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  • Market to remain in red on rate cut pessimism

    Market to remain in red on rate cut pessimism

    KARACHI: The equity market likely to stay in red due to pessimism on high inflation, which created impressions the rate may not be cut in near future.

    Analysts at Arif Habib Limited forecast that the market to remain in the red following pessimism created from high inflation readings which have led to apprehensions over the rate cut which may not materialize soon.

    Moreover, shortfall in tax revenue targets (PKR 750bn shortfall expected for FY20) have added to concerns over the fiscal deficit recovery as well as possibility of more tax revenue measures.

    The KSE-100 index is currently trading at a PER of 7.0x (2020) compared to Asia Pac regional average of 12.2x and while offering DY of around 6.8 percent versus around 2.8 percent offered by the region.

    Correction phase seems to have set in, with the benchmark KSE-100 Index of Pakistan Stock Exchange (PSX) trading in the red another week. Aggravated inflationary pressure (14.6 percent YoY for Jan’20 – 10-Yr high) and turmoil in global markets following the outbreak of the Corona Virus have been the primary reasons behind the continuation of the selling spree in the local bourse.

    Further stress was created in the market from the rise in bond yields following the latest PIB auction in which the 3-Yr Bond cut-off yield increased by 30 bps to 12.05 percent, 5-Yr Bond yield increased by 21 bps to settle at 11.4 percent and the 10-Yr bond yield increased by 10 bps to 11 percent.

    The KSE-100 Index closed at 40,144 points (down 1,487 points WoW).

    Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (-376ts), ii) Commercial Banks (-241 points), iii) Oil & Gas Marketing Companies (-150 points), iv) Fertilizer (-140 points), and v) Cement (-125 points). Scrip-wise negative contributions were led by PPL (-158 points), OGDC (-125 points), HBL (-104 points), PSO (-74 points) and DAWH (-57 points).

    Foreign selling this week clocked-in at USD 14.2 million compared to a net buy of USD 8.0 million last week. Selling was witnessed in Cement (USD 7.0 million) and Exploration & Production (USD 5.1 million).

    On the domestic front, major buying was reported by Insurance Companies (USD 13.7 million) and Individuals (USD 7.7 million). Average Volumes settled at 168 million shares (down by 11 percent WoW) while average value traded clocked-in at USD 45 million (down by 1 percent WoW).

  • Import of live animals, birds banned on Coronavirus threat

    Import of live animals, birds banned on Coronavirus threat

    ISLAMABAD: The government has banned import of all types of live animals and birds with immediate effect in the wake of novel coronavirus.

    According to an official memo issued by the ministry of commerce to Quarantine Department a ban has been imposed on import of any zoonotic (animals and birds etc.) with immediate effect and until further orders.

    The memo said that on the recommendations of the Ministry of National Health Services, Regulations and Coordination (MNHSR&C), the ministry of commerce has imposed a ban on the import of any zoonotic (animals and birds etc.) with immediate effect and until further orders.

    The MNHSR&C has informed that the origin of recent outbreak of Novel type of Corona Virus (2019-nCOV) has been threat to be zoonotic in nature, which may potentially undermine government efforts to prevent the spread of said disease in Pakistan.

  • Educational institutions share information of persons paying annual fee above Rs200,000

    Educational institutions share information of persons paying annual fee above Rs200,000

    KARACHI: Educational institutions have provided details of persons paying over Rs200,000 annual fee to Federal Board of Revenue (FBR).

    Sources in the FBR said that the educational institutions had provided the details of persons paying annual fee of above Rs200,000 along with the withholding tax statement for the period July – December 2019.

    They said that the educational institutions are required to provide details of persons paying fees including their names, address, CNIC and amount tax withheld.

    The sources said that being withholding agents the educational institutions are required to file withholding statements biannually. The withholding statement for the period July – December 2019/2020 was due on January 31, 2020.

    The educational institutions are required to withholding tax under Section 236I of Income Tax Ordinance, 2001.

    Section 236I: Collection of advance tax by educational institutions.

    (1) There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule i.e. five percent on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.”

  • FPCCI urges government to declare cotton emergency

    FPCCI urges government to declare cotton emergency

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday urged the government to declare cotton emergency in order to increase the crop size.

