August 11, 2019 (MLN): The Kashmir issue and its consequences that hit the bourse with a blow, remained the highlight of last week as the benchmark KSE 100 index lost over 2,200 points to uncertainty and panic selling.

The week prior to this was concluded at 31,666 points while at present, the index stands at 29,429 points, marking a colossal damage of 7% to the stock exchange.

The most prominent losses were made within Commercial Banks, E&P, Fertilizer and Power sector which collectively shrunk the index by over 1,900 points.

More specifically, the constituents that encountered the most losses were UBL (-216 pts), OGDC (-194 pts), HBL (-186 pts), PPL (-175 pts) and HUBC (-163 pts).

Moreover the Market Cap declined by 5% over the week as its tumbled by Rs.324.9 billion, marking the lowest cap in over 5 years or since December 2013.

As a response to this ongoing issue, the Government suspended bilateral trade with India with immediate effect and made further amendments in Import and export Policy Order, 2016.

On the other hand, the appreciative spell at interbank has been broken as the Pakistani Rupee observed depreciation in the last session.

The currency gained 67 paisa against the greenback, as the previous week was concluded at PKR 159.12 per USD.

Other major economic and policy-oriented developments that took place during the departed week include:

the Government suspended bilateral trade with India with immediate effect and made further amendments in Import and export Policy Order, 2016.

Moreover, the federal cabinet approved appointment of eminent financial sector professional Aamir Khan as Chairman of the Securities and Exchange Commission of Pakistan (SECP). 

On Thursday, ECC decided to constitute a Price Review Committee under the chair of Advisor Ministry of Commerce & Textile to review and suggest the indicative price and other measures to be taken in case of abnormal fluctuations in the prices of cotton.

Meanwhile, Ministry of Finance informed the National Assembly in a written reply that the government accrued income of Rs. 57,714 million rupees from the Asset Declaration Scheme that was launched to give people an opportunity to declare their undeclared assets by paying a certain amount of tax on it.

Moreover, the Cabinet Committee on Privatization (CCoP) in its meeting held with Advisor to the Prime Minister on Finance & Revenue, Abdul Hafeez Shaikh in the chair on Thursday, directed the Ministry of Privatization to expedite the process of privatization of public sector enterprises approved for privatization and further advised the Ministry of Privatization to hire financial advisors for at least 10 PSEs before the next CCoP meeting.

On Wednesday, the Asian Development Bank (ADB) has approved a $500 million loan for Pakistan to support and improve its trade competitiveness and to boost its exports.

On Tuesday, Central Development Working Party (CDWP) meeting held under the Deputy Chairman Planning Commission Dr. Muhammad Jahanzeb Khan approved 12 projects worth Rs.14.5 billion and recommended 03 projects worth Rs.18 billion to ECNEC for consideration.

Meanwhile, the National Electric Power Regulatory Authority (NEPRA) on Tuesday rejected the Central Power Purchase Agency Guarantee Limited (CPPA-G) request to raise power tariff six paisa for June and approved to slash power tariff 9 paisa.

The same day, adviser to Prime Minister on Finance and Revenue, Abdul Hafeez Shaikh said that the government was making all possible efforts to get the country out of the Financial Action Task Force's (FATF) Grey list.

On the upside, the Government of Japan announced grant aid worth around 560 million Japanese Yen (approximately USD 5 million) to United Nations Industrial Development Organization (UNIDO) to support Agri-Food and Agro-Industry Development in Pakistan province of Khyber Pakhtunkhwa and Balochistan, in the Ministry of National Food Security & Research.

Meanwhile, the country’s financial standing was brought into clearer view with the following data releases over the course of the week:

• The Weekly Sensitive Price Indicator (SPI) for the Combined Group increased by 1.23% during the week ended Aug 08, 2019 while the SPI increased by 17.76% compared to the corresponding period from last year.
• The central government's domestic and external debts in fiscal year 2019 collectively added up to a total sum to Rs.31.8 trillion.
• Overseas Pakistanis remitted USD 2.04 billion in the month of July 2019 compared to USD 1.65 billion in June 2019 showing an increase of USD 393.59 million over the previous month.
• The non-government sector has retired another net sum of Rs.20.18 billion during the week ended August 02, 2019, which brings the cumulative net retirement for ongoing fiscal year FY2020 to Rs.134.53 billion.
• The government of Pakistan has accumulated Rs.138.05 billion during the week ended August 02, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.27.23 billion.
• The overseas investors recorded the highest purchase of local securities in three years for the week ended August 2, 2019, as the net purchase via Special Convertible Rupee Account (SCRA) clocked in at Rs.3.91 billion, i.e. around Rs. 2.22 billion higher than last week's numbers.
• Pakistan's Forex Reserves decreased by USD 41.60 Million or 0.28% and the total liquid foreign reserves held by the country stood at USD 15,020.20 Million on Aug 02, 2019.
• The government accrued income of Rs. 57,714 million rupees from the Asset Declaration Scheme that was launched to give people an opportunity to declare their undeclared assets by paying a certain amount of tax on it.

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