Pakistan Stock Exchange posts nominal gains

Pakistan Stock Exchange witnessed mixed momentum throughout the week ended on August 09, 2024 to close at 78,570 level with a nominal 0.4%WoW gain.

According to a report by AKD Securities, the week began on a turbulent note, primarily due to concerns about global markets following Japan's interest rate hike. However, a rebound in the E&P sector, spurred by a surprising payout from MARI, revitalizing market sentiment in the last two sessions.

Investors’ confidence was further strengthened by debt rollover commitments during the week, aligning with IMF prerequisites ahead of the Executive Board meeting expected later this month.

Additionally, T-Bill yields dropped in the latest auction on Wednesday, signaling investor anticipation of rapid rate cuts in upcoming Monetary Policy Committee (MPC) meetings. This decline in T-Bill yields consequently led to KIBOR rates hitting 18-month low.

On the macroeconomic front, remittances for July 2024 were reported at US$3.0 billion, up 45%YoY, cementing a positive outlook for the current account balance for the ongoing year.

The energy sector remained a focal point of public discourse amid rising power prices, prompting the government to establish a task force on energy and announce plans to retire/ gradually phase out 15 IPPs.

The ECC directed the relevant ministry to formulate a fertilizer policy to address concerns over production, pricing, and the provision of gas, which might result in unify gas prices across the industry.

Despite initial volatility in market, participation surged by 38%WoW, with the average daily traded volume rising to 493 million shares, from 358 million shares a week ago.

On the currency front, PKR largely remained stable against the greenback, closing the week at PKR278.55 to a US$.

Other major news flows during the week included: 1) Cement sales declined by 7% due to slow down of economic activity, 2) SBP forex reserves rose by US$51 million to US$9.15 billion, 3) SIFC was hopeful of foreign investments once IMF deal was done, and 4) GoP hiked GST on tractors to 14%.

Woollen, Textile weaving, and Textile spinning were amongst the top performing sectors, while, Vanaspati & allied industries, Property, and Fertilizer were amongst the worst performers.

Major net selling was recorded by Mutual Funds with a net sell of US$6.0 million. Individuals absorbed most of the selling with a net buy of US$5.5 million.

Top performing scrips of the week were: YOUW, BNWM, MARI, SNGP and APL, while top laggards included: PIBTL, AKBL, BAHL, FFC and ATRL

Looking ahead, market is expected to continue positive momentum as global market concerns settle and macroeconomic indicators remain favorable. The anticipated IMF Executive Board approval during the month is likely to support the momentum.

Sectors benefiting from monetary easing and structural reforms would remain in the limelight. However, modest economic recovery would keep the upside in check for the cyclicals.

 

 

Pakistan not involved in ouster of Hasina

The Foreign Office (FO) on Friday rejected all statements emanating from India accusing Pakistan of being involved in the ouster of Bangladesh’s then-prime minister Sheikh Hasina, terming it New Delhi’s “disturbing obsession” with Islamabad.

The comments came after reports emerged from India blaming the Pakistan intelligence agencies for their involvement in the collapse of Bangladesh’s government.

The Bangladeshi military initially took over the country after a student-led protest forced the country’s Hasina to flee. Later, an interim government was formed with Bangladesh’s Nobel Peace Prize-winning economist Muhammad Yunus sworn in as its head.

Reacting to the Indian media reports, FO spokesperson Mumtaz Zahra Baloch, during a weekly press briefing in Islamabad today, rejected all such statements, stressing that Pakistan had no involvement in the events that took place in Bangladesh.

“These statements depict India’s disturbing obsession with Pakistan,” Baloch said in response to a question.

She said that Indian political ledgers and their media habitually blamed Pakistan for their failures in domestic and foreign policy.

The spokesperson added that Pakistan and Bangladesh had positive relations which had only continued to grow.

“The government and people of Pakistan have expressed their support and solidarity with the people of Bangladesh and we sincerely hope for a peaceful and swift return to normalcy,” said Baloch.

She went on to say that Pakistan was confident that the resilient spirit and unity of the Bangladeshi people would lead them towards a harmonious future.

The student-led movement that ousted Hasina grew out of protests against quotas in government jobs that spiraled in July, provoking a violent crackdown that drew global criticism, although the government denied using excessive force.

