May 15, 2022 (MLN): A turbulent week at PSX ended with a loss of 1,354 points or 3%, WoW to settle at 43,486 level as political uncertainty and indecisiveness over pre-requisites for IMF program resumption weighed heavily on investors’ sentiment with PKR-USD parity closing at an all-time lowest level of Rs192.53.
While country’s FX reserves which are currently standing at a 23-month low of $10.31bn (down by $190mn WoW) due to a delay in the revival of the IMF bailout and a lack of financial support from friendly countries added pressure on the local bourse.
Furthermore, inflationary concerns have picked up pace as lately, oil prices globally have started increasing, which again signifying towards the balance of payment management and higher local inflation.
In terms of USD, the index declined by a notable 5.99% from last week.
During the week, the bourse witnessed 2 sessions in favour of bull and 3 sessions in favour of bear. The KSE-100 index oscillated between high and low of 44,841 and 42,273 levels, respectively, before settling the week at 43,486 levels.
From the sector-specific lens, Banks, Cement, Technology, Fertilizers, and Power Generation & Distribution companies kept the index in red territory as they snatched 352, 212, 173, 153, and 63 points from the index respectively.
Contrary to that, Sugar & Allied Industries, and Tobacco during the week collectively contributed 10 points to the bourse.
Scrip-wise, SYS, LUCK, HBL, UBL, and EFERT were the worst-performing stocks during the week as they took away 122, 106, 79, 64, and 64 points from the index respectively. Whereas POL, MTL, LOTCHEM, SML, and COLG collectively added 91 points to the index.
Meanwhile, the KSE All Share market cap decreased by Rs243.4 billion or 3.27% over the week, being recorded at Rs7.19 trillion as compared to a market cap of Rs7.44tr recorded last week.
Flow-wise, foreigners were the net sellers during the week, offloading stocks worth $1.88mn compared to a net purchase of $2mn last week. Sector-wise, major selling was witnessed in Banks ($1.6mn) and Cement ($1.4mn).
On the local side, the majority of the buying was reported by Banks, Organizations, and Brokers amounting to $16.3mn, $1.5mn, and $1.1mn, respectively. However, Individuals and Mutual Funds stood on the other side with net selling of $10.4mn and $3.2mn respectively.
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May 15, 2022: Dr Murtaza Syed, Governor (Acting) State Bank of Pakistan (SBP) assumed the charge of Chairman of the Board of Directors of the Asian Clearing Union (ACU) in the 50th meeting of the ACU Board held in Islamabad on May 13, 2022, in both physical and virtual modes.
Established in 1974 with permanent headquarters in Iran, the Asian Clearing Union (ACU) is a payment arrangement system whereby member countries settle payments for intra-regional transactions among their central banks on a net multilateral basis. Currently, the Central Banks of Bangladesh, Bhutan, Iran, India, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are members of the ACU. The main objectives of the clearing union are to facilitate payments among member countries for eligible transactions, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among the participating countries.
The Secretary General of ACU, Mrs. Lida Borhan Azad, presented the annual report on the operations of the union for the year 2020, which the Board approved and adopted.
The Board reviewed progress on the ongoing projects being undertaken by the union. It reviewed a new web-based messaging system and constituted a sub-committee to finalize the recommendations for its implementation within six months. The Board also considered the report on issues faced by traders under the ACU mechanism and decided to implement the recommendations in the next three months. While appreciating the report on the use of domestic currencies for settlement of trade transactions prepared by the Reserve Bank of India (RBI), the Board requested RBI to convene a virtual seminar to enable member countries to gain a fuller understanding of the proposed mechanism. The Governors and Heads of the delegations of the countries also gave a broad overview of the economic development in their respective economies and shared their experiences in addressing the challenges emerging in the post-COVID-19 global landscape.
Governor Central Bank of Myanmar, Mr Than Nyein, Vice Governor Central Bank of Iran, Dr Mohsen Karimi, Chief Economist Central Bank of Bangladesh Mr Md. Habib ur Rehman, and Executive Director Nepal Rastra Bank Mr Ramu Paudel participated in the meeting physically. Governor Dr P. Nandalal Weerasinghe, Deputy Governor of Central Bank of Sri Lanka, T.M.J.Y.P Fernando, Governor Maldives Monetary Authority Mr Ali Hashim, Ms Yangchen Tshogel Central Bank of Bhutan and Executive Director RBI Mr Radha Shyam Ratho, attended the meeting virtually.
