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Commercial Banks’ deposits surge by 18% YoY by end-March,...

April 12, 2021 (MLN): The total Deposits held by Commercial Banks have grown by 18% YoY to Rs.17.9 trillion in 1QCY21, which is the highest growth in the March quarter in the last 14 years.

According to the report by Topline Securities, the growth in Deposits has been fueled by higher Remittances (+29% YoY in USD and 31%YoY in PKR terms during 1Q2021), while lack of cash-based business activity due to COVID-19 may have also resulted in an increase in banking deposits.

Meanwhile, Investments have grown by 35% YoY to Rs.12.6 trillion in 1QCY21. The excess liquidity is being placed in investments (primarily T-Bills) due to subdued growth in Advances.

Consequently, banks' investment to deposit ratio (IDR) which had already depicted an improvement to 67% in Dec-2020, has now increased to 70% by Mar-2021.

On the other hand, demand for Advances remained muted as it grew by just 4% YoY to Rs.8.6 trillion in 1QCY21 as banks remained wary of overall economic conditions due to COVID-19. However, sequential growth of 3.5% QoQ, is an indication of better economic activity during the last few months, the report said.

The advances to deposits ratio (ADR) has dropped to 48% as of Mar-2021 from 56% in Mar-2020.

Moreover, banks’ general provisioning has witnessed an increase of 20% YoY by end of March’21 as banks have opted to increase Provisioning in the wake of COVID-19. Fresh provisioning during the quarter stands at Rs.26 billion compared to Rs.11 billion in the same quarter last year.

Going by the report, M2 growth clocked in at 15% in 1Q2021 primarily driven by higher government borrowing from scheduled banks (up by 12% YoY). The Currency in Circulation (CIC) has increased by 16% YoY to Rs.6.6 trillion by end-March’21, with CIC as a percent of M2 clocking in at 30%, above the past 5-year average of 27%. The reasons for increasing CIC can be attributed to low-interest rates and evasion from tax authorities, the report said.

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PSX Closing Bell: Hesitation Marks

April 12, 2021 (MLN): The capital market started the first day of the week on a volatile note after last week’s alternating frenzy of bulls and bears. The market initially cheered the strong inflows from overseas Pakistani in the form of remittances that clocked in at $2.72 billion. However, later, investors in the market found themselves under the influence of bearish sentiments amid rising virus severity.

Accordingly, the benchmark KSE-100 index ended the trading session on Monday with a 208.43 point or 0.46 percent decline to close at 44,978.05.

As per the closing note by Topline securities, the market saw selling pressure during the trading session which was primarily caused by concerns over COVID-19 lockdowns in cities where the infection ratio is above 15%.

The Index traded in a range of 511.37 points or 1.13 percent of the previous close, showing an intraday high of 45,268.68 and a low of 44,757.31.

Of the 94 traded companies in the KSE100 Index, 25 closed up 67 closed down, while 2 remained unchanged. The total volume traded for the index was 173.42 million shares.

Sector-wise, the index was let down by Oil & Gas Marketing Companies with 36 points, Commercial Banks with 32 points, Pharmaceuticals with 26 points, Chemical with 23 points and Cement with 23 points.

The most points taken off the index was by ENGRO which stripped the index of 44 points followed by PSO with 25 points, OGDC with 22 points, SEARL with 21 points and UBL with 16 points.

Sectors propping up the index were Technology & Communication with 89 points, Real Estate Investment Trust with 3 points, Paper & Board with 2 points and Leasing Companies with 1 points.

The most points added to the index was by TRG which contributed 98 points followed by FFC with 24 points, MCB with 19 points, EFERT with 12 points and LUCK with 6 points.

All Share Volume decreased by 184.51 Million to 503.53 Million Shares. Market Cap decreased by Rs.57.58 Billion.

Total companies traded were 387 compared to 404 from the previous session. Of the scrips traded 130 closed up, 234 closed down while 23 remained unchanged.

Total trades decreased by 21,384 to 160,077.

