drop by 4 percent

June 1, 2020 (MLN): Atlas Honda Limited has revealed the financial results for the year ended March 31, 2020, as per which, the net profits amounted to Rs. 3.07 billion (EPS: 24.81), nearly 4 percent lower than the figures reported in the last year.

The company also announced a final cash dividend for the year at Rs. 8.5 per share, i.e. 85%. This is in addition to interim dividend already paid at Rs. 6.5 per share i.e. 65%.

According to the financial report released on Monday, the topline income of the company grew by merely 3 percent, whereas the cost of sales surged by around 4 percent. This resulted in a 6.7 percent decline in gross profits.

While the major expense heads of the company, i.e. Sales/Marketing and Administrative depicted insignificant changes over the year, the non-core income showed an increase of 25 percent while non-core expenses fell by 16 percent.

The company received a huge blow in the form of a 119 percent increase in finance costs, owing to an increase in borrowings. The income tax expense, however, fell by 5.2 percent, providing some cushion to the financial wellbeing of the company.

Profit and Loss for the year ended March 31, 2020 ('000 Rupees)

 

Mar-20

Mar-19

% Change

Sales

84,775,972

82,412,548

2.9%

Cost of Sales

(78,660,040)

(75,856,677)

3.7%

Gross Profit

6,115,932

6,555,871

-6.7%

Sales and Marketing Expenses

(1,981,571)

(1,924,062)

3.0%

Administrative expenses

(652,273)

(640,209)

1.9%

Other income

1,370,948

1,097,636

24.9%

Other operating expenses

(388,968)

(463,793)

-16.1%

Share of profit of an associate - net of tax

4,443

15,698

-71.7%

Profit from operations

4,468,511

4,641,141

-3.7%

Finance Cost

(56,718)

(25,818)

119.7%

Profit before taxation

4,411,793

4,615,323

-4.4%

Taxation

(1,333,393)

(1,406,664)

-5.2%

Profit after taxation

3,078,400

3,208,659

-4.1%

Earnings per share - Rs.

24.81

25.86

-4.1%

 

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Govt reduces LPG price by 2 rupees

June 1, 2020 (MLN): The price of Liquified Petroleum Gas (LPG) has been reduced by Rs. 2 per kg to Rs. 110 rupees per kg.

Similarly, the price for domestic cylinder has been slashed from Rs. 1,332 per 11.8 kg to Rs. 1,298 per 11.8 kg.

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Pakistan has cheapest fuel cost in South Asia: PM

June 1, 2020: Prime Minister Imran Khan says after reduction in oil prices by the government, Pakistan has the cheapest fuel cost comparing to other states in South Asia.

In a tweet, he said the government has further reduced petrol, light diesel oil and kerosene oil prices.

The Prime Minister said India is almost exactly the double while Bangladesh, Sri Lanka and Nepal are all 50 to 75 percent more expensive than Pakistan.

Radio Pakistan

Gov’t releases Rs 583 bn for development projects

Jun 01, 2020: The federal government has so far authorized release of Rs 583 billion for various ongoing and new social sector uplift projects under its Public Sector Development Programme (PSDP) 2019-20, as against the total allocation of Rs701 billion.

Under its development programme, the government has released an amount of Rs 244.2 billion for federal ministries, Rs 194.18 billion for corporations and Rs 43.56 billion for special areas, according to a latest data released by Ministry of Planning, Development and Reform.

Out of these allocations, the government released Rs 49.73 billion for security enhancement in the country for which the government had allocated Rs53 billion during the year 2019-20.

An amount of Rs 97.64 billion has also been released for the blocks managed by finance division under the government's 10 years development programme. Similarly for Higher Education Commission, the government released an amount of Rs 28.28 billion out of its total allocation of Rs 29 billion while Rs 270.47 million were released for Pakistan Nuclear Regulatory Authority for which the government had allocated Rs 270.47 million in the development budget.

For National Highway Authority, the government released Rs167.70 billion against its allocations of Rs 173.53 billion.

Under annual development agenda, the government also released Rs 8.67 billion for Railways Division out of total allocation of Rs12.56 billion, Rs8.39 billion for Interior Division, and Rs8 billion for National Health Services, Regulations, and Coordination Division.

Revenue Division received Rs 5.84 billion, whereas the Cabinet Division also received Rs 34.16 billion for which an amount of Rs 35.97 billion has been allocated for the year 2019-20.

The government also released Rs 27.11 billion for Azad Jammu and Kashmir (AJK) block and other projects out of its allocations of Rs 27.26 billion and Rs 16.34 billion for Gilgit Baltistan (Block and other projects).

