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  • Weekly Review: market may stay positive on IMF deal

    Weekly Review: market may stay positive on IMF deal

    KARACHI: The stock market likely to stay positive during the next week owing to expectation of IMF and Pakistan reach agreement.

    Whereas, current macro-economic concerns such as higher inflationary reading due to jump in petroleum prices could keep the market range-bound.

    Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week. With IMF and Pakistan expected to reach agreement soon, the investor sentiment is anticipated to be upbeat.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.0x (2022) compared to Asia Pac regional average of 14.6x while offering a dividend yield of 8.4 per cent versus 2.2 per cent offered by the region.

    The market commenced on a positive note this week since the government was able to convince TLP to call off its protest at the capital.

    Moreover, rebound in Pak Rupee against greenback (settling at PKR 170.01), substantial reduction in international coal prices (down by 34 per cent WoW) and narrowing of trade deficit on a month-on-month basis by 10 per cent further strengthened the sentiment.

    PM Khan’s announcement of PKR 120 billion subsidy package on essential food items further kept the momentum robust. Though profit-taking was witnessed briefly in few scrips but the sentiment remained unchanged. Albeit, the KSE-100 index closed at 47,296 points, climbing up by 1,111 points (up by 2.4 per cent WoW).

    Sector-wise positive contributions came from i) Technology (490 points), ii) Fertilizer (136 points), iii) Refinery (115 points), iv) OMC’s (36 points), and v) Textile Composite (33 points). Whereas, sectors which contributed negative were i) Textile Weaving (14 points), and ii) Paper & Board (9 points). Scrip-wise positive contributors were SYS (241 points), TRG (210 points), MEBL (72 points), NRL (48 points) and FFC (41 points). Meanwhile, scrip-wise negative contribution came from UBL (38 points), LUCK (35 points) and HBL (33 points).

    Foreign selling continued this week, clocking-in at USD 11.2 million compared to a net sell of USD 2.7 million last week. Major selling was witnessed in Commercial Banks (USD 5.6 million) and Fertilizer (USD 1.4 million). On the local front, buying was reported by Individual (USD 14.5 million) followed by Insurance Companies (USD 6.5 million). Average volumes clocked-in at 430 million shares (up by 2.4 per cent WoW) while average value traded settled at USD 89 million (up by 121 per cent WoW).

    Stock market gains 77 points amid profit taking
  • Full plan pivotal to regain economic glory: Tarin

    Full plan pivotal to regain economic glory: Tarin

    KARACHI: Shaukat Tarin, Advisor to Prime Minister on Finance and Revenue, on Friday said that comprehensive economic plan is pivotal to regain Pakistan’s economic glory.

    “Comprehensive economic plan and political will was pivotal in order to regain country’s lost economic glory,” he said.

    He stated this while addressing as a chief guest at 18th Annual Excellence Award ceremony of Chartered Financial Analysts (CFA) Society at a local hotel.

    He said almost all economic indicators were showing positive growth.

    Shaukat Tarin said when the PTI government came into power there was large current account deficit and devalued rupee. The government entered into a tough IMF program with many conditions which initially led to slowing down the economy.

    Then came the COVID-19 pandemic which also damaged our economy to some extent.

    However, he said, Prime Minister Imran Khan’s visionary idea to impose smart lockdown which was recognized globally saved the country from further economic crisis.

    Shoukat Tarin said PM concurrently invested in agriculture, housing, industrial and exports sectors. All those areas which promoted employment in the country and resulted in 3.94 growth last year.

    He said the government to strengthen industry and exports the government gave incentives to both sectors with prime focus on IT industry and its related exports.

    Besides, the government also was going to give subsidies to energy sector for its uplifting.

    Advisor to PM also shed light on economic crisis caused by the improper plannings and no execution of policies of previous governments.

    Shaukat Tarin for finalizing tax harmonization at earliest
  • Weekly Review: stock market likely to remain positive

    Weekly Review: stock market likely to remain positive

    KARACHI: The stock market is likely to stay positive during the next week as the IMF and Pakistan expected to reach an agreement.

    Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week. With IMF and Pakistan expected to reach agreement soon, the investor sentiment is anticipated to remain buoyant.

    Moreover, with the ongoing result season, certain sectors and scrips are expected to stay under limelight.

    Keeping in view concerns over inflation and devaluation of Pak Rupee against greenback, investors are expected to have a cautious approach.

    The KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.2x (2021) compared to Asia Pac regional average of 14.7x while offering a dividend yield of ~8.1 per cent versus ~2.2 per cent offered by the region.

    The market commenced on a negative note this week given the uncertainty over outcome of Pakistan-IMF talks tagged with surge in petroleum prices raising concerns over inflation.

