Pakistan Stock Exchange average daily trading volume posts 24.1%WoW decline

The benchmark index of Pakistan Stock Exchange closed the week ended on April 13, 2023 with a dip of 0.47%WoW. Despite Pakistan’s completion of all prior actions, the resumption of the IMF program is still awaited. According to news sources, the pain point between Pakistan and the IMF of late is commitments from friendly countries.

Furthermore, the circular debt of power sector increased by PKR419 billion during 8MFY23, taking the total circular debt to PKR2.67 trillion despite increasing electricity tariffs.

With the interest rates at 21% and uncertainties regarding the country’s economic position, participation remained lackluster during the week, with daily volumes averaging at 83 million shares during the week, as compared to 110.18 million shares in the prior week depicting a decline of 24.1%WoW.

Other major news flows during the week included; 1) IMF drastically cuts Pakistan’s FY23 growth forecast to 0.5%, 2) IMF projects fall in GoP gross debt to 73.6% of GDP, 3), March workers’ remittances hit 7-month high of US$2.5 billion, 4) RDA inflows cross US$6 billion mark, 5) SBP raises via auction for PIBs, and 6) Banks’ deposits increase by 15% YoY to PKR23.56 trillion.

The top performing sectors were: Commercial Banks, Technology and Communication, and Closed-End Mutual funds, while the least favorite sectors were: Vanaspati & Allied industries, Textile Weaving, and Tobacco.

Top performing scrips were: FABL, LOTCHEM, KOHC, SCBPL, and MUGHAL, while laggards included PSEL, EPCL, GLAXO, AIRLINK, and PAKT.

Flow wise, individuals were the major buyers with net buy of US$0.21 million, while companies were major sellers, with a net sell of US$0.35 million.

Any news flow regarding materialization of the commitments from friendly countries will put the IMF program back on track and will support the market sentiment.

According to recent news flow, Pakistan is likely to receive US$ one billion financing commitment from UAE. NEPRA has approved positive tariff adjustment of 47 paisas to recover PKR15.45 billion from customers during 2QFY23 under QTA—likely to keep the circular debt in check.

With this backdrop, the market is expected to remain range bound, with any news regarding the IMF program, including an Staff Level Agreement, would lead to a euphoric move in the market.

Saudi Arabia breaking away from the US orbit

The geopolitics of oil has been upended in just three years, with the emergence of a Saudi Arabia-Russia link that has the potential to cause a raft of problems for the US economy.

This month’s OPEC Plus decision to cut crude output — for the second time since US President Joe Biden flew to Saudi Arabia last summer seeking a boost — may be just the start, says Ziad Daoud and Courtney McBride report.

The April 02 announcement lifted oil prices by about US$5 a barrel and crude on Wednesday went on to hit the highest closing price this year. It was already clear last week that recession risks were bigger than they otherwise would have been — because consumers spending more on energy will have less cash left for other stuff — and inflation would be higher. 

But even more significant is what the OPEC Plus move says about the likely path of oil prices over the coming years. The bigger takeaway is that Saudi Arabia is breaking away from Washington’s orbit.

Saudi Arabia sets oil production levels in coordination with Russia. And there’s a newly tight relationship with the other giant US strategic rival — China. That was on display when Beijing brokered a deal to ease tensions with the Saudis’ regional rival, Iran, with the US out of the loop.

In other words, Western influence over the oil cartel is at its lowest point in decades. Most analysts now anticipate that crude prices will average above US$80 a barrel over the coming years — well above the US$58 seen over the 2015-21 period.

For the global economy writ large, lower oil supply and higher prices is bad news. The major exporters are the big winners, of course. For importers, like most European countries, more expensive energy is a double blow — dragging on growth even as inflation rises.

The US falls somewhere in between. As a major producer, it benefits when prices rise. But those gains — unlike the pain of higher pump prices — aren’t widely shared.

 

Ukraine asks Pentagon for fighter jets

Ukrainian Prime Minister Denys Shmyhal on Wednesday directly appealed to Defense Secretary Lloyd Austin for US fighter jets and longer-range missiles in its fight against Russia, echoing the country’s repeated calls for modern weaponry.