APP

SECP shares key tax proposals critical for capital markets...

June 1, 2020: In due consultation with the stakeholder and through thorough internal review and deliberations, the SECP has shared some key tax proposals considered to be critical for capital markets and corporate sectors. These proposals broadly cover the following areas

1.      Addressing the anomaly created in the definition of security u/s 37A for computation of capital gains tax on listed securities. New listings have been severely impacted due to withdrawal of income tax rules providing taxation of capital gains on disposal of shares of a private after listing at the exchange, in light of a court judgment.

2.      For unlocking the potential of Private Funds, proposals to allow perpetual pass-through status to all categories of private funds have been proposed. Further, considering revamping of the regulatory regime and introduction Private Funds Regulations, 2015 also require consequential changes to the Income Tax laws

3.      Proposal for promoting documented REIT structures was aiming at addressing short term and inadequate tax incentives for promotion of documented real estate sector through REITs affecting further interest in this area. These include to allow perpetual pass-through status covering all categories of REITs, granting exemption from capital gains, taxation of dividends from REITs and advance tax on the transfer of property

4.      Reducing the cost of the business in the insurance sector that is hampering its growth and penetration, is another area covered in the proposal. Since insurance enables risk mitigation and addresses financial fragility issues, taxation at federal and provincial levels on insurance is proposed to be rationalized. FBR’s support is sought for proposals relating to provincial taxes and exercise duty with the committee, constituted to inter alia look into the harmonization of provincial taxes.

5.      Proposal for the development of a regulated commodity market by addressing the issue of withholding tax u/s 153 on the physical settlement. Applicability of withholding tax on the sale of commodities in case of physical settlement of trades through Pakistan Mercantile Exchange platform is a major impediment for participants to trade on the regulated platform, hence proposed to be exempted;

6.      Inequality of taxation between incorporated and unincorporated businesses is discouraging corporatization and documentation. Different options are being considered for reducing this inequality over a period of time.

7.      Considering the market condition, reducing CGT rates for 2 years on the disposal of listed securities can be looked into favorably and restoring the distinction between short-term gains and long-term gains.

The SECP and FBR are working on several aspects of these proposals in close coordination. 

Press Release

Fatima Fertilizer’s annual net profits remain flat

June 01, 2020 (MLN): Fatima Fertilizer Company Limited has announced its annual financial results ended December 31, 2019, wherein, the company has posted net profits of Rs 12.07 billion, depicting a meagre growth of 1.31% as compared to the net profits of Rs 11.91 billion of the previous year.

This has translated into earnings per share- basic and diluted which clocked in at Rs 5.75 against Rs 5.67 in the aforementioned period.

Alongside financial results, the Board of Directors of the company announced a final cash dividend for the year ended December 31, 2019 at Rs 2 per share i.e. 20%.

As per the financial statement issued by the company, the sales of the company grew by 46% YoY. However, a significant increase in the cost of sales by 83.57% YoY made the gross margin shrink to 37%.

More notably, it bore colossal finance cost which increased 2 times YoY from Rs 1.82 billion to Rs 3.76 billion when compared to the prior year owing to the higher interest rate, restricting the bottom line. Moreover, the administrative expenses increased by 20% YoY while other expenses plunged by 13.33%.

Meanwhile, other income of the company soared by 80.7%, from Rs 603 million to Rs 1.09 million, YoY. Income tax expenses also jumped by 5%.

Financial Results for the year ended on December 31, 2019 ('000 Rupees)

 

Dec-19

Dec-18

% Change

Sales

 74,964,214

 51,309,994

46.10%

Cost of sales

 (47,065,331)

 (25,639,375)

83.57%

Gross profit

 27,898,883

 25,670,619

8.68%

Distribution cost

 (3,800,064)

 (3,684,686)

3.13%

Administrative expenses

 (2,778,727)

 (2,316,965)

19.93%

Finance cost

 (3,760,909)

 (1,822,902)

106.31%

Other operating expenses

 (1,480,466)

 (1,708,069)

-13.33%

Other income

 1,089,749

 603,101

80.69%

Share of profit from Associates

 24,687

 49,211

-49.83%

Profit before tax

 17,193,153

 16,790,309

2.40%

Taxation

 (5,123,471)

 (4,876,754)

5.06%

Profit for the period

 12,069,682

 11,913,555

1.31%

Earnings per share - basic and diluted (Rupees)

 5.75

 5.67

1.41%

 

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