Tuesday, 22 October 2024

Mari Petroleum Company Results Review

Mari Petroleum Company (MARI) held its corporate briefing to discuss FY24 result and future outlook of the company. The key takeaways are:

MARI achieved highest-ever hydrocarbon sales of 39 MMBOE up 18%YoY in FY24.

MARI’s 2C resources increased from 106 MMBOE in FY23 to 112 MMBOE in FY24. Similarly, 2P reserves increased from 577 MMBOE in FY23 to 704 MMBOE in FY24. Ghazij, Shawal, and HRL were the key contributors to the reserves/ resource additions.

MARI’s Reserves to Production (R/P) life is 17 years.

MARI spudded/ delivered a total of 12 wells in FY24, comprising of four exploratory wells (Maiwand X-1, Bolan West-1, Spinwam-1, and Shawal-1); five appraisal wells (4 Ghazij wells (Ghazij-2, 3, 4, & 5) and one Shewa-2; two development wells (Mari-124 and MD-20); and one water disposal well, WDW-3.

The company has also planned drilling for this year, and the CAPEX will be similar to last year.

Phase 1 of the HRL Pressure Enhancement Facilities/ Debottlenecking Project is near completion, with 17 loops completed and 3 loops in progress. Work on the compression stations is also in progress.

Regarding Enhancement Pressure Facilities (EPF) management highlighted that work on SNGPL pipeline has been completed. Pipeline Hydro testing of the remaining section is under process. The commencement of production will depend on the security situation and local dynamics. The expected production will be 70 MMSCFD.

Management highlighted that Mari D&P lease has been renewed for five years until November 2029 with an additional recurring 15% payment of wellhead value.

Mari Mining Company (a wholly owned subsidiary of MARI) was incorporated in July 2023. Currently, MARI holds three mining licenses in Chagai district of Balochistan (MPCL 1, MMC 2).

MARI has also incorporated Mari Technologies Limited, a wholly owned subsidiary company, focusing on Data Centre, Cloud Computing, Artificial Intelligence and other Petroleum and Mining related Technologies.

The management informed that they will sell the bonus shares at market price, and any difference from the price of PKR448.7/ share will be adjusted from the extra 10% shares of the shareholders held by the company.

The key focus of the company would be: 1) the safe startup of Shewa Early Production Facilities, 2) preparation and execution of Ghazij and Shewa FDPs, 3) completion of offshore evaluation and readiness for the bid round, 4) work streams on carbon capture and green hydrogen, 5) diversification in mining and technologies, and 6) building on technical excellence and enhancing employee experience.

 

Sunday, 20 October 2024

China cuts key mortgage rate

According to South China Morning Post, China announced on Monday it had slashed a key reference rate for mortgage loans by a quarter of a percentage point, as the country stepped up efforts to stabilize the property market.

The benchmark five-year loan prime rate (LPR) was lowered to 3.6% from 3.85%, while the one-year lending rate was also cut to 3.1% from 3.35%.

For Chinese households with mortgage loans of 1 million yuan (US$140,000), the monthly instalment payment would be reduced by around 141.5 yuan (US$19.9) after the cut to the five-year LPR.

The move was expected as central bank governor Pan Gongsheng had said at a financial forum on Friday that lending rates would decrease by between 20 to 25 basis points.

The rates were last cut in July.

“The rate cut is broadly in line with market expectations,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

“It is an encouraging sign that the monetary policy is moving in the right direction to fight deflation.”

The move came as Beijing has taken an all-out effort to drive up the struggling property market.

Speaking at a press conference on Thursday, the housing ministry said it would double the credit to white list property projects to 4 trillion yuan by the end of the year and renovate 1 million units in urban villages.

“The monetary policy has clearly shifted to a more supportive stance since the press conference on September 24. The real interest rate in China is too high,” Zhang added.

Analysts expected more rate cuts in the coming quarters, after Pan indicated on Friday plans to further cut the reserve requirement ratio – the amount of cash that commercial banks must hold as reserve – for banks.

“But this is unlikely to boost loan demand much,” said Huang Zichun, an economist at Capital Economics, who noted weak credit demand as the main constraint.

“And without a rebound in inflation, which we don’t foresee, real lending rates will remain restrictive unless policy rates are cut by a lot more.

“The heavy lifting will need to come from fiscal policy.”

 

Prabowo sworn in as Indonesian president

Prabowo Subianto was inaugurated on Sunday as Indonesia’s eighth president, succeeding Joko Widodo, who served for a decade. In his inaugural address, he pledged to be the "leader of all Indonesians."

The inauguration ceremony took place in Jakarta and was attended by various foreign dignitaries.

Having served as defense minister in Jokowi's Cabinet, Prabowo was elected in February after winning a landslide victory.

Following the ceremony, the 73-year-old president proceeded to the presidential palace, where he received a warm welcome from the outgoing president.

