December 03, 2020: Wall Street's main stock indices pushed higher on Thursday after Ryanair confirmed a major order of Boeing 737 MAX jets.
The deal for 75 of the planes by the Irish low-cost carrier was the first major order for the 737 MAX since the aircraft was grounded for 20 months following two fatal crashes.
The news, along with a successful test flight by American Airlines, help send shares in Boeing higher as the aircraft moves closer to returning to the skies after winning approval by US regulators last month.
Shares in Boeing surged 7.4 percent higher.
In late morning trading, the Dow was 0.6 percent higher, with the S&P 500 pushing further into record territory.
- Stimulating development -
Sentiment was also helped by movement towards a new stimulus package.
Speaker Nancy Pelosi threw her support behind a $908-billion compromise virus relief package proposed by a bipartisan group of lawmakers on Tuesday. The proposal is however half what Democrats had previously been pushing for.
"The narrative about how the market is feeling optimistic about 2021 recovery prospects because of the arrival of Covid vaccines is growing a bit tired, yet market participants have been given a stimulant with the increased buzz on Capitol Hill about the need to get another stimulus package done soon," said market analyst Patrick J. O'Hare at Briefing.com.
He added that the continued high number of new jobless claims along with more than 100,000 Covid-19 hospitalisations in the US were factors in the market viewing it as likely that a deal will be done relatively soon.
- Virus impact -
The eurozone's equity markets slipped on survey data indicating the region's economy continued to be battered by coronavirus fallout.
In eurozone trades Thursday, Frankfurt's DAX 30 index shed 0.5 percent and the Paris CAC 40 dropped 0.2 percent.
Data provider IHS Markit said its closely-watched composite eurozone purchasing managers' index (PMI) fell to 45.3 points in November from 50 in October, according to final estimates.
Britain's services PMI dropped to 47.6 from 51.4. A level below 50 points indicates contraction.
Nevertheless, London's FTSE 100 managed a 0.4 percent gain thanks to a good performance by international mining stocks.
Meanwhile the pound surged to its highest level in a year, briefly rising above $1.35, after a government official expressed confidence on reaching a post-Brexit trade deal with the EU.
"It's the kind of comment that has been heard before in the last couple of weeks, without anything materialising," said market analyst Connor Campbell at Spreadex. "Nevertheless, with the deadline looming, sterling will take what it can get."
Oil prices drifted higher as a crucial OPEC gathering debated whether to extend the current level of output cuts.
- Key figures around 1630 GMT -
- New York - Dow: UP 0.6 percent at 30,057.37
- London - FTSE 100: UP 0.4 percent at 6,490.27 points (close)
- Frankfurt - DAX 30: DOWN 0.5 percent at 13,252.86 (close)
- Paris - CAC 40: DOWN 0.2 percent at 5,574.36 (close)
- EURO STOXX 50: DOWN less than 0.1 percent at 3,518.78
- Tokyo - Nikkei 225: FLAT at 26,809.37 (close)
- Hong Kong - Hang Seng: UP 0.7 percent at 26,728.50 (close)
- Shanghai - Composite: DOWN 0.2 percent at 3,442.14 (close)
- Euro/dollar: UP at $1.2149 from $1.2115 at 2200 GMT
- Pound/dollar: UP at $1.3493 from $1.3365
- Dollar/yen: DOWN at 103.82 yen from 104.42 yen
- Euro/pound: DOWN at 90.07 pence from 90.65 pence
- West Texas Intermediate: UP 0.2 percent at $45.38 per barrel
- Brent North Sea crude: UP 0.3 percent at $48.41
December 03, 2020: The members of the OPEC group of oil producers are meeting with their allies on Thursday to see if they can reach an accord on extending production cuts over the coming months.
The video-conference meeting of the OPEC+ grouping was pushed back from Tuesday and comes after three days of inconclusive discussions among the 13 members of OPEC proper.
Observers say the postponement points to an agreement being harder to reach than initially thought.