    The market sentiment changed after Advisor to the PM informed that talks with IMF were moving in the positive direction, with staff-level agreement expected to be reached soon.

    Alongside this, the current account deficit for September 2021 narrowed by 24.5 per cent MoM to USD 1.1 billion, fueling the positive momentum.

    On the flip, continuous drop in PKR/USD parity to PKR 174 (all time high exchange rate), reduction in SBP reserves by 8 per cent WoW to USD 17.5 billion and FATF retaining Pakistan on grey-list in its plenary meeting, kept the index in check.

    Albeit, the market closed at 45,578 points, gaining 757 points (up by 1.7 per cent) WoW.

    Sector-wise positive contributions came from i) Commercial Banks (463 points), ii) Cement (184 points), iii) Oil & Gas Exploration Companies (137 points), iv) Fertilizer (107 points), and v) Insurance (42 points).

    Whereas, sectors which contributed negatively were i) Technology & Communication (155 points), and ii) Food & Personal Care Products (31 points).

    Scrip-wise positive contributors were HBL (187 points), UBL (150 points), ENGRO (99 points), LUCK (72 points) and MCB (64 points).

    Meanwhile, scrip-wise negative contribution came from TRG (113 points), PSO (27 points) and SYS (26 points).

    Foreign selling continued this week, clocking-in at USD 7.3 million compared to a net sell of USD 13.3 million last week. Major selling was witnessed in Fertilizer (USD 4.5 million) and Commercial Banks (USD 3.8 million). On the local front, buying was reported by Insurance Companies (USD 4.6 million) followed by Other Organizations (USD 2.5 million).

    Average volumes clocked-in at 299 million shares (down by 13 per cent WoW) while average value traded settled at USD 64 million (down by 10 per cent WoW).

    Stocks end down by 243 points on political unrest
  • No deadlock in Pakistan, IMF talks: spokesman

    No deadlock in Pakistan, IMF talks: spokesman

    ISLAMABAD: The ministry of finance on Sunday rejected a news story regarding failure of talks between Pakistan and the International Monetary Fund (IMF), said there was not any deadlock with the IMF.

    Finance ministry spokesman Muzammil Aslam, in a statement, said that there was not truth in news about the deadlock, adding that the talks would resume from Monday (tomorrow) and would continue uninterrupted as per schedule.

    Aslam said the date for ending talks was not fixed and the negotiation would continue till success of the talks.

    He said Minister for Finance Shaukat Tarin and Governor State Bank of Pakistan Reza Baqir were attending meetings in New York while the Secretary Finance and his team were engaged for talks in Washington DC as per schedule.

    IMF starts distributing largest ever $650 billion allocation
  • GST exemption on various goods may be withdrawn

    GST exemption on various goods may be withdrawn

    Pakistan’s Federal Board of Revenue is likely to withdraw exemption and concession of general sales tax (GST) granted on many consumable items.

    The consumption tax may be withdrawan on the supply of goods to generate an estimated revenue of Rs334 billion, news reports suggested.

    The exemption of GST may be withdrawn on supplies of various local and imported goods. The exemption and concession of consumption tax may continue on basic food items.

    The report suggested that Personal Income Tax (PIT), there are 11 slabs and one proposal under consideration is to bring down slabs to 6 or 7 where the minimum taxable ceiling of Rs0.6 million might be adjusted upward while the rate of higher-income brackets might be increased.

    The hike in power tariff to the tune of Rs1.40 per unit might be notified after the agreement with the IMF.

    Federal Minister for Finance Shaukat Tarin is expected to hold a meeting with the IMF’s Managing Director (MD) Kristalina Georgieva on October 15, 2021 in Washington, DC. However, things are still unclear whether Pakistan and the IMF will be able to strike a staff-level agreement or not. The review talks may be extended if both sides remained unable to strike any staff-level agreement on the completion of the sixth and seventh reviews under the $6 billion Extended Fund Facility (EFF).

    Sources said that the IMF was advising stringent taxation measures but Pakistani authorities were making last-ditch efforts to convince the IMF for delaying taxation measures on account of withdrawal of sales tax exemptions and adjustment into Personal Income Tax till the announcement of the next budget 2022-23 or implementation of these steps in a staggered manner.

  • IMF starts distributing largest ever $650 billion allocation

    IMF starts distributing largest ever $650 billion allocation

    Washington, DC: International Monetary Fund (IMF) on Monday started distribution of the largest ever allocation of $650 billion to provide additional liquidity to the global economic system.

    Ms. Kristalina Georgieva, Managing Director of the IMF made the following statement on Monday:

    “The largest allocation of Special Drawing Rights (SDRs) in history—about US$650 billion—comes into effect today. The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.

