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SECP issues draft Reinsurance Brokers Regulations for public comments

July 2, 2020: The Securities and Exchange Commission of Pakistan (SECP) has issued the draft of SEC (Reinsurance Brokers), Regulations 2020 for soliciting public comments.

Reinsurance broking refers to arrangement of reinsurance between the insurance company and the reinsurer. The draft regulations stipulate various regulatory requirements such as minimum paid up capital, statutory deposit, professional indemnity insurance, the requirement to obtain license from the SECP, filing and reporting, disclosure requirements and certain other provisions relating to conduct of reinsurance brokers.

One of the key feature of draft Regulations is to prohibit dual role of the licensed insurance brokers by acting as direct insurance broker and reinsurance broker on the same risk either on their own or through their associates or affiliates. The requirement has been proposed to ensure optimization of local risk retention in the non-life insurance industry and to avoid conflict of interest of insurance local brokers along with their foreign affiliates in a single non-life insurance policy.

Interested parties, stakeholder and pubic can submit their comments within thirty days from the date of notification. The draft Regulations will be finalized in the light of stakeholder consultation and will be notified after due regulatory approvals.

Closing Bell: Short Sleep

July 2, 2020 (MNL): The KSE-100 index ended the trading session on Thursday with a 88.77 point or 0.25 percent gain and closed in consolidation at 34,978-mark.

The Index remained positive throughout the session touching an intraday high of 35,177.51

Of the 93 traded companies in the KSE100 Index 53 closed up 38 closed down, while 2 remained unchanged. Total volume traded for the index was 232.24 million shares.

Sectors propping up the index were Commercial Banks with 58 points, Technology & Communication with 24 points, Food & Personal Care Products with 16 points, Pharmaceuticals with 14 points and Miscellaneous with 13 points.

The most points added to the index was by NESTLE which contributed 20 points followed by MCB with 18 points, UBL with 18 points, BAHL with 18 points and EFERT with 14 points.

Sector wise, the index was let down by Power Generation & Distribution with 37 points, Inv. Banks / Inv. Cos. / Securities Cos. with 13 points, Oil & Gas Marketing Companies with 5 points, Automobile Assembler with 4 points and Cement with 3 points.

The most points taken off the index was by HUBC which stripped the index of 31 points followed by FFC with 13 points, DAWH with 12 points, MEBL with 8 points and MARI with 8 points.

All Share Volume increased by 68.04 Million to 383.08 Million Shares. Market Cap increased by Rs.23.21 Billion.

Total companies traded were 381 compared to 378 from the previous session. Of the scrips traded 224 closed up, 131 closed down while 26 remained unchanged.

Total trades increased by 12,986 to 122,474.

Value Traded increased by 1.83 Billion to Rs.12.51 Billion


Top Ten by Volume

Worldcall Telecom52,827,000
TRG Pakistan28,672,500
Maple Leaf Cement Factory21,185,000
Pak Elektron18,920,500
Hascol Petroleum18,358,500
Jahangir Siddiqui & Co. Ltd.11,235,500
Lotte Chemical Pakistan10,676,500
Azgard Nine10,246,500
Hum Network10,231,000



Top Sector by Volume

Technology & Communication105,548,600
Commercial Banks27,321,040
Oil & Gas Marketing Companies22,521,124
Cable & Electrical Goods19,587,100
Power Generation & Distribution18,494,095
Inv. Banks / Inv. Cos. / Securities Cos.15,133,600
Textile Composite13,816,300



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PKR’s Real Effective Exchange Rate Index increases by 2.93...

Jul 02, 2020 (MLN): Pak Rupee's Real Effective Exchange Rate Index (REER) increased by 2.93 percent in May 2020 to a provisional value of 97.21 from the revised value of 94.44 in April 2020.

According to data published by the State Bank of Pakistan (SBP), the REER index has increased by 0.22 percent compared to May 2019.

Similarly the Nominal Effective Exchange rate Index (NEER) increased by 2.22 percent in May to a provisional value of 62.52 from the revised value of 61.16 in April. On a yearly basis, the NEER Index has decreased by 6.55 percent.

PKR closed May at 163.1022 against the USD showing a depreciation of 1.79 percent compared to its value in April 2020. However, Compared to May 2019 PKR has depreciated by by 9.30 percent.

REER is a measure of the value of a currency against a weighted average of several foreign currencies, an increase in REER implies that exports become more expensive and imports become cheaper therefore, this increase indicates a decline in trade competitiveness.