“We will win this war,” Shmyhal said at the top of a meeting between the two at the Pentagon. “But to achieve it faster and with fewer casualties, Ukraine still needs intensive military support — more air defense systems that minimize the impact of Russian airstrikes, more heavy artillery, mortars and ammunition for them. We also ask you for reconsider the possibility of providing Ukraine with longer range missiles.” 

Austin, while not commenting on the request, committed to investing in the US defense industrial base to further ramp up production for weapons sent to Ukraine. 

Ukraine since the start of Russia’s invasion a little more than a year ago has pressed the United States and NATO for advanced fighter jets to protect the country’s skies. 

While some NATO states including Slovakia and Poland have agreed to send Soviet-era MiG-29 fighter jets to Ukraine, Western countries have so far held off on sending the more advanced F-15 and F-16 fighters Kyiv is asking for.  

The Biden administration has not been swayed by Slovakia and Poland’s pledges to send its own jets, saying that the choice is a “sovereign decision.” 

Kyiv has also asked for longer-range missile systems in the fight, though the US government has held off on supplying such weapons over concerns Ukraine may use them to strike targets within Russia, which is against US policy.  

At Wednesday’s gathering, which marked the second Pentagon meeting between Austin and Shmyhal, the Ukrainian official thanked Washington for its significant military support, including sending Abrams tanks and Bradley and Stryker infantry fighting vehicles, according to a readout of the meet up. 

But he also asked Austin for more heavy equipment and aircraft.  

“In modern warfare, air superiority is crucial,” Shmyhal said. “That is why Ukraine is initiating the building of a new, so-called fighter jet coalition. And we are inviting the United States to become its most important participant. America can once again demonstrate its leadership by providing Ukraine with F-15 or F-16 aircraft.” 

Austin, in turn, thanked Ukraine for making sure US lethal aid already provided is accounted for. 

 

Jeddah Talks: Comprehensive settlement of Syrian crisis and its return to Arab fold

Signaling that Syria’s decade-long regional isolation is nearing an end, Damascus agreed with Saudi Arabia on Wednesday to initiate the necessary steps to achieve a comprehensive political settlement of the Syrian crisis, reports Saudi Gazette.

In a joint statement issued at the end of the official talks between Saudi Minister of Foreign Affairs Prince Faisal bin Farhan and Syrian Minister of Foreign Affairs and Expatriates Dr. Faisal Mekdad in Jeddah on Wednesday, the two countries decided to secure humanitarian aid access to all Syrian territories.

Mekdad arrived in response to an invitation extended by Prince Faisal bin Farhan. It is the first visit by a senior Syrian diplomat to the Kingdom in more than a decade, following a recent agreement between Riyadh and Damascus to re-establish bilateral ties and reopen their embassies.

The foreign ministers’ talks focused on adopting the measures to be taken to realize comprehensive settlement of the Syrian crisis that would end all its repercussions, achieve national reconciliation, and contribute to the return of Syria to its Arab fold, apart from the resumption of Syria’s natural role in the Arab world.

During the talks, the two sides discussed the efforts exerted to reach a political solution to the Syrian crisis that preserves Syria’s unity, security, stability, Arab identity, and territorial integrity, in a way that promotes the welfare and prosperity of the Syrian people.

According to the statement, Saudi Arabia and Syria agreed on the importance of resolving humanitarian difficulties and providing a suitable environment for aid to reach all areas in Syria. They also agreed to create the necessary conditions for the return of Syrian refugees and displaced persons to their areas, ending their suffering and enabling them to return safely to their homeland, and taking further measures that would contribute to stabilizing the situation in the entire Syrian territories.

The two sides stressed the importance of strengthening security and combating terrorism in all its forms and organizations. The two countries also underlined the need to enhance cooperation in combating drug smuggling and trafficking, and the need to support the Syrian state institutions, to extend their control over its lands to end the presence of armed militias as well as the foreign interference in the internal affairs of Syria.

Saudi Arabia and Syria welcomed the start of procedures for the resumption of consular and diplomatic services and flights between the two countries.

On his part, the Syrian Foreign Minister Mekdad appreciated the efforts made by Saudi Arabia to end the Syrian crisis, and its provision of humanitarian and relief aid to those affected by the devastating earthquakes that struck Syria in February this year.