    (more…)
  • Stock market face decline of 581 pts on selling pressure

    Stock market face decline of 581 pts on selling pressure

    KARACHI: The stock market witnessed decline of 581 points on Friday owing to heavy selling during the second half of trading day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,144 points as against 40,724 points showing a decline of 581 points.

    Analysts at Arif Habib Limited said that after opening on a positive note and gaining 145 points in the first session, the market saw heavy sell-off that aggravated in the second session losing 678 points during the session and closing -581 points.

    Bond yields for 3Y and 5Y were also observed to be trading at higher yields that caused concern amongst investors due to higher inflation and delay in possible rate cut.

    Selling activity was largely seen across the board amidst low volumes for better part of the day, but second session saw volumes picking up as prices declined steeply.

    Cement sector led the volumes table with 43.3 million shares, followed by Chemical (28.1 million) and Banks (26 million). Among scrips, MLCF realized trading volumes of 21.5 million, followed by LOTCHEM (17.4 million) and UNITY (14.3 million).

    Sectors contributing to the performance include Banks (-132 points), O&GMCs (-71 points), E&P (-65 points), Cement (-65 points) and Power (-42 points).

    Volumes increased from 127.9 million shares to 193.5 million shares (+51 percent DoD). Average traded value also increased by 16 percent to reach US$ 44 million as against US$ 38 million.

    Stocks that contributed significantly to the volumes include MLCF, LOTCHEM, UNITY, HASCOL and BOP, which formed 38 percent of total volumes.

    Stocks that contributed positively include EFUG (+9 points), FFC (+8 points), SCBPL (+4 points), BAHL (+3 points) and NATF (+2 points). Stocks that contributed negatively include HBL (-43 points), PSO (-41 points), HUBC (-30 points), DAWH (-27 points), and BAFL (-25 points).

  • Trade deficit narrows by 28.4% in July – January

    Trade deficit narrows by 28.4% in July – January

    KARACHI: Pakistan’s trade deficit narrowed sharply by 28.40 percent during first seven months (July – January) 2019/2020 owing to significant decline in import bill.

    According to trade data released by Pakistan Bureau of Statistics (PBS), the trade deficit shrank to $13.75 billion during first seven months of the current fiscal year as compared with $19.2 billion in the corresponding months of the last fiscal year.

    The reduction in trade deficit mainly attributed to fall in import bill. The import bill fell by 16 percent to $27.25 billion during July – January 2019/2020 as compared with $32.42 billion in the corresponding period of the last fiscal year.

    The exports of the country posted 2.14 percent growth to $13.5 billion during first seven months of current fiscal year as compared with $13.22 billion in the same period of the last fiscal year.

    The exports have come down by 3.17 percent when compared with $1.97 billion in January 2020 when compared with $2.04 billion in the same month of the last year.

    In the month of January 2020 the imports also came down by 9.63 percent to $4.04 billion as compared with $4.46 billion in the same month of the last year.

    However, the growth in imports was flat at $4.04 billion in January 2020 as the imports were at the same level in December 2019.

    The exports also fell 1.15 percent to $1.94 billion in January 2020 when compared with $1.99 billion in the month of December 2019.

  • Rupee gains eight paisas amid import, corporate demand

    Rupee gains eight paisas amid import, corporate demand

    KARACHI: The Pak Rupee gained eight paisas against dollar on Friday amid demand for import and corporate payments.

    The rupee ended Rs154.41 to the dollar from previous day’s closing of Rs154.49 in interbank foreign exchange market.

    Currency dealers said that the market was initiated with higher demand of dollar earlier in the day. However, inflows of export receipts and foreign remittances helped the rupee to appriciate.

    The foreign currency market was initiated in the range of Rs154.52 and Rs154.57. The market recorded day high of Rs154.55 and low at Rs154.40 and closed at Rs154.41.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of the dollar was recorded at Rs154.30/Rs154.60, same previous day’s closing level, in cash ready market.

  • Allied Bank declares 10% growth in annual net profit

    Allied Bank declares 10% growth in annual net profit

    KARACHI: Allied Bank Limited has declared 10 percent growth in annual profit for calendar year 2019 owing to significant increase in net mark-up income.