    “The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

    “SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about US$275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 billion – equivalent to as much as 6 percent of GDP in some cases.

    “SDRs are a precious resource and the decision on how best to use them rests with our member countries. For SDRs to be deployed for the maximum benefit of member countries and the global economy, those decisions should be prudent and well-informed.

    “To support countries, and help ensure transparency and accountability, the IMF is providing a framework for assessing the macroeconomic implications of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability. The IMF will also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years’ time.

    “To magnify the benefits of this allocation, the IMF is encouraging voluntary channeling of some SDRs from countries with strong external positions to countries most in need. Over the past 16 months, some members have already pledged to lend US$24bn, including US$15 billion from their existing SDRs, to the IMF’s Poverty Reduction and Growth Trust, which provides concessional loans to low-income countries. This is just a start, and the IMF will continue to work with our members to build on this effort.

    “The IMF is also engaging with its member countries on the possibility of a new Resilience and Sustainability Trust, which could use channeled SDRs to help the most vulnerable countries with structural transformation, including confronting climate-related challenges. Another possibility could be to channel SDRs to support lending by multilateral development banks.

    “This SDR allocation is a critical component of the IMF’s broader effort to support countries through the pandemic, which includes: US$117 billion in new financing for 85 countries; debt service relief for 29 low-income countries; and policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery.”

    IMF projects Pakistan’s GDP growth at 5pc in FY24
  • Rupee makes 42 paisas gain against dollar

    Rupee makes 42 paisas gain against dollar

    KARACHI: The Pak Rupee (PKR) made a gain of 42 paisas against the dollar on Wednesday after witnessing deterioration in first two days of the week.

    The rupee ended Rs163.47 to the dollar from previous day’s closing of Rs163.89 in the interbank foreign exchange market.

    The local currency lost Rs1.46 against the dollar during first two days of the current week. So far the rupee lost around 5.93 against the dollar from the closing of June 30, 2021.

    Currency experts said that the rupee gained on reports of funds allocations of $650 billion by the International Monetary Fund (IMF) to boost global economy. Pakistan will get around $2.8 billion out of this allocation.

    The experts said that encouraging inflows of exports and workers’ remittances would help the rupee to make gain in coming days.

    However, they said the payment against external debt may put pressure on the local currency.

  • Rupee weakens by 22 paisas in interbank

    Rupee weakens by 22 paisas in interbank

    KARACHI: The Pak Rupee (PKR) ended down by 22 paisas against the dollar on Tuesday as demand for external payment remained high.

    The rupee ended at Rs163.89 to the dollar from previous day’s closing of Rs163.67 in the interbank foreign exchange market.

    Currency experts said that the external payment had put pressure on the local currency.

    However, they said that the pressure would ease in coming days as recent pledge of the International Monetary Fund (IMF) for providing $650 billion to boost global liquidity.

    The experts said that Pakistan would also get around $2.8 billion under this allocation by month end.

    The local currency fell to Rs164 in intraday trading in the interbank foreign exchange market. However, it made some recovery later in the day.

  • FBR projects Rs5,700bn tax collection for next fiscal year; IMF says ‘do more’

    FBR projects Rs5,700bn tax collection for next fiscal year; IMF says ‘do more’

    ISLAMABAD: The Federal Board of Revenue (FBR) has estimated Rs5,700 billion as a net revenue collection for the next fiscal year 2021/2022, around Rs263 billion less then projection of International Monetary Fund (IMF).

    (more…)
  • Finance ministry, IMF meeting to finalize budget proposals

    Finance ministry, IMF meeting to finalize budget proposals

    ISLAMABAD: An important meeting of the ministry of finance with representatives of International Monetary Fund (IMF) will be held today evening (Thursday evening) to finalize the recommendations for budget 2021/2022.

    Senior officials of the ministry of finance, three representatives, including country head, of IMF and senior officials of Federal Board of Revenue (FBR) will attend the meeting, sources said.

    Officials of the IMF will attend the meeting through video link.

    The meeting will discuss important points of the budget, which will include salary income tax and sales tax reforms.

    The sources said that the meeting would finalize tax slabs for salaried persons.

    The IMF had proposed reduction in salary tax slabs from 11 to five. Further the meeting will discuss sales tax incentives and reduced rates.

    The sources said that the government would finalize the proposals after discussions with the IMF.

    The source said that the government is considering an increase of 10 percent in salaries and pension. This increase would be given through adhoc basis. However, the government is not considering to grant the increase in basic pay scale.

    The government has decided to allocate an amount of Rs900 billion for Public Sector Development Program (PSDP).  The budget deficit may be curtailed at six percent of the GDP.

    In his recent statement, Finance Minister Shaukat Tarin had already made it clear that the government was not in position to take strict measures due to covid pandemic.