At the conclusion of the Board meeting, Mrs Lida Borhan Azad relinquished the charge of Secretary-General of the ACU after distinguished service to the Union for 15 years. While appreciating the services of Mrs Lida Borhan, the Board appointed Mr Farhad Morsali as the new Secretary-General of the ACU, as recommended by the Central Bank of Iran.
The meeting ended with all member countries emphasizing their commitment to further enhancing their trade and banking relationships. It was decided that central bank digital currencies (CBDCs) would be the special topic on which research would be conducted during Pakistan’s chairmanship of the ACU over the next twelve months.
May 15, 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.
Events of Importance through the week:
- On Saturday, Federal Minister for Finance and Revenue, Mr Miftah Ismail expressed the firm resolve of the Government to ensure stability in the Forex market
- On the same day, Mr Miftah Ismail emphasized that Kamyab Pakistan Program (KPP) should be re-examined and modified accordingly for ensuring a greater level of effectiveness, transparency and efficiency.
- The Securities and Exchange Commission of Pakistan (SECP) registered 2,345 new companies in April 2022 raising the total number of registered companies to 168,030.
- Meanwhile, in a bid to improve and ensure transparency in the process for capital formation, SECP has recommended a revamp of Companies (Further Issue of Shares) Regulations, 2020.
- The Oil and Gas Regulatory Authority (OGRA) on Friday raised the distribution price of Regassified Liquefied Natural Gas (RLNG) by up to $6.87 per million metric British thermal unit (mmbtu) for the month of May 2022.
- The government has approved an amnesty scheme for Pakistani citizens holding more than one Pakistani passport.
- President Dr Arif Alvi Friday approved the reconstitution of the Council of Common Interests (CCI) on the advice of the prime minister.
- On the upside, Pakistan has exported its first vehicle – made by Master Changan Motors – under the new Auto Industry Development and Export Policy (AIDEP 2021-26).
- Morgan Stanley Capital International (MSCI) has announced the addition of Oil & Gas Development Company (OGDC) and the deletion of Habib Bank Limited (HBL) from the constituent list of MSCI Frontier Market Index (FM).
- The Asian Development Bank (ADB) will provide the additional support of $2.5 billion for FY23, from which $1.5-2 billion can be available in the ongoing calendar year.
- On the agriculture side, the government has so far released funds amounting to over Rs7.761 billion to execute 26 ongoing and 07 new agriculture-related projects under its Public Sector Development Program (PSDP) for the financial year 2021-22.
- During the week, Easypaisa introduced an innovative feature that enables users to upgrade their mobile wallet accounts through in-app biometric verification.
- Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmud has taken the notice of massive hike in locally assembled cars and asked the Engineering Development Board (EDB) to submit a brief report on the responsible factors behind the surging prices.
- Pakistan’s B2B e-commerce startup Jugnu has launched its Buy Now, Pay Later solution for SME retailers.
- Pakistan’s MedznMore has raised more than $11.5 million in the country’s largest funding round by a healthcare startup, helping the company expand services and hire more tech talent.
- The Central Development Working Party (CDWP) on Wednesday cleared four development projects worth Rs136.74 billion during its meeting held here under the chairmanship of Deputy Chairman Planning Commission Dr Mohammad Jehanzeb Khan.
- On the same day, Minister for Privatization Abid Hussan Bhayo informed the National Assembly that privatization transactions worth Rs4.293 billion have been conducted from August 2018 to April 2022.
- On Tuesday, Federal Minister for IT and Telecom Aminul Haque stated that the cyberattack attempted on the NTC system of the ministry was foiled.
- Considering the cost of production and expected international price scenarios of future markets, the Ministry of National Food Security and Research has proposed to revise the intervention price of seed cotton (Phutti) to Rs6,000 per 40 kg for crop season 2022-23.
- The government is reverting urea price to the old price i.e. Rs1768/bag to provide relief to farmers.
