Showing posts with label upcoming elections. Show all posts
Showing posts with label upcoming elections. Show all posts

Friday, 26 January 2024

Pakistan Stock Exchange gains 531 points

The week ending January 26, 2024 started on a positive note, riding the wave of optimism generated by the IMF's favorable review report. The benchmark index closed the week with gains of 531 points at 63,812.

Following this upbeat start, the E&P sector took center stage over developments on clearance of circular debt amounting to PKR1.2 trillion.

As the week drew to a close, conflicting narratives emerged, creating uncertainty around the viability of the circular debt plan. News reports, citing insiders, presented divergent stories—one suggesting the imminent presentation of the plan to the IMF and another reporting objections raised by the Finance Ministry. This uncertainty contributed to corrections observed in the last two trading days, with the likelihood of rate cuts diminishing.

Although discussions around rate cuts gained traction with reduction in cut-off yields in the last T-bills auction, the specter of persistent inflation, projected at 28% for Jan’23, tempered expectations of any rate cut.

The foreign exchange reserves held by State Bank of Pakistan witnessed a weekly increase of US$243 million. The inflow of US$700 million from the IMF was constrained by debt repayments.

Market participation remained cautious due to uncertainties surrounding the circular debt plan and the impending Monetary Policy Committee stance, with average daily traded volume exhibiting a decline of 16%WoW at 392 million shares from 467 million shares in the earlier week.

Other major news flows during the week included: 1) Pakistan and Kuwait to set up US$1 billion fund and 2) Cabinet body set to okay brown-field refinery policy.

Textile Composite, E&P, and Leather & Tanneries companies were amongst the top performers, while Automobile parts & Accessories, Transport, and Property were amongst the worst performers.

Major net selling was recorded by Foreigners with a net sell of US$22.7 million. Insurance absorbed most of the selling with a net buy of US$9.6 million.

Top performers of the week were: OGDC, ATLH, APL, LCI, and HMB, while top laggards included: HCAR, PTC, GADT, JVDC, PIBTL.

Market outlook hinges significantly on interest rate move scheduled to be announced on Monday January 29. While the status quo has already been factored into the market expectations, any surprise rate cut could likely trigger an immediate rally.

The resolution of the circular debt clearance plan in the upcoming week is anticipated to provide clarity to market participants, especially in the context of E&P stocks.

As the elections draw near, the settling dust is indicative of stabilization and with successful completion is anticipated to inject positive momentum into the market.

Investors are advised to seize every opportunity for the accumulation of blue-chip stocks.

 

Sunday, 24 December 2023

Bangladesh: Garment Workers’ Strike Call

According to Bangladesh Chronicle, Sammilita Sramik (SSP) Parishad, an alliance of 10 labour rights organizations, on Saturday announced that the workers of the country’s garment sector would begin an indefinite strike from January 01, 2024 if their demands were not met by December 31, 2023.

The alliance made the announcement at a discussion at Dhaka Reporters Unity in the capital.

The SSP also said that the factories would remain closed until their demands were met and that they would conduct a mass contact program in all sectors on Sunday.

AAM Fayez Hossain, chief coordinator of the SSP, announced the program from the discussion.

The discussion was organized to demand the trial of killings of those killed during the wage hike movement, the treatment of the injured workers, the release of the arrested workers, the reinstatement of the dismissed workers and the review of wages announced in the garment sector by setting the minimum wage as Tk 25,000.

Fayez Hossain said that they held a rally on December 01 and raised the demands there.

‘Even after a month, the government is yet to respond in this regard,’ he said.

He urged all political parties, students, farmers and labour organizations to take the initiative to make the strike successful by turning it into an all-out strike.

Addressing the program, BNP standing committee member Nazrul Islam Khan said that there were political reasons behind underpaying workers.

‘We are conducting a democratic movement in the country. We have come to a stage of the movement. Therefore, we are talking about boycotting the January 07, 2024 election. We urge people not to go to polling centres,’ he added.

Revolutionary Workers Party general secretary Saiful Huq urged the workers and other professionals to join the street movement to realize their demands as well as ousting the Awami League government.

Nagarik Oikya president Mahmudur Rahman Manna urged the workers to hold their movement in a manner that would lead the fall of the government.

Ganosamhati Andolan chief coordinator Zonayed Saki said that workers would not get justice for the killing of their fellows if they were not united.

He said that no case was even filed in connection with the recent killing of four garment workers.

