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September 28, 2021 (MLN): Multinational companies operating in Pakistan repatriated $396.4 million in profit and dividends on investments in the country during the first two months of the ongoing fiscal year which was 3% lower than the profits of $407.6mn repatriated in the corresponding period last year, the central bank data showed on Tuesday.

This was due to improved profitability and macroeconomic indicators which strengthened foreign investors’ confidence in Pakistan’s economy. The survey conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI), which is the representative body of foreign investors and multinationals operating in Pakistan, also revealed that the overall Business Confidence Score (BCS) in Pakistan now stands at a positive score of 9 percent, a record improvement by 59 percent from the previous negative 50 percent score in Wave 19 Survey conducted in May 2020.

The data further revealed that during the period, foreign companies repatriated $372.8mn worth of profit against the foreign direct investments (FDI) in various businesses compared to $391.7mn in SPLY. While the outflow as payment against portfolio investment stood at $23.6mn, compared with $15.9mn in the same period a year earlier, marking a significant growth of 49% YoY could be ascribed to the reclassification of Pakistan in the MSCI.

To note, Foreign direct investment (FDI) fetched by the country during July-Aug FY22 amounted to $203.1mn, down by 20.3% YoY from $254.8mn in the corresponding period last year.

However, in the month of Aug’21 alone, repatriation of profits and dividends on investment by the foreign firms increased by 4.5x YoY to $237.2mn, data showed.

Sector-wise:

The data shows that the major sectors that repatriated relatively higher profits include the Communication sector, Food, Financial Businesses, Transport, Chemicals, and Food Packaging, among which the Communication sector repatriated the highest profits of $83.7mn during the month to overseas, against $65.7mn in the same period last fiscal year, showing a slight growth of 27% YoY.

The data further revealed that Profit outflows from the Food sector clocked in at $83.5mn while during July-Aug FY21, the sector fetched a net $99.9mn as profit. Profits outflow from the Financial Businesses declined by 15%YoY to $76.6mn against an outflow of $90mn in 2MFY21.

The Transport sector repatriated $34.5mn during the period under review, which was 1.23x lower when compared with $27.9mn in the same period previous fiscal year.

The Chemical sector repatriated 62% higher profits during the period under review which amounted to $30.2mn, while in the same period of FY21, the sector repatriated $18.7mn.

The Food Packaging sector repatriated $26.8mn, whereas, in the corresponding period last year, the sector did not fetch any profits.

Country-wise:

A country-wise break up of data on repatriation of profit released by SBP revealed that firms and individual investors belonging to the UK dispatched the single largest profit of $94.8mn during the period compared to $197.8mn in the same period prior fiscal year.

The United States witnessed the repatriation of the second-highest profits as the country repatriated $86.9mn abroad during the period under review, compared with $57.8mn in the previous year.

Third in line is Netherlands which repatriated $47.3mn from Pakistan during 2MFY22, up by 7.4x YoY as last year during July-Aug FY21, the country remitted only $6.4mn as profit income from Pakistan.

Next followed by Switzerland with profit repatriation of $41.4mn which was 2.3x YoY higher when compared with last year's figures.

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September 28, 2021 (MLN): Following the previous day’s recovery, the capital market traded the session in a narrow range on Tuesday, with the KSE-100 index gaining 457.17 points to settle at 45,274.93-mark.

The Index traded in a range of 547.26 points or 1.22 percent of previous close, showing an intraday high of 45,294.37 and a low of 44,747.11.

The rally gained steam by the end of the session due to the expectation of a successful sixth and seventh review of the US$6bn IMF loan program, a market note by Topline Securities highlighted.

While media reports suggested that Shaukat Tarin, Finance Minister also assured of Pakistan’s commitment to the IMF program.

On an announcement front, OGDCL posted the result early on and declared below expectation dividend that dragged the price down. The stock price went up (although remained below LDCP) after the announcement of the discovery, said Arif Habib in a closing note.

Of the 95 traded companies in the KSE100 Index 66 closed up 25 closed down, while 4 remained unchanged. Total volume traded for the index was 175.44 million shares.

Sectors propping up the index were Technology & Communication with 157 points, Refinery with 40 points, Food & Personal Care Products with 36 points, Oil & Gas Marketing Companies with 35 points and Fertilizer with 32 points.

The most points added to the index was by TRG which contributed 126 points followed by MEBL with 36 points, POL with 33 points, SYS with 26 points and UNITY with 24 points.

