The Weekly Roundup of Pakistan’s Economy

September 1, 2019 (MLN): The last week of August 2019 was eventful where several developments were noticed.

The latest of these developments brought glad tiding for the nation as the government of Pakistan decided to reduce petroleum products’ prices by Rs.4.59 to Rs.113.24 per liter. The price of high-speed diesel would be reduced by Rs 7.67 per liter, petrol by Rs 4.59, kerosene by Rs 4.27 and light diesel oil by Rs 5.63, on Friday.

In addition to this, S&P Global Ratings affirmed its 'B-' long-term and 'B' short-term sovereign credit ratings on Pakistan on Thursday, while a stable outlook was assigned for long-term rating.

On the upside, the Country Director, World Bank, Mr. Patchamuthu Illangovan on Thursday, apprised that World Bank will disburse around $1.5 billion this financial year for various projects as part of its active program.

Moreover, Federal Minister for Planning Development & Reform Makhdum Khusro Bakhtyar welcomed the ADB’s indicative assistance of $7.5 billion over the next three years for Pakistan. The Minister said that ADB portfolio may be expanded to include other priority areas.

The same day, Special Assistant to the Prime Minister on Energy Nadeem Babar said that the government has decided to abolish various unnecessary regulations to facilitate investment in petroleum sector in the country.

Meanwhile, the government of Pakistan issued an ordinance to further amend the GIDC Act, 2015 as per which, the CNG stations have been allowed to deposit the outstanding amount of Gas and Infrastructure Development Cess (GIDC) after entering into an agreement with Sui-Northern Gas Pipelines Limited and Sui-Southern Gas Company Limited as the case may be.

Furthermore, the Privatization Commission board on Thursday decided to appoint financial advisor for six state-run companies to privatize which include OGDC, PPL, Heavy Electrical Complex, Guddu Power Plant and Nandipur 425-525 MW and House Building Finance Corporation (HBFC).

On Wednesday, the meeting of the Monetary and Fiscal Policies Coordination Board was held under the chairmanship of the Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Sheikh in which the board observed that there is a need to narrow the fundamental revenue-expenditure gap and the export-import gap by ensuring prudent expenditure management and efficient resource mobilization strategy.

Meanwhile on a positive side, World fame Dutch oil company, Royal Vopak will invest 2.8 billion US dollars in Pakistan due to improved investment regime and conducive business environment being provided by the government.

On Tuesday, the joint venture of Kohat E.L comprising Oil and Gas Development Company Limited as operator (50%), Mari Petroleum Company Limited (33.33%) and Saif Energy Limited (16.67%) discovered gas and condensate from its exploratory efforts at Well Tough-01, which is located in district Kohat, Khyber Pakhtunkhwa Province.

On the other hand, the equity market was dragged through the dust during the week as the benchmark KSE 100 index shed 1,677 points during the week, closing the market 5.4% lower than the prior week, at 29,672 points.

Commercial Banks, Exploration and Production, Cement and Power sector were the major sectors responsible for the index’s decline as they collectively stripped the index of over 1,300 points. In particular, the scrips of OGDC and PPL observed losses in share prices due to speculations on their privatization. Other scrips that belonged in the same running this week were HBL, BAHL, and PSO.

Domestically, the selloff was led by mutual funds as they sold securities worth Rs.2.2 billion. On the contrary, local individuals bought securities worth Rs.1.2 billion while Banks/DFIs bought Rs.1 billion worth of securities thus providing relief from the funds’ selloff. However, insurance companies and brokers also took part in selloffs this week.

Similarly, foreign corporate sold securities worth Rs.163 million but overseas Pakistanis nullified the impact by purchasing securities worth Rs.316.9 million, thereby bringing the net purchase by foreign investors to Rs.151.2 million.

During this time, the all share market cap reduced by Rs.258 billion marking a decline of 4% over the week.

Meanwhile in the interbank, PKR gained 66 paisa against the greenback, as the week was concluded at PKR 156.86 per dollar against the previous week’s closing at PKR 157.52 per USD.

Apart from this, the following data was released during the week:

  • The non-government sector retired another net sum of Rs. 35.38 billion during the week ended August 23, 2019, which brings the cumulative net retirement for ongoing fiscal year FY2020 to Rs.127.51 billion. The net retirement as of prior week was recorded at Rs. 92.13 billion.
  • The government of Pakistan retired an additional sum of Rs. 52.56 billion during the week ended August 23, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.114.07 billion. As of prior week, the government had retired a net sum of Rs.61.5 billion.
  • The net purchase of securities via SCRA clocked in at Rs.2.9 billion, i.e. around Rs.2.87 billion higher than last week'
  • The federal government released an amount of Rs 971 million for the construction of various hydropower projects in Azad Jammu Kashmir (AJK) and Gilgit-Baltistan during 2018-19 under the Public Sector Development Programme.
  • The total money supply in the economy during June 2019 stood at Rs 2.44 trillion, marking a growth of 3% as in last month it was Rs 20.8 trillion.
  • Urea offtake during July 2019 was 465 thousand tonnes which recorded a decrease of 6.3 percent as compared to July 2018.
  • DAP offtake during the month of July 2019 stood at 202 thousand tonnes, which is 33.1 percent lesser than the offtake of July 2018.
  • Government of Pakistan’s revenue collection in the fiscal year 2019 adds up to Rs.4.9 trillion of which Rs.4.5 trillion were collected as tax by the federal and provincial governments.

Copyright Mettis Link News

Posted on: 2019-09-01T14:17:00+05:00

29723