Hasina, 76, who had been in power since 2009, quit on Monday as hundreds of thousands of people flooded the streets of Dhaka. Jubilant crowds later stormed and looted her palace.

Monday’s events were the culmination of more than a month of unrest, which began as protests against a plan for quotas in government jobs but morphed into an anti-Hasina movement.

Hasina, who was accused of rigging the January elections and widespread human rights abuses, deployed security forces to quash the protests.

At least 455 people were killed in the unrest, according to an AFP tally based on police, government officials, and hospital doctors.

 

 

IPPs: Much Ado About Nothing

According to a research report by AKD Securities, authorities in Pakistan have decided to retire/ gradually phaseout 15 IPP contracts with immediate effect.

Planned terminations for the IPPs include the following: KAPCO, Kohinoor Energy, Gul Ahmed Energy, Liberty Power, Tapal Energy and Attock Gen Limited. 

Phased-out retirement for the IPPs includes the following: HUBCO Base, Lalpir Power, PakGen Power, Rousch Power, Fauji Kabirwala, Habibulla Coastal, Japan Power, Saba Power and Southern Electric.

The brokerage house is of the view that with many of these capacities already expired/ non-operational due to their fuel/ generational inefficiencies, authorities have focused on the low-hanging fruit by gradually terminating/ phasing these IPPs out.

It's important to note that these IPPs were part of the master-agreement amendments in 2020 as well, which led to a downward negotiation of their ROE components.

Four of the six IPPs planned for immediate retirement have their PPAs already expired, meaning they do not bill capacity payments to the power purchaser.  

Therefore, it is believed that this move will have minimal impact on the power purchase costs currently billed towards the CPPA-G.

However, early retirement of IPPs with remaining tenures may be settled with a payout of present value of capacity payments due for the remaining tenures.

 

 

US sending aircraft carrier to protect Israel

The US decision to redirect the USS Abraham Lincoln to the Middle East away from Asia leaves the West Pacific dangerously open until a newly refurbished aircraft carrier arrives in Japan later this year, according to Nikkei Asia. Defense Secretary Lloyd Austin recently ordered the USS Abraham Lincoln Carrier Strike Group, operating near Guam, to head to the Middle East to replace the USS Theodore Roosevelt.

This move came less than two months after Austin directed the Roosevelt, which also had been on a Pacific deployment, to replace the USS Dwight D. Eisenhower Carrier Strike Group in the Red Sea. The Roosevelt will return to the US, and the Eisenhower already has done so.

The Lincoln and the Roosevelt had been stationed in the Asia-Pacific to cover for the short-term absence of a Japan-based carrier.

Bryan McGrath, a retired surface warship officer and founding managing director of consultancy The FerryBridge Group, said the U.S. Navy's absence in the region reinforces to Chinese President Xi Jinping "the fact that the United States of America does not have enough naval power to cover its requirements."

Collin Koh, a senior fellow at the Institute of Defence and Strategic Studies in Singapore, said the Pentagon has concluded that "the situation in the Western Pacific is at least stabilizing for now."

Koh said this is based on South China Sea tensions winding down since China and the Philippines agreed to a provisional arrangement, and with Taiwan and the Korean Peninsula "while still tense, at least under control."

But if a full-scale armed conflict does break out in Asia, "US military power projection capabilities in the Western Pacific are expected to suffer from the absence of a carrier strike group," he said. "Land-based assets are useful, but they do lack the versatility offered by naval forces, and US Navy carrier strike groups constitute the linchpin of such assets."

The shift in military posture is intended to "increase support for the defense of Israel," deputy Pentagon press secretary Sabrina Singh said in a statement on Monday. Iran has vowed to retaliate after Hamas political chief Ismail Haniyeh was killed last week in Tehran.

Plans shared by the US Navy to Nikkei Asia confirmed that a "carrier gap" in the West Pacific was emerging. The USS Carl Vinson, which was assumed by security observers to move westward after being in Hawaii for the biennial Rim of the Pacific exercise, instead will head directly back to San Diego, a spokesperson said on Monday.

The next carrier to be deployed to the West Pacific will be the USS George Washington, when it arrives in Yokosuka, Japan, to be the forward-deployed carrier replacing the USS Ronald Reagan, the spokesperson said. The navy has previously said the George Washington is expected to arrive in the autumn. 