In an emotional speech, Prabowo emphasized his commitment to unity among Indonesians, regardless of political affiliations, and vowed to advocate for the protection and welfare of the nation’s most vulnerable groups.

He highlighted national unity and food security as the primary focuses of his administration and promised that Indonesia’s natural resources would be managed for the benefit of all citizens.

He also committed to continuing the policies of his predecessor, including the industrialization of mining commodities and the ban on exporting raw minerals and ores.

"We will carry out this oath to the best of our ability and with accountability, prioritizing all the people, including those who did not vote for us," Prabowo stated.

His running mate, 37-year-old Gibran Rakabuming Raka, the son of Jokowi, was also sworn in as vice president.

Saturday, 19 October 2024

Drone strikes Netanyahu’s residence

According to media reports, a drone launched from Lebanon struck the residence of Israeli Prime Minister Benjamin Netanyahu in Caesarea on Saturday.

The Netanyahu's office confirmed in a statement that the drone was aimed at Netanyahu's private home, but noted that the premier and his family were not present at the time of the attack.

Earlier, the Israeli army reported that three drones were fired from Lebanon, with two successfully intercepted and the third crashing into a building in Caesarea. Fortunately, there were no reported casualties from the incident.

This drone attack occurs amid ongoing cross-border hostilities between Israeli forces and Hezbollah, which have intensified since the Gaza conflict began last October.

Israel has escalated its offensive in Lebanon, resulting in significant casualties, including the deaths of Hezbollah leader Hassan Nasrallah and several other commanders.

The extensive airstrikes, followed by a ground invasion, have claimed over 1,500 lives and displaced approximately 1.2 million people.

Friday, 18 October 2024

PSX witnesses 16.5%WoW decline in average daily trading volume

Pakistan Stock Exchange (PSX) remained volatile during the week, with the benchmark index losing 233 points or 0.3WoW to close at 85,250 points on Friday, October 18, 2024.

Commercial Banks and Power sectors were the primary drags on the index, as concerns over additional ADR-based taxation to weigh on banks’ expected profitability for the last quarter, while continued government scrutiny on IPPs added pressure to the Power sector.

Fertilizer sector also remained laggard due to lower than expected payouts by EFERT.

On the political front, the successful conclusion of the SCO summit was a positive development. However, heightened political noise towards the weekend kept market sentiments subdued.

Textiles and food exports remained elevated.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) crossed the US$11 billion mark for the first time in last two and half years, as of October 11, 2024.

In the T-Bills auction held on Wednesday, GoP raised PKR716 billion as against a target of PKR400 billion, with 3 and 6 month yields falling to 15.3% and 14.3%, respectively.

In its recent fortnightly review, GoP hiked diesel prices by PKR5/litre, while keeping petrol prices unchanged.

Market participation plunged by 16.5%WoW, with average daily traded volume dropping to 432 million shares from 518 million shares in the earlier week.

On the currency front, the PKR remained largely stable against the greenback, closing the week at PKR277.6 to a greenback.

Other major news flows during the week included: 1) GoP pays off PKR1.2 trillion domestic debt in first quarter of the current financial year, 2) Roshan Digital Accounts surpass US$8.749 billion in remittances, 3) LSM output rises by 4.68MoM in August, and 4) Urea off takes decline by 35YoY in September.

Tobacco, Close-end Mutual Funds, and Engineering were amongst the top performing sectors. Woollen, Property, and Transport were amongst the worst performers.

Major selling was led by Banks, with a total outflow of US$16.6 million, primarily due to NBP offloading its entire stake in AGL to FFC. Foreigner followed with net sell of US$11.1 million.

Companies absorbed most of the selling with a net buy of US$25.8 million.

Top performing scrips of the week were: ATRL, PAKT, HGFA, FCEPL, and JDWS, while laggards included: NPL, JVDC, BNWM, KAPCO, and PIOC.

Market is expected to remain positive going forward, supported by declining interest rates, anticipated to continue channeling investment flows into equities.

Additionally, with the ongoing earnings season, corporate results would stay in focus.

Despite the recent upward trend, the market remains attractively valued, currently trading at a P/E of 3.7x with a dividend yield of 11.9%.

AKD Securities proposes focusing on sectors that are likely to benefit from monetary easing and structural reforms, particularly high dividend yield stocks, likely to re-rate as yields converge with fixed income returns. Top picks include, OGDC, PPL, MCB, UBL, MEBL, FFC, PSO, LUCK, MLCF, FCCL and INDU.

 

Join Sanders to stop weapons sale to Israel

In the United States, Senator Bernie Sanders has introduced a congressional resolution to stop US$20 billion in weapons sales to Israel to stop the United States patronizing genocide in Gaza by Israel.

 According to sanders, “Much of this carnage in Gaza has been carried out with US-provided military equipment.”

He added, “Providing more offensive weapons to continue this disastrous war would violate US and international law.”