Russia starts fuel supplies to Iran by rail

According to a Reuters report, Russia has started fuel exports to Iran by rail this year for the first time after traditional buyers shunned trade with Moscow.

Russia and Iran, both under Western sanctions, are forging closer ties in order to support their economies and to undermine Western sanctions which both Moscow and Tehran cast as unjustified.

Western sanctions on Russian oil products over what Moscow calls its special military operation in Ukraine have reshaped global fuel markets with tankers taking longer routes and suppliers choosing exotic destinations and ways of transportation.

Iran has been under Western sanctions for decades with limited access to global markets.

Last autumn Russia's Deputy Prime Minister Alexander Novak announced the start of swap supplies of oil products with Iran, but actual shipments only started this year, Reuters sources said.

In February and March Russia supplied up to 30,000 tons of gasoline and diesel to Iran, two sources familiar with the export data told Reuters. A third source confirmed the trade but was not able to confirm the volumes.

All the volumes were supplied by rail from Russia via Kazakhstan and Turkmenistan. One of the sources said that some gasoline cargoes were sent on from Iran to neighbouring states, including Iraq, by truck.

Iran is an oil producer and has its own refineries, but recently its consumption had exceeded domestic fuel production, especially in its northern provinces, a trader in Central Asian oil products market said.

Russia had supplied small volumes of fuel to Iran by tanker via the Caspian Sea, as was the case in 2018, two traders familiar with the matter said.

Russian oil companies are currently interested in exporting diesel and gasoline to Iran by rail as exports by sea face high freight rates and a price cap imposed by the G7 countries.

However the rail exports face bottlenecks along the route, the sources said.

"We expect fuel supplies to Iran to rise this year, but we already see several issues with logistics due to rail congestion. That may keep exports from booming," one of the sources familiar with supplies to Iran said.

 

Saudi Arabia: What is the secret behind coolness of Mataf in Makkah?

For anyone who has performed the Umrah or Hajj pilgrimages, they will have probably noticed the coolness under foot when they stepped onto the marble floors of the Mataf within the Grand Mosque. Many have debated the reason behind the cold feeling, despite the intense heat that may reach 50 degrees Celsius in the summer. 

Some may think that there are air conditioners under the floor, and this information is incorrect.

The General Presidency for the Affairs of the Two Holy Mosques says that the main reason was the type of Thassos marble used at Mataf, which may be the largest surficial marble application in the world.

During the reign of King Khalid, he ordered the expansion of Mataf in the year 1398 AH, and its floor was furnished with Thassos marble for the first time. This marble reflects the sun’s rays, and in turn, the heat too during the daytime.

According to the presidency, the characteristics of the coolness of the floors have attributed to the quality of the marble used in the Grand Mosque. It is noteworthy that Saudi Arabia has been importing, for decades, the famous Greek Thassos marble because it reflects light and heat, which no other type of granite and marble does.

Thassos marble is the most white and rare marble in the world and its grain is of small size. It receives its name from the Greek Island Thassos located in the Aegen Sea, from where it has been extracted since ancient times. The Greeks were among the first peoples to discover marble and to develop its uses throughout the ages.

This marble is distinguished from others by its crystal white color, and it is one of the purest and most solid natural stones. The thickness of the marble used at the Grand Mosque reaches five centimeters. It is also distinguished by the fact that it absorbs moisture through minute pores during the night, and during the day it excretes what it absorbed at night, which makes it always cool even in high temperatures.

This material has been described as the heat-dissipating smart marble where its high whiteness purity was attributed to the stone’s dolomite-rich crystal formation. This mineral’s 2 mm crystal sheet configuration was then linked with two important factors, including that of minimal porosity and an increased thermal conductivity which would both help to maintain its cooler temperature.

Saudi Arabia imports this marble in the form of huge rock pieces, and they are processed in private Saudi factories and under the supervision of qualified technical cadres to cut these pieces into tiles of certain sizes and with special standards.

Courtesy: Saudi Gazette

 

Bangladesh: PM Hasina slams United States

Prime Minister Sheikh Hasina on Monday called the country’s leading national daily an enemy of the people and claimed Washington was working to bring an undemocratic party to power in Bangladesh in the upcoming election.

The unusually strong remarks to Bangladesh’s parliament came on the same day US Secretary of State Antony Blinken was hosting Dhaka’s top diplomat, A. K. Abdul Momen, at the Department of State in Washington.

