This past week brought along a series of attention grabbing and significant events, amongst which the most highly anticipated ones were the announcement of this government’s second mini budget and receipt of financial assistance from UAE and Saudi Arabia.

This Wednesday, Finance Minister Asad Umar announced the key points of the much awaited Mini-Budget in the National Assembly among which he pointed out his governments focus on 3 key sectors, namely Small and Medium Organizations, Agriculture sector and Low-Income Housing Sector. The business-friendly mini-budget presented had been well received by the stockbrokers, as it offered them some major concessions.

The amended finance bill has reduced and abolished several taxes as the government accepted the long-standing demand of various sectors including small enterprises, low-cost housing while charges on banking transactions has been abolished for filers.

Moreover, State Bank of Pakistan received the final tranche of the USD 3 Billion promised by Saudi Arabia on Thursday. Additionally, USD 1 billion arrived from UAE, out of the 3 Billion promised, with the remaining amount to be transferred in two installments. With the receipt of total USD 2 Billion, Pakistan’s forex Reserves have jumped to more than USD 15 Billion.

On the downside, United Nations published its latest report on world economic situation and prospects for 2019 in which it stated that the economic growth in Pakistan is projected to slow down markedly in 2019 and 2020 to below 4.0%, after an estimated expansion of 5.4% in 2018.

Nevertheless, some relief came from Pak-Iraq agreement to finalize the signing of Memorandum of Understanding aimed at ensuring legal and risk-free migration of Pakistani manpower to Iraq.

Along with an update on Pakistan’s current economic position, this week’s statistical releases also gave us an insight to the performance of certain companies within the equity market. In addition to the usual weekly data releases by the State Bank of Pakistan (SBP) and Pakistan Bureau of Statistics (PBS), this week marked the beginning of the financial earning season for the period ended December 2018.

These releases disclosed that:
•    In the last six months (July to January 11), the Federal Government’s net borrowing for Budgetary Support has risen to Rs.772.6 billion, while around Rs.63 billion was retired during last week. As compared to the corresponding period of last year, the net borrowing has doubled (from Rs.372 billion). -SBP
•    Loans issued to private sector businesses added up to Rs.5.1 trillion in December 2018, marking a 22% increase from the amount lent by December 2017 (Rs.4.2 trillion) and a 4% increase from prior month’s loan of Rs.4.9 trillion. -SBP
•    The total liquid foreign reserves held by the country stood at USD 13,257.20 million on Jan 18, 2019. -SBP
•    Overseas investors retreated to the selling zone once again as during the week ended January 18, 2019, the net sale of securities via Special Convertible Rupee Accounts (SCRA) was recorded to be Rs.381 million. -SBP
•    Total fertilizer offtake during December 2018 was about 480 thousand tonnes which increased by 0.2 percent against December 2017. – NFDC (National Fertilizer Development Centre)
•    DAP offtake in December 2018 was 189 thousand tonnes showing an increase of 25.6 percent over December 2017. -NFDC
•    Attock Refinery Limited (ATRL) reported losses of Rs.2.9 billion in 1HFY19 on account of increase in cost of sales by Rs.36 billion, netting off the impact of increase in net sales. -PSX
•    Attock Cement Pakistan Limited (ACPL) reported its consolidated quarterly profit at Rs.393.7 million (EPS: PKR 2.87), whereas the cumulative profit for the six months period (July – December) stands at Rs.816.8 million (EPS: PKR 5.94), down by around 29%, year-on-year. -PSX
•    Honda Atlas Cars Pakistan Limited (HCAR)’s profits during last quarter plunged by 57.5% year on year, as the company reported profit after tax (PAT) at Rs.601.6 million, and EPS at PKR 4.21. Meanwhile, the cumulative earnings for the April-December period in FY19 plummeted by 47.6% YoY, with net income for the period at Rs.2.7 billion and EPS at PKR 18.78. -PSX
•    Thal Industries Corporation Limited (TICL) incurred losses of Rs.250 million last quarter as it failed to match its topline earnings with an absurdly growing operating expenses. -PSX
•    Attock Petroleum Limited (APL) reported a net income of Rs.2.1 billion in 1HFY19, marking a descent of 25% YoY. The company’s EPS stands at PKR 21.13, while net margins dropped by 1.3% to 1.6%. -PSX
•    Pakistan Oilfields Limited (POL)’s quarterly consolidated profits have observed an upswing of 102% year-on-year. -PSX

Within equity market, the benchmark KSE-100 index accumulated around 958 points by the end of this week and closed at 40,265 points, as positive sentiments continued to emerge on the back of supplementary finance bill announced by the government. Interest from foreigners also boosted the market’s performance.

Commercial Banks and Oil and Gas Exploration sectors were the key drivers of the index during the week, as they contributed 575 points (59%) and 138 points (14%) respectively, primarily led by aggressive foreign buying.

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