The meeting was originally scheduled for 1300 GMT but eventually started almost two hours later.
The first wave of the coronavirus pandemic sent oil demand -- and prices -- plummeting in the spring, with the benchmark American contract even going into negative territory for the first time in history.
After tough negotiations in April, OPEC+ -- which includes Russia -- agreed on drastic production cuts in order to try to put a floor under oil prices.
Despite hitting producers' revenues hard, those cuts did help drag prices back up again.
However, the second wave of the pandemic has dashed hopes of a rapid "V-shaped" recovery for the economy and for oil demand.
Most producers, including OPEC kingpin Saudi Arabia, therefore favour an extension of the current agreement, which entails a cut of 7.7 million barrels per day (bpd) and was scheduled to be eased to 5.8 million bpd on January 1.
"OPEC and allies are said to be leaning towards a rollover of current cuts with a gradual increase in output," according to analyst Neil Wilson from Markets.com.
"Whether the easing would begin in January or after the three-month delay discussed before the meeting is unclear," wrote Stephen Innes of Axi.
After falling slightly in early Thursday trading, prices for both the US crude oil benchmark West Texas Intermediate (WTI) and Europe's Brent North Sea were holding steady just after the start of the OPEC+ meeting, at $45.30 and $48.36 respectively.
- Thorny subjects -
Markets were expecting producers to be able to agree on an extension of three to six months, with many viewing Monday's meeting as a formality to sign it off.
But a recent surge in crude prices -- up by 25 percent over the course of November -- together with positive news from several companies on coronavirus vaccines means some countries may need more convincing of the need for further sacrifices.
Meanwhile, the perennially thorny subject of whether all members are respecting production quotas laid down in previous agreements seems to once again be on the table.
Some insist that those who are currently overproducing be made to comply before further restrictions are imposed.
"It is unlikely that the strict implementation of the agreed cuts... will be achieved, which will undermine their effectiveness and confidence in the group," according to Eugen Weinberg of Commerzbank.
The cartel will also have to pay attention to developments in the three members which have been granted exemptions from quotas -- Libya, Iran and Venezuela.
Libya's production had been almost wiped out by civil conflict but has spiked since October and now stands at over one million bpd, according to the country's National Oil Corporation (NOC).
In the longer term, Iran's offer on the oil market may also increase if the incoming US administration pursues a policy of detente with Tehran and relaxes sanctions.
That would lead hundreds of thousands of barrels coming on to the market, exerting a fresh downward pressure on prices.
December 3, 2020: Mobile banking transactions increased to 36.4 million amounting to Rs. 908.7 billion in Q1-FY21, marking an increase of 139% by volume and 211% by value when compared with the same period last year.
The State Bank of Pakistan released its Quarterly Payment System Review (QPSR) for the first quarter, July – September 2020, of the fiscal year 2020-21 today, which shows strong growth in the pace of digital financial transactions in the country.
Promoting digital financial services is a key goal of the SBP. According to the data reported in the review, digital payment transactions in Pakistan have increased significantly during Q1-FY21, largely due to the impact of measures taken by SBP creating incentives for customers. Growth in digital payment infrastructure, as well as the emergence of new payment aggregators, have also been a contributing factor in this growth. Moreover, it also reflects the changes in consumer’s preference for digital transactions amid the Covid19 situation.
According to the Q1-FY21 QPSR, 253.7 million e-Banking transactions were conducted by customers valuing Rs. 19 trillion. E-banking transactions comprise Real-Time Online Branches (RTOBs) Transactions, ATM Transactions, Internet Banking Transactions, Mobile Phone Banking Transactions, e-commerce, POS, and Call Center/ IVR Banking. Although, RTOB transactions have a major share of e-banking transactions in terms of value, about 80%, other types of transactions are more than 83% of the e-banking transactions in terms of volume. During Q1-FY21, the most promising uptake was seen in internet banking and mobile banking transactions as the number of registered mobile phone banking users reached 8.9 million showing an increase of 41% over Q1-FY20 and the number of internet users touched 4.3 million with a growth of 26% over the same period.
