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Author: Mrs. Anjum Shahnawaz

  • Equity market gains 428 points on increased activity in construction

    Equity market gains 428 points on increased activity in construction

    KARACHI: The equity market gained 428 points on Monday owing to increased activity in construction sector, analysts said.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 36,619 points as against 36,190 points showing an increase of +428 points.

    Analysts at Arif Habib Limited said that the first day after resumption of trading hours to Pre-COVID brought higher volumes, touching 468 million shares which is slightly higher than what was observed on Thursday.

    This is the highest volume so far in CY20. Index also moved uni-directional, gaining 532 points during the session and closing at +428 points.

    Cement sector led the sentiment with MLCF realizing the most trading volumes in recent times.

    Majority of the cement sector scrips traded at and near upper circuits. Recently announced Housing Scheme has brighten the prospects for the Cement companies in addition to declining coal prices and increase in retail price / bag.

    Among O&GMCs, PSO and SSGC stood out with higher volumes and price appreciation. Similar bullish sentiment was observed in Steel sector, which saw ASTL and MUGHAL hitting upper circuits.

    Overall, Cement sector topped the volumes with 144.5 million shares (30 percent of total traded volumes), followed by Technology (43.2 million) and Engineering (34.2 million).

    Among scrips, PAEL (21.9 million) and TRG (21.2 million) followed MLCF with 76.4 million shares.

    Sectors contributing to the performance incude Cement (+162pt), O&GMCs (+56 points), E&P (+50 points), Banks (+37 points) and Autos (+31 points).

    Volumes increased from 292.7 million shares to 468.9 million shares (+60 percent DoD). Average traded value also increased by 94 percent to reach US$ 111.4 million as against US$ 57.5 million.

    Stocks that contributed significantly to the volumes include MLCF, PAEL, TRG, HASCOL and POWER, which formed 33 percent of total volumes.

    Stocks that contributed positively to the index include LUCK (+57 points), PSO (+42 points), DGKC (+34 points), MEBL (+21 points) and CHCC (+19 points). Stocks that contributed negatively include PSEL (-7 points), EFUG (-6 points), PAKT (-5 points), HUBC (-5 points), and BOP (-5 points).

  • FBR extends warehousing period up to July 31

    FBR extends warehousing period up to July 31

    ISLAMABAD: The Federal Board of Revenue (FBR) has taken a significant step by extending the warehousing period for already in-bonded goods up to July 31, 2020.

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  • Record $2.46 billion as remittances received in June

    Record $2.46 billion as remittances received in June

    KARACHI: State Bank of Pakistan (SBP) on Monday said that the workers’ remittances rose by a significant 50.7 percent during June 2020 to reach record high $2.46 billion compared with $1.63 billion in June 2019.

    Similarly, on a cumulative basis, workers’ remittances increased to a historic high level of $23.12 billion during FY20, witnessing a growth of 6.4 percent over $21.74 billion during FY19.

    The significant increase in remittances during June 2020 can be attributed to a number of factors. Since many of the countries eased lockdown in June, overseas Pakistanis were able to transfer accumulative funds, which they were unable to send earlier.  Further, it is also believed that they sent remittances to support extended families and friends due to COVID-19.

    In addition to these, efforts by the Government and SBP also played their role in the increased inflow of workers’ remittances during FY20 in general and Covid-19 period, March till June 2020, in particular.

    Supportive government policies in terms of extension of Reimbursement of TT Charges Scheme (Free Send Remittance Scheme) to small remitters by reducing threshold from USD 200 to USD 100, as well as, broadening the scope of incentive scheme for marketing scheme for financial institutions increased the incentives for sending remittances through regular channels.

    Further, on-boarding of a large number of technology based money transfer companies by SBP and PRI also helped absorb the shock of lockdowns.

    Financial institutions were motivated to use effective marketing campaigns with particular focus on digital channels for sending and receiving remittances to promote the use of legal channels.

    It would also be pertinent to mention here that inflow of workers’ remittances registered an increase of a 7.8 percent during March-June 2020 pandemic period compared with the corresponding period of 2019.

    During June 2020, larger amounts of Workers’ Remittances are received from Saudi Arabia (US $ 619.4 million), USA (US $ 452.0 million), UAE (US $ 431.7 million) and UK (US $ 401.0 million) recording an increase of 42.0 percent, 7.1 percent, 33.5 percent and 40.8 percent respectively as compared to May, 2020.

  • Rupee weakens by 28 paisas on demand for import, corporate payments

    Rupee weakens by 28 paisas on demand for import, corporate payments

    KARACHI: The Pak Rupee weakened by 28 paisas against dollar on Monday owing to higher demand of greenback on opening of market after weekly holidays.

    The rupee ended Rs166.63 to the dollar from last Friday’s closing of Rs166.35 in interbank foreign exchange market.

    Currency experts said that the market was reopened after two weekly holidays which escalated the demand of the foreign currency for import and corporate payments.

    They said that improved foreign exchange reserves and lower import demand to help the rupee to gain in coming days.