    According to financial results for calendar year 2019 released on Friday, the bank declared Rs14.11 billion after tax profit as compared with Rs12.88 billion profit in the preceding year.

    The bank also announced Rs12.32 as earning per share for the year as compared with EPS of 11.25 declared in the last year.

    The net interest income of the bank registered 29.24 percent increase to Rs41.5 billion in calendar year 2019 as compared with Rs32.11 billion in the preceding year.

    However, total non-markup income slightly fell to Rs10.89 billion in 2019 as compared with Rs11.29 billion in the last year.

    Therefore, the total income of the bank rose to Rs53.4billion in 2019 as compared with Rs43.4 billion in the preceding year.

    Operating expenses of the bank were increased at Rs28.18 billion in 2019 as compared with Rs24.52 billion in preceding year.

    The bank contributed income tax to the tune of Rs10.13 billion in the calendar year 2019 as compared with Rs8.13 billion in the preceding year, posting a significant increase of 25 percent.

  • Bearer bonds withdrawal documents Rs243 billion

    Bearer bonds withdrawal documents Rs243 billion

    KARACHI: An amount of Rs243 billion has been documented by people through surrendering bearer prize bonds of Rs40,000 denomination.

    According to official statistics, the investment in unregistered prize bonds of Rs40,000 denomination fell to Rs14.55 billion by December 2019 as compared with Rs258 billion in May 2019.

    The government on June 24, 2019, announced to discontinue the circulation of Rs40,000 denomination national prize bonds.

    In compliance to the government announced the State Bank of Pakistan (SBP) also issued instructions to banks. The central bank issued a procedure for the banks to facilitate the general public in exchanging the unregistered prize bonds with three different modes.

    The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).

    4th draw of Rs25,000 premium prize bonds announced

    The SBP asked the banks that such prize bonds would not be sold after June 24, 2019, and will not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.

    Due to the replacement of the bearer prize bonds of Rs40,000 denomination, the total investment in prize bonds fell to Rs718.38 billion by December 2019 as compared with Rs951.64 billion in May 2019.

    The bearer papers have been known as a parking lot for the undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card (CNIC) and a valid bank account.

    Till May 2019 the total investment in premium prize bonds was Rs6.17 billion. But after the restriction imposed on bearer bonds the investment into registered prize bonds increased to Rs17.71 billion by the end-December 2019.

    According to the SBP, the bearer instrument can be exchanged in savings schemes such as Special Saving Certificates (SSC) or Defence Saving Certificates (DSC). While the third mode of exchanging the bearer bonds was direct transfer to bank accounts.

    19th draw of Rs40,000 premium prize bonds announced

    The government is intended to transform all the bearer prize bonds into registered scrips. In this regard, the Central Directorate of National Savings in collaboration with SBP is planning to issue scripless registered prize bonds amongst all denominations with objective to document the economy.

  • Digital Pakistan Initiative chief visits CDC

    Digital Pakistan Initiative chief visits CDC

    KARACHI: Ms. Tania Aidrus, Head of Prime Minister Imran Khan’s Digital Pakistan Initiative visited Central Depository Company to explain key objectives of the digital Pakistan initiatives, a statement said on Thursday.

    She was welcomed by CDC’s senior management team led by Badiuddin Akber, CEO-CDC who briefed her about the contribution of CDC in transforming the Pakistan Capital Market.

    He also highlighted CDC’s efforts towards digitization of a number of industry sectors including Pakistan Capital Market & Insurance Industry and future plans to introduce reforms in the Government Sector including Zakat Repository and Digitization of National Savings Certificates.

    Ms. Aidrus was pleased to learn about CDC’s achievements and vowed to extend her full support for any future projects.

    The briefing was followed by an interaction session between CDC’s staff with Ms. Aidrus where she talked about key objectives of the Digital Pakistan Initiative which are Access & Connectivity to Internet and Availability of Digital Infrastructure for every Pakistani, eGovernance that digitizes intra-government operations & eGovernment services for citizens, Digital Skilling & Literacy enabling technical graduates to secure relevant jobs and Innovation & Entrepreneurship enabling environment for startups.

    While responding to questions from CDC’s staff members about the prospects of Digital Pakistan Initiative, she reiterated her resolve that “it is not a question of whether we will succeed or not. It is a question of how quickly we can.”