Accordingly, mobile banking transactions increased to 36.4 million amounting to Rs. 908.7 billion, marking an increase of 139% by volume and 211% by value when compared with the same period last year. Similarly, internet banking transactions increased to 18.9 million, valuing Rs. 1.1 trillion during Q1-FY21, registering a growth of 55% in volume and 89% in value, in comparison to the same period last year.
Another major avenue of e-banking transactions is through Point of Sale (POS), whereby people make transactions using credit or debit cards typically for shopping at markets. The number of transactions through POS machines that declined sharply during Q3 and Q4 of FY20, owing to the closure of markets amid Covid19, recovered significantly in Q1-FY21.
The number of transactions through POS were recorded at 16.8 million amounting to Rs. 92.3 billion, showing an increase of 47% in terms of volume and 49% in value during Q1-FY21 over Q4-FY20. In addition to POS-based transactions, card-based transactions on e-commerce portals also followed a similar trend – a fall during Q3 and Q4 of FY20 due to Covid19 related decline in economic activity, and a recovery in Q1-FY21. Such transactions were recorded at 3.9 million, amounting to Rs. 11.9 billion in Q1-FY21, exhibiting strong growth of 70% by volume and 27% by value when compared with the Q4-FY20. Nevertheless, strong growth in e-commerce transactions can also be witnessed as the number of transactions and their value grew by 77% and 47% when compared with Q1-FY20.
December 3, 2020 (MLN): Following the global markets, Pakistan Stock Market rallied in November on three effective COVID-19 vaccine announcements, setting the stage for a more rapid economic recovery next year.
With the ambition to make investors know its stance of the capital market for December, JS Global held a webinar today on ‘Market Monthly Outlook’ wherein its research analysts discussed the upside and downside risks to stocks.
Many of the sectors which have been hit hard due to lockdown amid pandemic- Auto, Cement, Steel - have shown much recovery or gains on the back of encouraging economic climate and lower international crude oil prices.
Over the past several months, the KSE-100 index has been trading in a range of 38k to 42k. It is expected that any sharp jump can break the established range.
As per JS Global research analyst, there are high- upside opportunities available for investors in Cement, Steel, Auto, Banks, and some selected refineries.
Talking about the outlook of refineries, JS Global believes that the exchange and inventory losses will be reduced going forward as the environment is helpful for the growth of refineries wherein National Refinery Limited (NRL) has been suggested a compelling growth stock on the board.
The other growth stocks to buy are Bank Al Habib and United Bank Limited (UBL), according to JS Global Capital while Cherat Cement was also the pick.
Moreover, it is expected that IMF conditionality will have a positive impact on the financial market.
While the capital market has maintained several positive elements, in view of JS Global, there is increased uncertainty regarding the resurgence of COVID-19 cases has raised risks as the reimposition of lockdown may reverse the long-term positives. In addition, the efficacy of the vaccine after the rollout is something where all eyes are on.
Further, the markets are expected to look for another risk regarding Pakistan Democratic Movement (PDM) rallies.
JS Global apprised that solution of the monster of Circular Debt will be the biggest positive trigger for the capital markets.
The global political risks due to Iran-Israel tension cannot be ignored, JS Global concluded.
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December 3, 2020 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Thursday in which it sold 5 year variable rental rate GOP Ijara Sukuk worth Rs.68.86 billion.
Bids for the Fixed Rental Rate Sukuk were rejected.
Combined auction target was Rs.50 billion.
The SBP Received bids worth Rs.84.67 billion for the Variable Rate Ijara Sukuk with a range of -50 to 20 bps over benchmark out of which it accepted Rs.68.86 billion at a cut off margin of -10 bps.
Bids worth Rs.5.80 billion were received for the fixed rental rate Ijara sukuk with a fixed rental range 8.65% to 9.15 % which the SBP rejected.
Settlement date for the successful bids is Dec 09, 2020.
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