    The official reserves held by the SBP increased by $811 million to $12.042 billion by week ended July 03, 2020 as compared with $11.231 billion a week ago.

    The SBP attributed the increase in reserves to proceeds of $1,000 million as GOP loan disbursement from China.

    During the week, SBP also made government external debt payments of $ 231.2 million.

    The currency experts said that the lower import bill also helped the rupee to make gain.

    According to Pakistan Bureau of Statistics (PBS) the import bill of the country fell by 18.6 percent to $44.57 billion as compared with $54.76 billion in the preceding fiscal year.

    This helped the country to curtail the trade deficit for the year. The trade deficit of the country shrank by 27 percent to $23.18 billion during fiscal year 2019/2020 as compared with the deficit of $31.8 billion in the preceding fiscal year.

  • Pakistan allows Afghan transit trade through Wagah from July 15

    Pakistan allows Afghan transit trade through Wagah from July 15

    ISLAMABAD: Pakistan has allowed Afghan exports through Wagah border crossing from July 15, 2020, said a statement on Monday.

    At the special request of the Government of Afghanistan and with a view to facilitating Afghanistan’s transit trade, Pakistan has decided to resume Afghan exports through Wagah border crossing from July 15, 2020, after implementing COVID-19 related protocols.

    With this step, Pakistan has fulfilled its commitments under Pakistan-Afghanistan Transit Trade Agreement (APTTA).

    Pakistan has restored bilateral trade and Afghan transit trade at all border crossing terminals to pre-COVID-19 status.

    Pakistan remains fully committed to further strengthening its bilateral relations with Afghanistan in all areas including trade, and to facilitate Afghanistan’s transit trade under APTTA.

  • Taxpayers need to update profile to ensure active status

    Taxpayers need to update profile to ensure active status

    ISLAMABAD: Taxpayers are mandatorily required to update their profit in order to keep their name in the Active Taxpayers List (ATL), sources in Federal Board of Revenue (FBR) said.

    Amendment has been made to Income Tax Ordinance, 2001 through Finance Act, 2020, which is approved by the National Assembly.

    A new sub-section 2 has been included to Section 182A of the Ordinance, to make it mandatory for taxpayers to update their profile on the FBR’s online system in order to ensure their names are on the ATL.

    The new sub-section is read as:

    “(2) Where a person fails to furnish or update a taxpayer’s profile within due date or time specified in sub-section (3) of Section 114A or within the date as extended by the Board (FBR) under Section 214A, such person shall not be included in the active taxpayers’ list for the latest tax year ending prior to the aforesaid due date or extended date:

    “Provided that without prejudice to any other liability under this ordinance, such person shall be included in the active taxpayers’ list upon filing the taxpayers’ profile after the due date or extended date, if the person pays surcharge at Rupees –

    (a) twenty thousand in case of a company;

    (b) ten thousand in case of an association of persons; and

    (c) one thousand in case of an individual.”

    Through the Finance Act, 2020 fine and penalty have also been prescribed:

    Any person who is required to furnish or update a taxpayer’s profit but fails to furnish or update within the due date: such a person shall pay a penalty of Rs2500 for each day of default from the due date subject to a minimum penalty of Rs10,000.

  • Prime Minister emphasizes out-of-box solution for economic growth amid COVID

    Prime Minister emphasizes out-of-box solution for economic growth amid COVID

    ISLAMABAD: Prime Minister Imran Khan has emphasized out-of-the-box solutions are required for economic growth in these crucial times.

    “COVID-19 has adversely impacted the world economy and of Pakistan too,” he said while chairing a meeting of the Finance and Economy Think-Tank on Saturday.

    He stated that from day one, the government adopted a strategy to maintain a balance between sustaining economic activity and protecting the masses from infectious disease of Covid-19.

    Imran Khan emphasized that prime focus is on providing relief to the poor segment of society through targeted subsidies.

    He stated that Ehsaas is the flagship program of the government to alleviate poverty and requires expansion along with a strategy to reach the needy people.

    The prime minister highlighted that a substantive package has been announced for the construction and housing sector that aims at increasing much needed employment opportunities and economic stimulus as well as adding to the inventory of affordable housing for the poor.

    The prime minister highly appreciated the proposals presented by the Think-Tank regarding banking and finance, further improving the Ehsaas program and facilitating SMEs.

    He directed that regular feedback of the Think-Tank be provided to him on various ongoing initiatives, policies and programs of the government.

    Advisor on Finance Dr. Abdul Hafeez Sheikh, Advisor on Institutional Reforms Dr. Ishrat Hussain, Governor State Bank of Pakistan Raza Baqir and Former Finance Secretary Dr. Waqar Masood Khan were present.

    Advisor on Commerce Abdul Razaq Dawood, Shaukat Tareen, Sultan Alana, Dr. Ijaz Nabi and Arif Habib participated via Video-Link.

    Advisor on Finance briefed about the objectives and focus areas of this Think-Tank on Finance and Economy.