Among others, Jatiya Party (Kazi Zafar) chairman Mustafa Jamal Haider, former student leader and freedom fighter Fazlur Rahman, Islami Andolan Bangladesh presidium member Ashraf Ali Akand, Gono Odhikar Parishad president Nurul Haque Nur, State Reform Movement coordinator Hasnat Qayyum, Bhashani Onusari Parishad convener Sheikh Rafiqul Islam Bablu and Bangladesh Garment Workers Solidarity Association chief Taslima Akhtar Lima spoke at the discussion.

Representatives of the Bangladesh Workers’ Federation, Bangladesh Workers’ Rights Parishad, Nationalist Workers’ Party, National Socialist Workers’ Alliance, Islamic Workers’ Movement Bangladesh, Bangladesh Multipurpose Hawker Association, National Workers’ Party (Zafar), Bangladesh National Workers’ Alliance, Garments Workers’ Movement, State Reform Workers’ Movement, Nationalist Workers Party, Nirman Sramik Sangam Parishad, Bangladesh Sramik Kalyan Majlis, Nagarik Sramik Oikya, Revolutionary Workers Solidarity, Government Employees Coordination Council, Bangladesh Revolutionary Garments Sramik Solidarity, Bhasani Sramik Parishad and Combined Garments Workers Alliance were also present.

 

Thursday, 28 September 2023

Pakistan Stock Exchange closes almost flat

The market remained lackluster throughout the week ended on September 28, 2023.

Despite the visit of the Caretaker Prime Minister to the UN, no significant positive developments or outcomes were observed.

On the macroeconomic front, the federal government is intensifying its efforts to reduce spending following a recommendation from the World Bank, aiming to simultaneously increase revenues. The news flows indicated a possible reduction in the PSDP spending.

 Inflation for this month is still expected to remain high, around 30%YoY. Meanwhile, the Pakistani rupee continues to strengthen against the greenback, posting a weekly gain of 1.4% to close at PKR287.7/US$ by week-end.

Internationally, oil prices have resumed their upward trend, amid supply crunch, after a brief easing earlier in the week, with Brent crude currently hovering at US$95.6 per barrel.

Overall, average trading volumes improved by 45.6%WoW rose to 202 million shares as compared to 139 million shares traded in the earlier week.

The benchmark KSE-100 Index lost 189 points during the week, depicting a 0.4% decrease in the index.

Other major news flows during the week included: 1) profit repatriation surged by 74% in July-August, 2) Jul-Aug period borrowing from multiple financing sources rose to US$3.206 billion, 3) RDA inflows reported at US$6.6 billion for August, 4) CGS of KSA Armed Forces met President, and 5) Pakistan owed US$1.2 billion to Chinese power producers.

Transport, Tobacco, and Paper & Board were amongst the top performing sector. Vanaspati and allied industries, Technology and Textile were amongst the worst performing sector.

Major net selling was recorded by Banks with net selling of US$6.3 million. Individuals and companies absorbed most of the selling with a net buy of US$3.7 million and US$1.4 million, respectively.

Top performing scrips of the week were: EFUG, PGLC, CEPB, NRL, and PAKT, while top laggards were: POL, GADT, SYS, FFBL, and HBL.

Looking ahead, the market's performance is anticipated to be significantly influenced by the upcoming IMF review scheduled for November.

Regarding the political landscape, while the expected timeline for elections is given, providing exact dates for the elections would be a positive development.

Upcoming inflation readings and current account data would remain in the limelight. Overall, we continue to advise our investors to remain cautious while investing and consider companies with strong fundamentals and high dividend-yielding companies.

Friday, 11 August 2023

Pakistan stock market closes almost flat

The week ended on August 11, 2023 started on a positive note, but faced volatilities as the week prolonged with the benchmark index closing the week at 48,424 points, reflecting a decrease of 0.33%WoW.

The average daily turnover clocked in at 287 million, down 26.9%WoW. The market capitalization dropped to PKR7,232 billion, from PkR7,290 billion.

Major drivers during the week remained multimillion investment commitments by GCC countries, UAE and Saudi Arabia and the triumphant oversubscription of MTBs much higher than the anticipated pre-auction target.

Furthermore, the total foreign exchange reserves witnessed a 0.9%WoWdecline, additionally workers’ remittances declined by 7.3%MoM and 19.3%YoY to US$2.03 billion in July 2023. Cumulatively remittances for 7MCY23 were reported at US$14.9 billion, down 16.9%YoY.