Haniyeh's assassination flagrant violation of Iranian sovereignty

Saudi Deputy Minister of Foreign Affairs Eng. Waleed Al-Khereiji said that the assassination of former Palestinian Prime Minister Ismail Haniyeh is a flagrant violation of the sovereignty, territorial integrity, and national security of Iran, as well as international law and the Charter of the United Nations.

“The assassination of Haniyeh during his visit to Tehran last week constitutes a threat to regional peace and security,” he said while attending, on behalf of Minister of Foreign Affairs Prince Faisal bin Farhan, the extraordinary meeting of the Executive Committee of the Organization of Islamic Cooperation (OIC) in Jeddah on Wednesday.

Al-Khereiji emphasized that the government of Custodian of the Two Holy Mosques King Salman is aware of the seriousness of the escalating situation in the Palestinian territories due to the blatant attacks and illegal practices of the Israeli occupation against the Palestinian people inside and outside the Palestinian territories, ignoring international charters and resolutions.

The deputy minister said that the government of Saudi Arabia, based on its firm positions towards the Palestinian cause, condemns the attacks carried out by the Israeli occupation forces on civilians and rejects any attack on the sovereignty of states or interference in the internal affairs of any state in accordance with international conventions and the OIC Charter.

Al-Khereiji expressed the Kingdom’s deep concern over the escalation of violations by the Israeli occupation army, which resulted in large numbers of martyrs and wounded among civilians in the Gaza Strip and the West Bank. He also voiced concern over the shortage of food, medicine, and fuel to the complete depletion of the health sectors under the pressure of the increasing numbers of patients as well as displaced civilians seeking shelter.

Al-Khereiji renewed the Kingdom’s call on the international community to take effective action to play its role in holding the Israeli occupation forces fully accountable for these crimes and violations and their negative consequences on the chances of reviving the peace process and in stopping the attacks and violations against the Palestinian people.

He also emphasized that the Kingdom supports all efforts aimed at ending the occupation of the Palestinian territories and reaching a comprehensive solution that enables the Palestinian people to establish their independent Palestinian state in accordance with international legitimacy resolutions and the Arab Peace Initiative.

 Courtesy:  Saudi Gazette

Iranian businesspersons active in UAE

The Ambassador of the United Arab Emirates (UAE) in Tehran said over 122,000 Iranian business persons are currently working in the UAE, IRNA reported.

“Economic figures show that Iran-UAE business interactions have increased in recent years, and more than 122,000 Iranian businessmen are doing business in the UAE,” Saif Mohammed al-Zaabi said in a meeting with Head of Iran Chamber of Cooperatives Bahman Abdollahi.

Pointing out that the problems of Iranian and Emirati businessmen and economic operators are not political but in the legal field, he admitted: “Cooperation between the two countries in the field of sea and air transport has also increased.”

Abdollahi for his part introduced some of the capabilities of the cooperative sector in Iran and said: “Cooperatives have an important and effective position in Iran and a significant part of the production in our country is done by cooperatives.”

The value of non-oil trade between Iran and the UAE was reported at US$8.064 billion during the first four months of the current Iranian calendar year, the head of the Islamic Republic of Iran Customs Administration (IRICA) announced.

Iran and the United Arab Emirates signed a memorandum of understanding (MoU) for expanding economic cooperation in a variety of areas at the end of the two countries’ 3rd Joint Economic Committee meeting in May this year.

The MoU was signed by Iranian Transport and Urban Development Minister Mehrdad Bazrpash and UAE’s Economy Minister Abdullah bin Touq Al Marri, who co-chaired the joint meeting.

During the mentioned committee meeting, the two sides stressed the need for further expansion of economic cooperation between Tehran and Abu Dhabi.

Speaking at the end of the meeting, Bazrpash said, “We have held the joint commission between the two countries after 10 years, which is an opportunity to develop the commercial and economic relations between the two countries.”

“The UAE, as Iran's second biggest trade partner, has great strategic importance for us,” the minister said.

Referring to the location of Iran and the UAE in the International North-South Transit Corridor (INSTC), Bazarpash said, “Access to the markets of the north and south can create an opportunity for the two countries to cooperate.”

In the end, the minister emphasized solving the banking and monetary problems between the two countries to facilitate bilateral trade relations.