While speaking in parliament, Hasina, leader of the Awami League party, did not name which so-called undemocratic party she believed the United States wanted in power.

“America can change power in any country it wants. [They] want to bring such a government here which will not have any democratic existence,” she said.

Hasina also accused Washington of supporting corrupt people in Bangladesh.

“[The US] is speaking against corruption. Now it can be seen that it is advocating on behalf of those convicted in corruption case[s],” she said.

Again, Hasina did not name which people, although the main opposition Bangladesh Nationalist Party (BNP) chairwoman Khaleda Zia has been convicted in two graft cases. An ailing Khaleda’s prison term has been suspended since the COVID-19 pandemic.

The US has in recent months urged Bangladesh to ensure free and fair elections, amid reports of the government muzzling critics and the opposition. The election is scheduled for December 2023 or January 2024.

US Secretary of State Antony Blinken in a statement congratulating Bangladesh on its Independence Day also urged a commitment to democratic norms and human rights. Some observers said this was unusual for a communiqué of this kind.

On Monday, the top US top diplomat again referenced the Bangladesh elections.

He told his Bangladesh counterpart Momen that Washington was committed to continuing to work together, to find ways to strengthen and deepen the relationship, to address as well economic development and human rights.

“And of course, we’re looking – the world is looking – to Bangladesh for its next elections, to make sure that they set a strong example for free and fair elections for the region and for the world,” Blinken said, according to a State Department statement on remarks exchanged by the two diplomats before their meeting in Washington.

For his part, Momen said that Bangladesh had sacrificed millions of lives for independence, for upholding democracy, human rights, justice, and human dignity.

Former Bangladesh diplomat M. Humayun Kabir, who has served as envoy to the United States, told BenarNews that Hasina’s comments show there could be a communication gap between the two countries.

“The remarks of Prime Minister Sheikh Hasina made it clear that there is a huge gap of understanding between Washington and Dhaka,” he said.

“But this is not a proper time to say anything about the ultimate relations between the nations; I think we need to observe it more closely.”

Hasina also slammed a leading Bangla daily news organization. “Prothom Alo is an enemy of the Awami League, Prothom Alo is an enemy of democracy and Prothom Alo is an enemy of the country’s people,” she said.

The daily was last month hit with two cases under the draconian Digital Security Act, for allegedly “undermining the country’s independence.”

A correspondent for the daily was arrested – and later released on bail – for his report which quoted a daily laborer as saying, “We need independence guaranteeing fish, meat and rice.”

The daily’s editor was also slapped with charges under the act for the report which was published on Bangladesh’s Independence Day.

Prothom Alo Executive Editor Sajjad Sharif told BenarNews that the daily had little to say about the PM’s remarks.

“[We] are doing our journalism maintaining all professional ethics. We have no favor or conflict with any political parties,” he said.

Hours after Hasina’s comment four people entered the office building of the news outlet shouting “Boycott Prothom Alo.” The building’s security guard, Mesbaul Haque, told BenarNews no police complaint was registered as Prothom Alo dismissed it as a “small incident.”

Hasina’s targets on Monday also included 2006 Nobel Peace Prize winner and Grameen Bank Founder Muhammad Yunus, who is often openly vilified by her government.

He [Yunus] is a very favorite person of the US. The country never raised the question of how this person, who was the managing director of Grameen Bank … got millions of dollars,” she said.

“Did they [the US] ever want to know from where the managing director, who used to draw a salary from the government, got millions of dollars? They didn’t.”

Yunus and some of his colleagues from Grameen Telecom, a company he founded, are being investigated by Bangladesh’s anti-graft agency for alleged involvement in laundering money to the tune of US US$300 million (31.8 billion taka), and embezzling from the employees’ welfare fund.

Last month, 40 global public figures, including rock singer Bono and former US Secretary of State Hillary Rodham Clinton, had urged Bangladesh to stop harassing the Nobel laureate.

In an open letter, they said Yunus had not benefited financially from his involvement in the company.

“Rather, he has devoted himself to the poverty-fighting missions of the many organizations he has established and lives modestly in Dhaka,” the letter said.

Courtesy: The Bangladesh Chronicle