Other notable news from the week were: 1) CCoE approval for up-gradation for local refineries , 2) transfer of 15 companies to MSCI FM index from the small cap index, and 41 other companies were added to the small cap MSCI Index, 3) emergence of NBP, BoP and U bank as the top agri-microfinance creditors, 4) penetration of local rice traders into the global rice trade nexus as a result of restriction imposed by India on rice export, and 5) dissolution of the national assembly and anticipation of the caretaker govt.

Sector-wise, REFINERY declined by 11%, while INV. BANKS/ INV. COS/ SECURITIES COS. gained 8.3%.

Top performing scrips were: DAWH, AICL, FABL, UBL, and NATF, while laggards included PSMC, HCAR, CNERGY, SML, SEARL, and NRL.

BANKS/DFIs recorded a net sell of US$6.9 million. Insurance Companies absorbed all of the selling with a net buy of US$6.4mn.

The market is expected to portray positivity, while the installation of the caretaker government and the relation it fosters with IMF are likely to usher in market stability.

Despite a significant upside, market still remains attractive. Additionally, the influx of investments from UAE and Saudi can bolster and affirm stability.

Market participants are advised to implement a cautious approach when investing while focusing on dollar denominated revenue stream companies like E&Ps and Technology to hedge against currency risk or in companies with healthy dividend yields.

Saturday, 15 July 2023

Pakistan Stock Exchange benchmark index posts 1.9%WoW gain

Pakistan Stock Exchange witnessed bullish sentiments during the first three trading sessions. However, profit-taking by investors resulted in market closing in red during the last two sessions. Still the benchmark index managed to gain 861 points during the week ended on July 15, 2023 and close at 45,068 points, up 1.9%WoW.

Market participation remained healthy with daily traded volume averaging at 352 million shares as compared to an average of 265 million shares during the earlier week up 33%WoW.

The market performance was characterized by the IMF’s executive board’s approval of the SBA (Stand-By Arrangement) and the inflow of US$1.2 billion. Additional support was provided by influx of US$2.0 billion from Saudi Arabia and US$1.0 billion from United Arab Emirates. The inflows would reflect in the next week's reserve numbers held by State Bank of Pakistan (SBP) which are anticipated to cross US$8 billion mark after 9 months. As of July 07, SBP held reserves were reported at US$4.5 billion.  As a result PKR gained 0.11%WoW to close at PKR277.6/ US$ parity.

Other major news flows during the week included: 1) steps taken to broaden tax base, 2) July-May LSMI output declined 9.87%YoY, 3) FY23 remittances fall 13.6%YoY to US$27 billion, 4) car sales plunged 82% in June and 59% in the last financial year, 5) GoP announced to mobilize additional PKR3.2 trillion from power consumers and 6) during Jan-May period 4.88 million mobile phones manufactured in country.

Chemical, Automobile Parts & Accessories, and Leather & Tanneries emerged the top performers. Close-End Mutual Fund, Technology & Communication, and Textile Spinning were amongst the worst performers.

Flow-wise, major net selling was recorded by Mutual Funds with a net sell of US$5.97 million. Individual absorbed most of the selling with a net buy of US$3.93mn.

Top performing scrips were: during the week were: UNITY, HCAR, COLG, PSMC, and AIRLINK, while laggards included: GADT, UPFL, SHEL, PGLC, and TRG.

Stock market is expected to remain positive, owing to growing foreign exchange reserves and consequent improvements in the PKR/ US$ parity.

At present market offers attractive valuation. However, upcoming results may exert pressure on bullish sentiment due to the retrospective imposition of the super tax.

Investors are advised to follow a cautious approach in the selection of scrips and focus on stocks with dollar-denominated revenue streams (Tech and E&Ps) and companies with healthy dividend-yields.

 

 

Sunday, 2 October 2022

Need to explore causes of floods in Pakistan

Large areas of Pakistan were inundated in 2010 by heavy floods, resulting in the displacement million of people. Experts had termed it one of the worst humanitarian catastrophes the country has suffered.

Twelve years later, massive flooding has forced analysts and political leaders alike to search for new adjectives that can describe the devastation caused by monsoon rains, appropriately.

It may be recalled that the Metrological department had warned about the intensity of rain and resulting devastation, but it was too late to avert the situation. Now the government has declared a national emergency and has desperately sought urgent aid from the international community.

While the UN promised US$160 million and other countries pledged aid, government officials say the floods have inflicted an estimated loss of at least US$30 billion.