- Federal Minister for Finance and Revenue, Miftah Ismail on Tuesday said that the upcoming budget aims at bringing in the fiscal consolidation and improving the overall resilience of the economy.
- During the departed week, Pakistan has selected a group of banks including JPMorgan Chase & Co. to manage US dollar-denominated bonds.
- Prime Minister Shehbaz Sharif on Tuesday, taking notice of the detection of the highly-infectious sub-variant of the Omicron virus, directed the restoration of the National Command and Operation Centre (NCOC).
- The Economic Coordination Committee (ECC) of the Cabinet on Monday has granted the approval to revise the prices of Wheat flour (Atta) and Sugar from Rs950 per 20 kg to Rs800 per 20 Kg and Rs85 per kg to Rs70 per kg respectively.
- Markaz Technologies, a Y-Combinator backed startup from Islamabad, has secured $2.4 million in seed funding led by Indus Valley Capital.
- Talks between Pakistan and International Monetary Fund (IMF) will likely to hold from May 18, 2022, in Doha. The matter pertaining to the removal of subsidies on petrol and electricity will also be discussed.
- On the equity side, the shareholders of Saif Holdings Limited (SHL) have approved the distribution of 46,111,748 numbers of ordinary shares as dividend in kind to SHL shareholders which are 11.93% of SPWL paid-up capital.
- The Organic Meat Company Limited (TOMCL) has become the first company to secure supply contracts worth USD2.2 million to Jordan and Kuwait to supply “Fresh-chilled Bone-in Beef” and “Commercially-Branded Frozen Bone-in Beef”.
- Arif Habib Limited (AHL), Manager to the Offer, on behalf of the acquirers, has submitted a Public Announcement of Offer (PAO) to acquire up to 1,967,700 ordinary shares of Karam Ceramics Limited, representing 13.52% of the total issued paid-up capital of the target company.
- The Issuer and the Advisor, KTrade Securities Limited to the Issue has once again decided to cancel the book building of Coeus Solutions Limited on the Growth Enterprise Market (GEM) Board until further notice.
- Oilboy Energy Limited (PSX: OBOY) has decided to raise Rs150 million through a right issue of 15mn ordinary shares at a par value of Rs10/- each.
- Ittehad Chemicals Limited has commenced the commercial operations of its state-of-the-art LABSA/SLES Plant.
- TPL Properties Limited (TPLP) has informed that its wholly-owned subsidiary TPL REIT Management Company Ltd (TPL RMC) has successfully entered into Unit Subscription Agreements for its first funding round of Rs18.35 billion in its TPL REIT Fund I (Fund) with all initial investors.
- Systems Limited (PSX: SYS) has entered into a term sheet with the sponsor shareholders of National Data Consultant (Pvt.) Limited (NdcTech) for the acquisition of 100% of the issued and paid-up share capital of NdcTech.
- Ghani Global Glass Limited (GGGL) has successfully commenced the commercial operations for manufacturing of glass tubing from its newly installed 25 tons per day (TPD) second furnace from May 07, 2022.
- Agritech Limited’s (AGL) urea plant has now resumed its operations after an improvement in the demand-supply position of gas as Sui Northern Gas Pipelines Limited (SNGPL) restored the supply of RLNG from May 7, 2022.
- The shareholders of the G3 Technologies Limited (PSX: GTECH) in their Extra-Ordinary General Meeting (EoGM) held on May 7, 2022, have resolved to increase the authorized share capital of the company by Rs500 million.
- Oil & Gas Development Company Limited (OGDCL) has announced that the Directorate General of Petroleum Concessions (DGPC) has provisionally awarded a new exploration block, Chah Bali, located in Balochistan to OGDCL and Pakistan Oilfields Limited (POL).
- The Pakistan Credit Rating Agency Limited (PACRA) has maintained entity ratings of Mughal Iron & Steel Industries Ltd- PP Sukuk at ‘A+’ for the long term with a stable outlook.
- The aggregate shareholding of Ismail Industries Limited (ISIL) in the Bank of Khyber (BOK) has increased to 269,383,781 shares which comprise 24.43% of the total issued voting shares of the bank.
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