Value Traded decreased by 5.37 Billion to Rs.19.97 Billion

CompanyVolume

Top Ten by Volume

Worldcall Telecom73,751,500
TRG Pakistan42,170,016
Ghani Global Holdings38,841,500
Telecard38,528,000
Byco Petroleum Pakistan18,902,000
Hum Network18,480,500
First National Equities17,863,000
Unity Foods17,399,903
Azgard Nine14,351,500
TPL Corp13,844,000

 

SectorVolume

Top Sector by Volume

Technology & Communication216,879,716
Chemical47,598,780
Food & Personal Care Products34,944,053
Refinery33,490,500
Inv. Banks / Inv. Cos. / Securities Cos.27,085,143
Cement19,173,675
Commercial Banks18,447,938
Glass & Ceramics18,360,000
Engineering17,108,187
Textile Composite16,813,640

 

 

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SECP amends Murabaha Share Financing Regulations

April 12, 2021: In an endeavour to promote Islamic finance products in the capital market, the Securities and Exchange Commission of Pakistan (SECP) has introduced amendments in Murabaha Share Financing Regulations.

Murabaha Share Finance (MSF) is a Shariah-compliant leveraged product, a viable alternate avenue for capital market investors who prefer the Islamic mode of financing. The product was initially launched in September 2019 with the guidance of renowned practicing Shariah scholars. However, through recent amendments, a system-based initiation and affirmation process has been introduced for Murabaha Sale Transaction. This will facilitate Islamic Financial Institutions (IFIs) and market participants to execute sale transactions with more ease and comfort.

Further, options for collateral management have been added to facilitate MSF Seller and market participants in executing Murabaha Share Financing and release of shares against payment of cash or other collateral.

SECP has conducted a number of awareness sessions with Banks, Brokers, and investors to adopt Shariah-compliant leverage facilities in the capital market. It is hoped that the facilitation will result in increased activity in MSF Product and liquidity in the capital market.

Press Release

KOHC witnesses turnaround in nine-month profits to Rs 2.53...

April 12, 2021 (MLN): Kohat Cement Company Limited (KOHC) has witnessed a turnaround in net profits to Rs 2.53 billion (EPS: Rs 12.60) for the nine months ended on March 31st, 2021 compared to the net losses of Rs 283 million (LPS: Rs 1.41) incurred in the same period last year.

The turnaround in earnings can be attributed to higher retention during the said period.

As per the financial statement sent to PSX,  the company registered a more than two-fold increase in revenues to Rs 17 billion while its cost of sales jumped by 56% YoY due to a massive jump in international coal prices recently (up by  60% since October 2020). As a result, the gross profits of the company clocked in at Rs 4.34 billion in 9MFY21.

On the cost front, the selling & distribution and administrative expenses tweaked up by 27% and 30%, YoY respectively. The other income of the company during the said period declined by 39.45% YoY.

Meanwhile, the finance cost depicted an increase of 2.01 times YoY to Rs 393 million from Rs 195 million.

Further, the company paid taxes worth Rs 997 million, while, it got a tax credit of Rs 31 million for the same period last year.

 Profit and Loss Account for the nine months ended March 31, 2021 (Rupees)

 

Mar-21

Mar-20

% Change

Sales - net

 17,819,980,071

 8,573,093,454

107.86%

Cost of goods sold

 (13,483,605,069)

 (8,634,838,889)

56.15%

Gross profit/ (loss)

 4,336,375,002

 (61,745,435)

-

Selling and distribution expenses

 (57,566,251)

 (45,384,733)

26.84%

Administrative and general expenses

 (232,928,189)

 (179,084,050)

30.07%

Other operating income

 109,536,658

 180,904,273

-39.45%

Other  expenses

 (232,548,080)

 (14,207,524)

1536.80%

 

 (413,505,862)

 (57,772,034)

615.75%

Operating profit/ (loss)

 3,922,869,140

 (119,517,469)

-

Finance cost

 (393,350,150)

 (195,215,075)

101.50%

Profit/ (loss)before taxation

 3,529,518,990

 (314,732,544)

-

Taxation

 (997,806,454)

 31,416,896

-

Profit after taxation

 2,531,712,536

 (283,315,648)

-

Earnings/(loss) per share - basic and diluted (Rupees)

 12.60

 (1.41)

-

 

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Gold rates drop by Rs.600 to settle at Rs.103,500...

April 12, 2021 (MLN): The demand for safe-haven fell today in the domestic bullion market as the price of 24-karat per tola gold dropped by Rs 600 to close at Rs.103,500 per tola. In the previous session, the yellow metal had closed at Rs 104,100 per tola.

According to the Karachi Sarafa Association, the price of 10-gram of 24-karat gold also dipped by Rs 514 to settle at Rs 88,735.

On the other hand, the silver prices remained stable as single tola and 10-gram of 24-karat silver were available at Rs.1,360 and Rs.1,165.98 respectively.

In the global market, gold prices declined by $3 to $1,741 per ounce against the previous closing of $1,744, while silver was valued at $25.20 per ounce.

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