  • SBP imposes monetary penalty of Rs1.68 billion on 15 banks

    SBP imposes monetary penalty of Rs1.68 billion on 15 banks

    KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty of Rs1.68 billion upon at least 15 commercial banks for violating various regulations including anti-money laundering (AML) and counter financing of terrorism (CFT).

    The SBP on Saturday released the data of significant enforcement actions by the central bank during March – June 2020.

    The top banks are also amongst the list for serious violation of regulations including customers due diligence, known your customer, asset quality, foreign exchange operation, corporate governance and AML/CFT.

     Sr.NoInstitutionNature of OffenceAction TakenMonetary Penalty (Rupees in million)
    1United Bank LtdProcedural violations in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate GovernanceIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.137.001
    2JS Bank LtdProcedural Violations in the areas of CDD/KYC, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.71.417
    3Meezan Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.81.060
    4Faysal Bank LtdProcedural violations in the areas of CDD/KYC, Asset Quality, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.96.128
    5The Bank of PunjabProcedural violations in the areas of CDD/KYC, Asset Quality, FX Operations, Corporate GovernanceIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.286.333
    6Habib Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.204.217
    7MCB Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.158.474
    8National Bank OfProcedural violations in the areas of CDD/KYC, Asset Quality, FX OperationsIn addition to penal action the bank has been advised to strengthen its processes to avoid recurrence of such violations.269.810
    9Bank Alhabib LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.46.802
    10Habib Metropolitan Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.22.805
    11Bank Alfalah LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.40.305
    12Askari Bank LtdProcedural Violations in the area of CDD/KYCIn addition to penal action the bank has been advised to strengthen its processes related to CDD/KYC, to avoid recurrence of such violations in future.29.814
    13Bank Islami LtdProcedural violations in the area of FX OperationsIn addition to penal action, the bank has been advised to strengthen its process related to FX operations, in order to avoid recurrence of such violations in future.11.517
    14Punjab Provincial Cooperative Bank LtdViolations in the area of AML/CFTPenal and administrative action taken against the bank. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.81.500
    15Zarai Taraqiati Bank LtdViolations in the area of AML/CFTPenal and administrative action taken against the bank. Moreover, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.147.250

    The SBP said that these actions are based on deficiencies in regulatory compliance and does not constitute a comment on the financial soundness of the entity.

    The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.

    In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions.

  • Weekly Review: stock market may maintain positive momentum

    Weekly Review: stock market may maintain positive momentum

    KARACHI: The stock market may maintain positive momentum during the next week owing to improvement sentiments and ease in cases related to COVID-19.

    Analysts at Arif Habib Limited expect the market to maintain its positive momentum in the coming week.

    Investor’s sentiment is expected to improve further on account of continuous decline in COVID-19 cases on a daily basis.

    Moreover, with the SBP’s foreign exchange reserves climbing up, they expect the PKR/USD parity to stabilize.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2020) compared to Asia Pacific regional average of 13.1x and while offering DY of ~6.2 percent versus ~2.7 percent offered by the region.

    The market commenced on a positive note this week given flattening of the COVID-19 curve along with higher recovery rate of patients.

    Furthermore, jump in SBP’s foreign exchange reserves (up by USD 811 million), reduction in mark-up on Long Term Financing Facility (from 6 percent to 5 percent) and Temporary Economic Refinance Facility (from 7 percent to 5 percent) as well as extension in deferment of principal amount facility pushed the index beyond 36,000 points level.

    Moreover, surge in cement sales by 30 percent YoY in June 2020, fall in trade deficit by 27 percent YoY in FY20 and 19 percent YoY higher sales of OMCs during June 2020 added fuel to the sentiment.

    The index settled at 36,190 points, gaining 1,139 points (up by 3.3 percent) WoW.

    Sector-wise positive contributions came from i) Commercial Banks (495 points), ii) Cement (141 points), iii) Oil & Gas Exploration Companies (135 points), iv) Automobile Assembler (82 points) and v) Oil & Gas Marketing Companies (69 points).

    Whereas, negative contributions came from Power Generation and Distribution (23 points) and Fertilizer (17 points). Scrip-wise positive contributions were led by HBL (141 points), PPL (70 points), UBL (65 points), NBP (46 points) and INDU (43 points).

    Foreign selling continued this week clocking-in at USD 9.5 million compared to a net sell of USD 20.5 million last week.

    Selling was witnessed in Commercial Banks (USD 2.9 million) and Cement (USD 2.3 million). On the domestic front, major buying was reported by Insurance Companies (USD 4.6 million and Companies (USD 2.8 million).

    Average volumes settled at 349 million shares (up by 39 percent WoW) while average value traded clocked-in at USD 74 million (up by 44 percent WoW).

  • Pakistan makes substantial progress in completing remaining FATF Action Plan: Hafeez Shaikh

    Pakistan makes substantial progress in completing remaining FATF Action Plan: Hafeez Shaikh

    ISLAMABAD: Pakistan has made substantial progress towards completing remaining action plan of Financial Action Task Force (FATF) through increasing the effectiveness of its AML/ CFT Regime, Dr Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue told International Financial Accountability.

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