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Closing Bell: False hopes

September 23, 2020 (MNL): The KSE-100 index ended the trading session on Wednesday with a 47.35 point or 0.11 percent gain to close at 41,876.26.

The market kept oscillating between the green and the red zone, with most of the participation taking place in the banking sector. E&P sector, on the other hand, remained subdued owing to lower crude oil prices.

According to Arif Habib Limited, among OMCs, PSO and HASCOL performed well today, besides Cement sector that showed positive activity in anticipation of healthy dispatches in the ongoing month.

The Index traded in a range of 269.61 points or 0.64 percent of previous close, showing an intraday high of 42,023.01 and a low of 41,753.40.

Of the 94 traded companies in the KSE100 Index 53 closed up 40 closed down, while 1 remained unchanged. Total volume traded for the index was 251.51 million shares.

Sectors propping up the index were Textile Composite with 30 points, Inv. Banks / Inv. Cos. / Securities Cos. with 19 points, Oil & Gas Marketing Companies with 17 points, Chemical with 12 points and Fertilizer with 11 points.

The most points added to the index was by DAWH which contributed 23 points followed by COLG with 16 points, ILP with 13 points, JLICL with 7 points and BOP with 7 points.

Sector wise, the index was let down by Oil & Gas Exploration Companies with 43 points, Engineering with 7 points, Pharmaceuticals with 6 points, Refinery with 4 points and Cement with 3 points.

The most points taken off the index was by OGDC which stripped the index of 17 points followed by PPL with 12 points, LUCK with 11 points, POL with 8 points and UBL with 8 points.

All Share Volume increased by 141.51 Million to 582.79 Million Shares. Market Cap increased by Rs.10.27 Billion.

Total companies traded were 420 compared to 428 from the previous session. Of the scrips traded 183 closed up, 218 closed down while 19 remained unchanged.

Total trades decreased by 9,699 to 118,057.

Value Traded decreased by 0.07 Billion to Rs.12.88 Billion


Top Ten by Volume

Unity Foods51,805,500
Jahangir Siddiqui & Co. Ltd.36,252,000
Pakistan Telecommunication Company Ltd27,156,000
Hascol Petroleum26,982,500
The Bank of Punjab17,132,500
Aisha Steel Mills15,180,500
Fauji Fertilizer Bin Qasim13,635,000
Maple Leaf Cement Factory12,738,500



Top Sector by Volume

Commercial Banks194,312,619
Vanaspati & Allied Industries51,814,000
Technology & Communication47,191,200
Inv. Banks / Inv. Cos. / Securities Cos.43,513,900
Oil & Gas Marketing Companies34,233,202
Power Generation & Distribution27,947,357
Food & Personal Care Products24,302,230



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ECC approves Rs 3.850 b for PSM employees’s salaries

Sep 23, 2020: The Economic Coordination Committee (ECC) of the Cabinet Wednesday approved an amount of Rs 3850 million for provision of salaries to the employees of Pakistan State Mills (PSM) for the financial year 2020-21, which would be disbursed every month.

However, though the ECC agreed in principle that the dues to the retired non-litigant employees should be paid, the forum decided to seek a detailed report from the Ministry of Industries and Production on the nature of liabilities due to PSM on account of retirement dues, the liabilities.

It will accrue as a result of the retrenchment plan and other expenditures on account of utilities or any other charges due on PSM.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the ECC meeting, according to press statement issued here by the Finance Ministry.

It said that the Ministry of Industries and Production had presented the two separate summaries to ECC for the disbursement of salaries to the PSM employees and for clearing the liabilities of its PSM employees who have not approached the Court (Sindh High Court).

ECC was briefed that earlier this month, the retired employees of the PSM were already paid Rs12.741 billion as retirement dues but the court had asked to pay the non-litigant retired employees as well that will further add Rs.11.68 billion to the expenditure of the Federal government.

The ECC also considered and approved 2 technical supplementary grants (TSGs) for the Ministry of Interior amounting to Rs111 million for clearing various liabilities of the ICT administration.

Two other TSGs were approved for Islamabad High Court amounting Rs.102 million and National Heritage & Culture Division of Rs 8.5 million for various expenditures.

ECC also granted waiver of guarantee fee on foreign loans of K2/K3 projects, the statement said adding that according to a report prepared by Pakistan Atomic Energy Commission (PAEC) and Economic Affairs Division (ADB), there would be a benefit of Rs.0.07/KWh to the general public by the waiver of this fee.

For the centralized procurement of the vaccines under the Expanded Program on Immunization (EPI), ECC approved shifting of Federal EPI from development to revenue expenditure with an allocation of Rs 9, 903.195 million through TSG for vaccine procurement in CFY to avoid interruption in the immunization program.