Sector wise, the index was let down by Chemical with 12 points, Miscellaneous with 6 points, Automobile Parts & Accessories with 4 points, Textile Spinning with 2 points and Paper & Board with 2 points.

The most points taken off the index was by COLG which stripped the index of 24 points followed by MCB with 22 points, OGDC with 19 points, HMB with 11 points and PPL with 8 points.

All Share Volume increased by 63.47 Million to 364.86 Million Shares. Market Cap increased by Rs.55.38 Billion.

Total companies traded were 556 compared to 547 from the previous session. Of the scrips traded 408 closed up, 127 closed down while 21 remained unchanged.

Total trades increased by 30,078 to 131,533.

Value Traded increased by 2.85 Billion to Rs.14.03 Billion

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September 28, 2021 (MLN): The shareholders of Maple Leaf Cement Factory (MLCF) has approved investment in the form of loans/advances from time to time to Kohinoor Textile Mills Limited, the holding company of MLCF, up to an aggregate sum of Rs500 million for a period of one year commencing from November 01, 2021, to October 31, 2022 (both days inclusive).

According to the company’s notice to PSX, the loans will be given at the markup rate of one percent above three months KIBOR or one percent above the average borrowing cost of the Company, whichever is higher.

Vide special resolution passed was passed by the shareholders in a general meeting held on October 27, 2020, the Company was authorized to extend a facility of similar nature to the extent of Rs200 million which is valid till October 31, 2021.

In this regard, the Chief Executive Officer and Secretary have been authorized to take all steps necessary, ancillary and incidental, corporate and legal formalities for the completion of transactions in relation to the loans/advances to the holding company but not limited to the filing of all the requisite statutory forms and all other documents with the Securities and Exchange Commission of Pakistan, executing documents all such notices, reports, letters and any other document or instrument to give effect to the above resolutions.

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September 28, 2021 (MLN): The non-government sector has borrowed a net sum of Rs.88.71 billion during the week ended September 17, 2021, which brings the cumulative net borrowing for ongoing fiscal year FY2022 to Rs.16.94 billion. The net retirement as of prior week was recorded at Rs.71.77 billion.

According to weekly data released by the State Bank of Pakistan, the sector has borrowed Rs.157.31 billion over the year since the amount retired as of corresponding period of last year was recorded at Rs.140.37 billion.

The non government sector is divided into three broad categories namely, the Private Sector, the Public Sector Enterprises and NBFI. Commercial banks are the main source of financing for the private sector, incuding conventional banks, islamic banks and islamic branches of conventional banks.

This fiscal year, the private sector borrowed a net sum of Rs.26.97 billion, whereas the PSE's have retired Rs.11.18 billion and NBFI has borrowed Rs.1.15 billion.

As we disintegrate the inflows and outflows within the private sector, we see that Conventional Banks were retired a cumulative sum of Rs.16.18 billion, Islamic Banks lent Rs.21.7 billion and lastly the Islamic branches of Conventional Banks lent Rs.21.45 billion.

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September 28, 2021 (MLN): The government of Pakistan has retired an additional sum of Rs.63.33 billion during the week ended September 17, 2021, which brings its total net retirement for ongoing fiscal year FY2022 to Rs.73.52 billion. As of prior week, the government had retired a net sum of Rs.10.19 billion.

According to the State Bank of Pakistan's weekly estimates in this regard, this year's overall net retirement as of this week has decreased by Rs.69.67 billion over the year as last year's net retirement for the same period stood at Rs.143.19 billion.

The government sector borrowings are divided into three broad categories based on the purpose of loan which are budgetary support, commodity operations and others.

Split three ways between these broad categories, the cumulative net retirement off budgetary support was Rs.75.12 billion, while that for other purposes stood at Rs.2.27 billion. On the contrary, a net total of Rs.3.86 billion were borrowed for Commodity Operations.

The two biggest source of financing for budgetary support are the State Bank of Pakistan and the Scheduled Banks. This fiscal year, the central bank has been retired a net sum of Rs.322.87 billion by the government, out of which the Federal Government retired Rs.45.35 billion, the Provincial Government retired Rs.261.76 billion, AJK Government retired Rs.8.1 billion, and the GB Government retired Rs.7.67 billion.

On the other hand, the Scheduled Banks have lent out a net total of Rs.247.75 billion out of which the Federal Government borrowed Rs.234.55 billion while the Provincial Government borrowed Rs.13.21 billion.

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