Abdullah bin Touq Al Marri for his part underlined the importance of the meeting said, “Holding today's meeting shows the development and expansion of economic relations between the two countries. After China, the UAE has the largest amount of trade relations with Iran. The trade value of the two countries has reached US$27 billion and many Iranian companies are established in the UAE.”

“Creating new opportunities for transportation and banking cooperation is one of the achievements of this commission,” the official said.

Referring to the performance of the UAE government in the field of investment, the official said: “The approval of the law on the formation of foreign companies and the government’s support for companies that operate in the field of new energies has created a good opportunity for business with the UAE.”

The 3rd Iran-UAE Joint Economic Commission was held in Abu Dhabi from April 30 until May 1.

 

Hamas names Sinwar new leader

Hamas has named its Gaza leader Yahya Sinwar as chief of the group following Ismail Haniyeh's assassination in Tehran on July 31, the group said in a statement late on Tuesday, a move that reinforces the path pursued since October 07, 2023 attack on Israel.

According to Reuters, Sinwar, the architect of the most devastating attack on Israel in decades, has been in hiding in Gaza, defying Israeli attempts to kill him since the start of the war.

"The Islamic Resistance Movement Hamas announces the selection of Commander Yahya Sinwar as the head of the political bureau of the movement, succeeding the martyr Commander Ismail Haniyeh, may Allah have mercy on him," the movement said in a brief statement.

News of the appointment, which came as Israel braces for a likely attack from Iran following the killing of Haniyeh in Tehran, was greeted with a salvo of rockets from Gaza by the resistance group still fighting Israeli troops in the besieged enclave.

"The appointment means that Israel needs to face Sinwar over a solution to Gaza war," said a regional diplomat familiar with the talks brokered by Egypt and Qatar, which are aimed at bringing a halt to the fighting in Gaza and a return of 115 Israeli and foreign hostages still held in the enclave.

"It is a message of toughness and it is uncompromising."

Sinwar, who spent half his adult life in Israeli prisons, was the most powerful Hamas leader left alive following the assassination of Haniyeh, which has left the region on the brink of a wider regional conflict after Iran vowed harsh retaliation.

Israel's chief military spokesman, Rear Admiral Daniel Hagari, blamed Sinwar for the Oct 7 attack and said Israel would continue to pursue him.

"There is only one place for Yahya Sinwar, and it is beside Mohammed Deif and the rest of the Oct 7 terrorists," he told Al-Arabiya television, according to a statement released by the military. "That is the only place we're preparing and intending for him."

In a sign that the movement had united around the choice of Sinwar, Khaled Meshaal, a former leader who had been seen as a potential successor to Haniyeh, was said by senior sources in the movement to have backed Sinwar "in loyalty to Gaza and its people, who are waging the battle of the Flood of Al-Aqsa".

For Israel, the appointment confirms Hamas as a foe dedicated to its destruction and is likely to reinforce Prime Minister Benjamin Netanyahu's insistence that Israel must pursue its campaign in Gaza to the end.

The White House declined to comment on Sinwar's appointment. But a person familiar with Washington's thinking said the selection suggested that Hamas could toughen its position in ceasefire negotiations and make it harder to reach a deal.

Israel was already aware that even before his formal appointment Sinwar would have the final word on any agreement to halt the fighting, and the announcement merely set the seal on that.

Ten months since the surprise attack by thousands of Hamas-led fighters who swarmed into Israeli communities around the Gaza Strip in the early hours of the morning of Oct. 7, the war has turned the Middle East on its head and threatened to spiral into a wider regional conflict.

Some 1,200 Israelis and foreigners were killed and more than 250 taken hostage into Gaza. In response, Israel launched a relentless campaign that has so far killed almost 40,000 Palestinians and left the densely populated enclave in ruins.

Attempts at reaching a ceasefire that would give the exhausted population a respite and enable the hostages remaining in captivity to be brought home have foundered amid mutual recriminations from Hamas and Israel.

Hamas official Osama Hamdan told Al Jazeera that the movement remained committed to reaching a deal and the team that handled the negotiations under Haniyeh would continue under Sinwar, who he said was following the talks closely.

But Hani Al-Masri, a political analyst in Ramallah, said Sinwar's appointment to lead the movement overall was a direct challenge to Israel, and sent a message about Hamas' adherence to his "extremist and resistant approach".

"As Sinwar manages the negotiations, he will manage the movement," he said.