August 25, 2019 (MLN):  Of all the events that took place in the departed week, the drastic improvement within the stock market took the limelight as benchmark KSE 100 index recovered a mammoth 3,119 points in the first four days before losing out 534 points on the last day of the week, to panic selling on account of rumors regarding FATF’s decision to place Pakistan in its blacklist.

In truth, an FATF official informed on Friday that the FATF Plenary meeting is expected to hold on October 16-18 at Paris, wherein it will examine Pakistan’s progress on its existing action plan and consider the next steps.

Nevertheless, the benchmark index gained a net of 2,585 points or 9% over the week and stands closed at 31,350 points. Commercial Banks, Oil & Gas Exploration Companies, Fertilizer, Cement and Power Generation & Distribution were among the best performing sectors this week, having jointly contributed over 2,000 points to the index.

In particular, ENGRO (+256 pts), OGDC (+205 pts), HBL (+188 pts) and HUBC (+160 pts) were the key drivers of the index.

 Moreover, the Market Cap in PKR grew by 7.16% as it currently stands at Rs.6.34 trillion.

On the other hand, PKR gained 1.4 rupees against the greenback this week, as the previous week was concluded at PKR 158.96 per USD. Friday’s recovery at interbank marked PKR’s 6th day on the rise. This was the first time in last 30 sessions that the currency dipped below 158.

The week's trend eased Pakistan's external debt burden by Rs.121.4 billion which in dollar terms accounts for a $105.84 billion. Pakistan now owes external avenues a total of Rs.16.67 trillion, down from Rs.16.8 trillion recorded until last week.

Apart from this, the major economic and policy-oriented development that took place during the departed week includes:

Securities and Exchange Commission of Pakistan (SECP)’s exemption of applicability of International Financial Reporting Standards (IFRS) 9 in respect of debts due from Government of Pakistan to power supply chain companies for a limited period of three years i.e. till June 30, 2021.

On Thursday, Prime Minister Imran Khan met a delegation of China Power Hub Generation Company (CPHGC) wherein he was apprised that first of the two power plants with a generation capacity of 660 megawatt each, being built in Hub city of Balochistan, has successfully been synchronized with the national grid.

Meanwhile, Adviser to the Prime Minister on Finance and Revenue, Abdul Hafeez Shaikh Thursday said that Pakistan was pursuing a growth-oriented programme for institutional reforms and economic revival.

Furthermore, the Securities and Exchange Commission of Pakistan accorded regulatory approval with respect to Murabaha Share Financing (MSF) and has directed National Clearing Company of Pakistan Limited (NCCPL) to implement MSF System effective from September 2, 2019.

 On Wednesday, Federal Cabinet approved Pak-Turkey Strategic Economic Framework to forge stronger cooperation between Pakistan and Turkey.

On Tuesday, the Federal Board of Revenue (FBR) set the target to mount Sales Tax Registration (STN) upto 400,000 people in next three years to eventually boost revenue collection and documentation of economy.

On Monday, the Economic Intelligence Unit (EIU) revised its inflation forecast for 2019, predicting that the consumer prices will increase by 9.1% on average while the producer price will increase by 12.1% on average.

Meanwhile, the following data releases sketched a financial snapshot of the economy:

• Pakistan’s paid USD 11.588 Billion in external debt servicing in FY19, compared to USD 7.495 Billion in FY18.
• Total external debt liabilities increased only by USD 505 million in the final quarter of FY19, showing the smallest increase in the last 10 quarters.
• The Weekly Sensitive Price Indicator (SPI) for the Combined Group decreased by 0.08% during the week ended Aug 22, 2019 while the SPI increased by 18.91% compared to the corresponding period from last year.
• Pakistan acquired around $321.25 million as foreign economic assistance in the first month of FY-2020, from multiple bilateral and multilateral sources.
• Pakistan's Forex Reserves increased by USD 27.20 Million or 0.17% and the total liquid foreign reserves held by the country stood at USD 15,604.70 Million on Aug 17, 2019.
• The government of Pakistan has retired a net sum of Rs.40.44 billion during the week ended August 09, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.24.66 billion. As of prior week, the government had borrowed a net sum of Rs.15.78 billion.
• Pakistan's outstanding debts as of July 31, 2019 stand at Rs.20.1 trillion whereas total debt at the end of prior month was Rs.20.23 trillion, meaning that around Rs.121.82 billion or 0.6% were retired during this month alone.
• The non-government sector borrowed a net sum of Rs.29.51 billion during the week ended August 09, 2019, which brings the cumulative net retirment for ongoing fiscal year FY2020 to Rs.105.04 billion. The net retirement as of prior week was recorded at Rs.134.55 billion.
• Foreign Investment during July 2019 jumped from $105.8 million to $107.2 million in a month, recorded the State Bank of Pakistan.
• Pakistan’s current account deficit (CAD) for the first month of FY20 stood at only USD 579 Million, a decrease of over 72 percent compared to the same period of FY19.
• The overall output of Large Scale Manufacturing Industries (LSMI) decreased by 3.64%, in Fiscal Year 2019. Meanwhile, the output in June 2019 decreased by 5.05% on a year-on-year basis, and by 8.5Y one a month-on-month basis.
• As many as 10.9 thousand passenger cars were sold during the month of July 2019 against the production of 16.4 thousand units, a report issued by Pakistan Automotive Manufacturer’s Association (PAMA) revealed on Monday.
• The total disbursements from various financial sources were recorded $10,186 million during the fiscal year 2018-19, including loans of $9,856 million and grants of $330 million, official sources said.

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