As long as bombs and other weapons are being supplied to Israel, the US administration is supporting the genocide in Gaza and the killing of over 42,000 Palestinian civilians.

Not only the members of Congress must join with Sanders people from around the world must demand halt to weapons sales to Israel and end to the genocide.

The measure led by Sanders could help in halting sales of missile systems, tank rounds, and other weapons, including munitions, causing the worst destruction in Gaza. 

What after Sinwar assassination?

The killing of Hamas leader Yahya Sinwar is raising new questions over the course of the war and the fate of hostages still held by Hamas. While the United States is pressing both the sides to seize the opportunity to end the fighting, Israeli Prime Minister Benjamin Netanyahu seems adamant at continuing the genocide.

Sinwar was considered the main obstacle in achieving a cease-fire and hostage deal over the course of a year of negotiations, Netanyahu has also been criticized as moving the goal posts in talks and prioritizing the military operation to eliminate Hamas over diplomacy to release hostages. 

US President Biden and Vice President Kamala the Democratic presidential nominee, said in reaction to Sinwar’s killing that there is now an opportunity for a “day after” in Gaza without Hamas in power.

“This moment gives us an opportunity to finally end the war in Gaza, and it must end such that Israel is secure, the hostages are released, the suffering in Gaza ends, and the Palestinian people can realize their right to dignity, security, freedom and self-determination,” Kamala said in remarks from Wisconsin. 

Netanyahu, in a recorded speech confirming Sinwar’s death, showed no signs of letting up Israel’s military operations, which have succeeded in devastating Hamas’s leadership and military capabilities, while also devastating the Strip, causing a mass humanitarian crisis, and resulting in the deaths of tens of thousands of Palestinians. 

“Now it is clear to everyone in Israel and the world why we insisted on not ending the war, why we persisted in the face of all pressure,” Netanyahu said. 

“The war is not over yet and it is hard and it is exacting a heavy price from us. Citizens of Israel, we are in the war of resurrection, great challenges are still ahead of us … together we will fight and with God’s help together we will win.”

In his remarks, Netanyahu said Israel would give amnesty to anyone who willingly releases remaining hostages — Hamas or other armed groups in Gaza like Palestinian Islamic Jihad and civilian families.

“I call on everyone who holds our hostages: Whoever lays down his weapon and returns our hostages — we will allow him to go out and live.”

He added that the return of hostages would bring “the end of the war closer.” 

Biden congratulated Netanyahu on the killing in a call from Air Force One as he traveled to Germany.

The White House said the two leaders agreed there is an opportunity to advance the release of the hostages “and to bring the war to a close with Israel’s security assured and Hamas never again able to control Gaza.”

Netanyahu’s office, in their description of the call, did not address ending the war, but focused on advancing the release of hostages.  

US Secretary of State Antony Blinken made calls Thursday to his counterparts in Qatar and Saudi Arabia as part of the administration’s push to “redouble its efforts” to end the conflict and secure the release of hostages, the State Department said. 

Now there’s a question, who will speak for Hamas? Khaled Meshaal, a senior Palestinian political official in exile in Qatar, is one name being raised as a possible replacement.

In an interview marking one year since Hamas’s attack, Meshaal said the armed group will “rise like a phoenix” even if its military and leadership are devastated. 

“We don’t know who will be on the other end of the negotiating table now, but it certainly won’t be Sinwar,” State Department spokesperson Matthew Miller said.

Even Netanyahu’s opponents in Israel are signaling support for continuing the war against Hamas and an ongoing Israeli military presence in the Strip. 

Benny Gantz, chair of the National Unity Party who resigned from Netanyahu’s wartime Cabinet, said in a statement that the Israeli military “will have to continue operating in Gaza for years,” although he added that “this moment must be seized and leveraged to bring the hostages home and topple the Hamas regime.” 

“Sinwar, who was described as a major obstacle to a deal, is no longer alive. It is critical that all attention is now focused on achieving the goal of a deal which will secure the release of our son Omer and the rest of the hostages,” the Neutras said in a statement. 

“We’re calling on the Israeli government and the US administration to act swiftly and do whatever is needed to reach a deal with the captors. We are at an inflection point where the goals set for the war with Gaza have been achieved, all but the release of the hostages.”

Members of the US Congress also reacted to Sinwar’s death with support for the revival of cease-fire and hostage release talks. 

“It is my hope that Sinwar’s elimination will result in further progress toward the release of all hostages still held in Gaza, as well as to a cease-fire for Palestinians who have suffered under Hamas’s grip for far too long,” said Rep. Mike Turner (R-Ohio), chair of the House Permanent Select Committee on Intelligence. 

Rep. Brad Sherman (D-Calif.), a member of the House Foreign Affairs Committee, said he hopes Sinwar’s death “marks a turning point in this war.” 

“Let us all unite in praying that, at last, the door will open to the end of this terrible war, the remaining hostages will be released, the recovery in Gaza will begin, and the efforts toward securing peace will be renewed.”