Now the vaccine would be procured by the Federal EPI on behalf of the provincial governments and later reimbursement would be made by Punjab and Sindh governments and deduction at source from the shares of Khyber Pakhtunkhwa and Balochistan for their respective vaccine shares would be made.

In order to increase the share of man-made fibers (MMF) in the textile goods for better unit prices in the international markets, product diversification and most importantly, value addition, the Additional Customs Duty (ACDs) and Regulatory Duty (RDs) on selected HS codes of textile sector was allowed to be removed. The total revenue impact of these exemptions would be Rs 533 million.

ECC also allowed notifying the Kharlachi Border Crossing between Pakistan and Afghanistan as a rebatable border point for export of goods to Afghanistan. Earlier the opening of this border point helped in the release of congested transit trucks at the Afghan border due to COVID-19 restrictions.

ECC allowed the exemption from re-lending of the funds for Pakistan National Emergency Preparedness and Response Plan for COVID-19 to cover the country's requirements for 12 months through emergency operations.

In order to administer the program, Asian Development Bank would provide a loan of US$ 100 million and an additional US$ 5 million would provided by the government of Norway as a grant administered by ADB.

The Asian Development Bank has already signed a loan agreement with the Ministry of Economic Affairs to finance the said project.


Corporate Briefing: HINO plans to issue Right Shares of...

September 23, 2020 (MLN): Hinopak Motors Limited (HINO) held its Corporate Briefing recently to discuss the recent financial performance along with the future outlook of the company.

During 1HMY21, the company had incurred losses amounting to nearly Rs 442 million, up by 32% YoY whereby it reported a gross loss of Rs 122 million on an account of lower volumetric sales and hike in production costs amid PKR devaluation and imposition of customs duty.

Moreover, due to the economic slowdown amid the COVID-19 pandemic, HINO is unable to pass on the increased cost to customers in full.  

According to a report by Taurus Securities, the management is bearish on the outlook for MY21, as in the last five months, HINO’s volumes were just 113 units, showing a decline of 78% YoY.  The company does not foresee an uptick in demand for the rest 7 months.

Speaking of an increase in demand in FY17 & FY18, the management informed it was the result of the positive sentiment for CPEC, due to which customers had bought trucks in excess of their demand previously.

The company’s 15-20% of sales as per the research report, are on lease. However, lower interest rates are still not enough to improve demand significantly.

Talking about its plans, the management believed that the company will witness recovery in trucks’ demand due to construction activities but with a sufficient lag. It also informed HINO is going for the Right Issue of PKR 2.9 billion which will be utilized for working capital requirements and for paying back its short-term borrowings. This will in return lower finance costs, the report mentioned.

As per a report by Taurus Securities, the management is actively working for settling its working capital needs, which can be witnessed from lower inventory levels and lower short-term borrowings as compared to the past.

Further, the management informed the imported market is very insignificant. HINO holds a 40% share of the overall market and 70% and 60% for Heavy Trucks and Buses, respectively. HINO also fulfills 70% of the demand for trucks by the PAK Army.

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Gold continues to fall amid rising concerns over second...

September 23, 2020 (MLN): Gold prices continued losing ground as the fears about the second wave of the virus kept improving the US dollar’s status as an international reserve currency. In the international market, gold fell to the US $1892 an ounce while silver pegged at $23.63 per ounce.

In line with the global market, the price of 24 Karat gold on Wednesday decreased by Rs 700 to Rs 114,000 in the domestic bullion market. The precious yellow metal of 24-Karat had closed at Rs 114,700 per tola on the last day.

According to the data released by the All Sindh Saraf Jewellers Association, the price of 10-gram gold also witnessed a decrease of Rs 600 to settle at Rs 97,737 against the previous close of Rs 98,337 per-gram.

On a similar note, silver witnessed a decrease in its price. The 24-Karat Silver edged lower by Rs 30 to Rs 1,220 per tola. Likewise, the price of 10-gram silver was recorded at Rs 1045.95, down by Rs 25.72 compared to a prior close of Rs 1071.67.

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Auction: Bid Pattern

September 23, 2020 (MLN): The State Bank of Pakistan released the Bid Pattern for today's MTB Auction.

Auction target is Rs.450.00 billion against a maturing amount of Rs.603.90 billion, showing a net retirement of Rs.153.90 Billion.

Link to Full Bid Pattern

In the previous auction cut off yield for 3, 6 and 12 months was 7.1399, 7.18 and 7.3 percent.

SBP also released the Bid pattern for today's PIB (Floating Rate) Auction.

Auction Target is Rs.110.00 Billion for 3, 5 and 10 year Bonds, which will be the re-opening of June 18, 2020 issue.

Coupon Rates for are 8.2670, 8.3070 and 8.5170 percent for 3, 5 and 10 years.

Link to Full Bid Pattern


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