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CCP achieves major milestones, approves 59 mergers, 43 exemptions...

July 2, 2020: The Competition Commission of Pakistan (CCP), in the fiscal year 2019-20, has processed and granted approval to 59 Merger & Acquisition applications against the annual target of 50, showing the CCP’s promising performance to facilitate the local and foreign investors despite the limitations caused by COVID-19 pandemic.

Out of the total 59 approvals, 51 were Acquisitions, 5 Mergers and 3 Joint Ventures applications. The major sectors where these mergers and acquisitions took place include automotive, household products, food, sugar, oil, power, freight, LNG, insurance, agriculture, coal mining, logistics, pharmaceutical, chemicals, petroleum, healthcare, leasing, plastic, textile, hospitality, financial services, digital payments, mobile phone, investment, IT – Hardware, wind power, and microfinance banking.

Moreover, the CCP also processed and granted Exemptions to 43 undertakings under the Section 5 of Competition Act, 2010. CCP grants exemptions to notified agreements between companies from the prohibition of Section 4 of the Competition Act, on the basis of an individual assessment. Restrictive agreements qualify for exemption if their benefits to general welfare (product improvement, technical or economic progress, benefits to consumer) outweigh their restrictive effects on competition.

During the outgoing fiscal year, the CCP complete 14 enquiries, issued 78 Show cause notices, and passed 15 orders. An important enquiry was concluded In the matter of alleged bid rigging in the tenders issued by Power Distribution companies for the procurement of Line Hardware material. Similarly, the CCP issued hearing notices to 39 sugar mills in the matter of show cause notices issued to the Pakistan Sugar Mills Association and its member sugar mills in 2009 for cartelization. These sugar mills had not challenged the CCP’s show cause notices, but legal action had not been started against them in the past.

Even in the challenging time of COVID-19 pandemic, the CCP ensured its smooth functioning by extending facilitation to the stakeholders. An Online Merger and Acquisition Application filing system was launched to facilitate the local and foreign investors in filing merger applications online. Furthermore, to ensure health and safety of the respondents amid COVID-19, the parties have been allowed to respond to the show-cause notices issued to them in the hearings using video conferencing and other online tools. An online application for granting exemptions has also been prepared and will be launched soon.

The CCP issued a Policy Note to the Securities & Exchange Commission of Pakistan (SECP) asking for an immediate reinstatement of the cost audit of companies (particularly, Cement, Sugar, Vegetable Ghee/Cooking Oil, Fertilizer, and Wheat flour companies), so that credible and verified cost information is available to assist in factual (rather than speculative) policy making.

In order to curb the bid rigging in tenders and public procurements, the CCP has prepared an in-house IT-based Bid Rigging Analysis and Detection (BRAD) system to help detect signs of collusion in the bidding process.

On the legal front, the Islamabad and Lahore High Courts have resumed hearings in the cases wherein the CCP’s constitutionality has been challenged by the undertakings. The government, through the Attorney General of Pakistan, has been extending full support to the CCP in resolving the pending issues.

Certain other recent initiatives include initiation of online webinars to help educate the businesses and consumers around Competition Law; launch of draft study on the Competition Concerns in the LPG Sector; and working on the State of Competition report after a pause of 10 years.

PSX to set up fund to support the attack...

July 2, 2020: The Board of directors of Pakistan Stock Exchange has announced that PSX will set up a fund to financially assist families of the martyred security personnel and those who were injured defending the National Stock Exchange on Monday 29th June.

The board condemned this dastardly and cowardly attack in the strongest possible terms. This was an attack which targeted not only innocent people but also the economic stability and the investment environment of Pakistan.

The board also commended the PSX management for the calm and effective manner in which the security protocols were implemented. They noted, that despite such an extreme event, the market did not stop working for even a minute and all disaster recovery and business continuity measures worked seamlessly.

‘PSX, as the premier capital market of the country, is fully cognizant of its responsibilities and recognizes the suffering caused to the families of those who have been martyred and injured. We stand with them at this time and will also help them in a practical and sustainable manner. To this end, PSX will set up a fund and endowed it with an upfront donation of Rs 10 Million’, an official statement said.

The management is in discussion with brokers, and other capital market organisations and institutions who have reached out and expressed a desire to support this effort. In addition, PSX staff and directors in their individual capacity have also committed their support. Hence, it expects the size of the fund to increase substantially.

In addition, PSX will contribute to medical expenses and continue paying salary of our two injured guards till they are fit to resume their duties.

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