Pakistan having more than 220 million populations faces the greatest humanitarian crisis. More than 1,200 people have died, one-third of the country is still submerged and at least 33 million people are affected. The National Disaster Management Authority (NDMA) puts the number of affected districts at 72 out of a total 160.

The NDMA estimates damage to more than 5,000km of roads, 10 million houses partially or fully destroyed, and the death of 700,000 livestock, often people’s only livelihood.

The southern province of Sindh remains the worst affected. As of August 30, more than 14 million people in the province are badly affected, of which only 377,000 are living in camps right now.

The Global Climate Risk Index puts Pakistan as the eighth most vulnerable country because of disasters caused by climate change, yet the country is responsible for less than 1 percent of the world’s planet-warming gases.

Extreme weather conditions have left the country precariously placed, where weather patterns are no longer predictable.

Earlier this year, the country faced unprecedented heat waves and months-long drought in Sindh and Balochistan. Only a few months later, Pakistan broke its decades-long rainfall record with the two provinces receiving 500 percent more rain than the annual average.

Sara Hayat, a Lahore-based climate change lawyer and policy specialist said, to ascertain what has caused the devastating floods, it needs to be seen as a pyramid of factors with the foundational one being global climate change.

Hayat said the flooding was caused by excessive torrential rain, as well as glacial melt in the north of the country.

“Pakistan generally gets three to four cycles of monsoon rains,” she said. “This year we have received eight already and there are predictions that rain will go on till October. This is extremely unusual.”

Ali Tauqeer Sheikh, an Islamabad-based climate change analyst aid, unlike the 2010 floods that were riverine in nature, this year saw multiple types overlapping each other that resulted in heavy destruction across the country.

The urban flooding, flash flooding, glacial lake bursts as well as cloud bursts as some of the different types of flooding to hit the country, all linked to climate change activity.

These are not routine floods. In fact, Pakistan has not had riverine floods at all this year. This is perhaps the first time the country saw climate change affecting patterns of monsoon. Only time will tell if it was a freak event of nature, or it will become a routine.

It is easy to pin blame on the government, preparing for this scale of flooding was always going to be a difficult job.

At a time when the country is already reeling from back-breaking inflation and barely averted a default after the International Monetary Fund (IMF) released US$1.17 billion funds, an once-in-a-lifetime flood was the last thing Pakistan needed. Added to this volatile mix is perpetual political instability, exacerbated since the removal of the Pakistan Tehreek-e-Insaf (PTI) government in April.

It is imperative that political warmongering stop and priorities be adjusted to face the daunting challenge of rebuilding.

One of the biggest challenges Pakistan will face is when the country goes into election cycle. It is necessary to say that flood relief efforts and rehabilitation of the affected population must accompany all political conversation in the country.

Pakistan faces catastrophic economic repercussions because of the floods. There is an immediate impact on destroyed food crops, homes, roads, and livestock. This affects both people who are directly impacted by the flood by wiping out their household wealth, but also people in major cities through increasing the cost of food.

Pakistan faces a very difficult winter ahead as it needs money for a nationwide rebuilding effort post-floods, meeting the demands set up by the IMF program, competing with Europe to secure gas imports, and cushioning the impact of increasing food inflation.

Worst case scenario would be if Pakistan gets multiple kinds of floods it had this year plus the riverine flood together, the devastation would be unimaginable. Flood management strategies must be reoriented to become more robust and climate-smart.

There is a conflict between the urgent and long term plans. Those affected by the floods don’t have a roof over their heads and their standing crops have been destroyed. They need urgent help, and it is in the interest of the government to provide them that.

More often than not, building back better gets forgotten; meanwhile, some other crisis hits which diverts the policymakers’ attention.

In Pakistan, if someone becomes homeless due to floods, the government says, ‘take 15,000 rupees and rebuild’. But the house will be destroyed next year again due to floods as it’s in the same fragile areas. The government should enforce rules and make cash reimbursement conditional with living in safe zones.

There is a need to create a balance between relief and rehabilitation. Pakistan needs guidelines that will help mud houses become stronger, and help their roofs withstand climate change instead of collapsing. Whether plazas, or houses in rural areas and shanty towns, there is a need to have a standard for building them. For infrastructure the country needs guidelines that respond to the growing need to deal with floods and disasters.

So far, we have not increased our adaptation, and as a result have not reduced our vulnerability to floods and other disasters. At the heart of it, we are a climate-vulnerable country, and we desperately need adaptation strategies to avoid this level of loss and damage.