Condemnation of Israeli attack on Iran

It may not be wrong to say that Israel having killed thousands in Gaza and Lebanon is now attacking Iran directly with regular intervals. One can say with complete confidence that Israel is doing all this under the patronage of United States. It is worth noting that some of the Muslim countries have condemned Saturday’s attack on Iran, with the request to apply restraint.   

Saudi Arabia

Saudi Arabia has condemned Israel’s attacks on Iran as a violation of the country’s sovereignty and a violation of international laws and norms.

“The Kingdom affirms its firm position in its rejection of the continued escalation in the region and the expansion of the conflict that threatens the security and stability of the countries and peoples of the region,” the Saudi Foreign Ministry said in a statement.

Riyadh also urged all parties to “exercise the utmost restraint and reduce escalation”, warning of the ramifications of continuing military conflicts in the region.

Malaysia

Malaysia’s Foreign Ministry also released a statement in response to Israel’s overnight attacks, labelling the strikes a “clear violation of international law” that “seriously undermine regional security”.

“Malaysia calls for an immediate cessation of hostilities and an end to the cycle of violence,” the statement said.

The Foreign Ministry added that Israel’s continued attacks on countries in the Middle East is bringing the region closer to the brink of a wider war.

Iraq

Iraqi Shia cleric and head of National Wisdom Movement, Ammar Hakim, has strongly condemned recent Israeli attacks on Iranian cities, expressing solidarity with the Iranian people, their leadership, and government.

Hakim urged the international community to unite in countering the spread of Israeli influence, which he argued violates international charters and norms. He warned that Israel’s actions threaten to escalate conflicts, extending violence beyond Palestine and Lebanon into Syria, Iran, and other nations.

Hakim called on the United Nations and the Security Council to take decisive action to prevent Israel’s behavior from further destabilizing the region.

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Pakistan

Pakistan’s Prime Minister Muhammad Shehbaz Sharif stated on Saturday that Pakistan firmly condemns Israel's recent aggression against Iran and stands with Iran and its neighbors in their pursuit of peace.

He also called on all parties involved to exercise restraint to prevent further escalation. On his social media platform X, the prime minister posted, “Deeply concerned by the recent act of Israeli aggression against Iran. Such actions threaten regional peace and stability and violate sovereignty and international law.”

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Kuwait

Kuwait’s Ministry of Foreign Affairs has issued a strong condemnation of Israel’s recent military action against Iran, describing it as part of a broader policy aimed at destabilizing the region through violations of national sovereignty.

In a statement released Saturday, the ministry highlighted that Israel’s aggression against Iran exemplifies a disruptive approach that endangers the security of the entire region and disregards international laws and norms.

The ministry called on the international community and the UN Security Council to take responsibility in curbing these actions, which threaten the region’s future and the welfare of its people. It emphasized the importance of decisive steps to uphold regional security and stability, grounded in international laws and treaties.

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United Arab Emirates 

The UAE has strongly condemned Israel’s military strikes on Iran, and expressed its deep concern over the continued escalation and its repercussions on security and stability in the region.
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Oman

Oman’s Ministry of Foreign Affairs has condemned Israel’s recent attack on Iranian territory, calling it a blatant violation of Iran’s sovereignty and international law.

The ministry stated that Israel’s latest act of aggression attempted to target military sites in Tehran province early Saturday, but the assault reportedly failed to achieve its objectives. This incident, it noted, is part of a broader pattern of Israeli hostilities in the region.

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PSX benchmark index inches closer to 90,000

Pakistan Stock Exchange (PSX) witnessed bullish sentiments throughout the week ended on October 25, 2024. The benchmark KSE-100 index recorded its highest-ever closing, just shy of the 90,000 mark ‑ closing at 89,994 points, up by 5.6%WoW.

This marked the highest weekly return in 27 weeks and 47th highest weekly return since the index's inception.

More importantly, KSE30 index also reached all-time high at 28,395 points.

The week started with positive momentum buoyed by settlement of political noise following the passage of stalled 26th Constitutional Amendment.

The optimism consolidated with swing of corporate result announcements and favorable economic developments.

According to AKD Securities, the rally was broad-based, with 80 out of 100 companies delivering positive returns.

Leading sectors were Fertilizer, Cement, and Banks, primarily due to strong annual growth in results. On the macro front, current account posted a surplus for the second consecutive month at US$115 million for September 2024.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$18 million to US$11.0 billion as of October 18, 2024.

Market participation also improved significantly, with average daily traded volume rising by 23%WoW to 532 million shares from 432 million shares a week ago.

The PKR remained stable against the greenback, closing the week at 277.6 to a US$.

Other major news flows during the week included: IT exports surged 42%YoY in September 2024, 2) Banking sector deposits were up by 19%YoY to PKR31.3 trillion at end September 2024, 3) Sales tax on tractors hiked to 14% from 10%, 4) Loans to private sector were up 4.9% to PKR8.4 trillion at end September 2024, and 5) Nepra approves KE's generation tariff with key adjustments.

Cement, Refinery, and Mutual Funds were amongst the top performers, while Modarabas, Textile composites, and Vanaspati & allied industries were amongst the worst performers.

Major net selling was recorded by Foreigners with a net sell of US$16.4 million. Mutual Funds and other organizations absorbed most of the selling with a net buy of US$20.4 million.

Top performing scripts of the week were: KOHC,CHCC, AICL, KEL, and ATRL, while laggards included: ILP, PIBTL, LOTCHEM, IBFL, and NESTLE.

Market is expected to remain positive, with primary focus on the upcoming MPC meeting, where an anticipated rate cut could further bolster market momentum.

Despite the recent rally, valuations remain attractive, with the market trading at a P/E of 4.0x and offering a dividend yield of 11.2%.

AKD Securities recommends focusing on sectors that stand to benefit from monetary easing and structural reforms, particularly high-dividend-yield stocks that are 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.

 

Israel strikes military targets in Iran

Israel has launched direct airstrikes against Iran in a high-stakes retaliatory attack that brings the Middle East closer to a regional war.

The Israeli military said it had completed its air attack on Saturday morning, hitting missile manufacturing sites and aerial defences in several areas inside Iran. Israel’s public broadcaster said three waves of strikes had been completed.

Iranian air defences said Israel attacked military targets in the provinces of Tehran, Khuzestan and Ilam and that “limited damage” was caused to some locations.

A senior US official described the strikes as “extensive”, “precise” and against military targets across Iran. The US did not participate in the strikes, the official said, but worked with the Israeli government to encourage a low-risk attack with no civilian harm.

“The effect was a proportionate self-defence response. The effect is to deter future attacks and to degrade Iran’s abilities to launch future attacks.”

The official stressed that the US considered the operation to be an “end to the exchange of fire between Israel and Iran”.

“This should be the end of the direct military exchange between Israel and Iran – we had a direct exchange in April and that was closed off and now we’ve had this direct exchange again.”

At least seven explosions were reported over the capital, Tehran, and nearby Karaj as well as the eastern city of Mashhad just after 2.30am local time on Saturday, as Israeli jets struck military targets in the country.

Iranian media initially appeared to downplay the airstrikes, noting that Tehran’s airport was operating normally. State TV reported several strong explosions heard around the capital, while the state news agency, IRNA, said there had been no casualties. There was no immediate official comment about the source of explosions, which Iranian news outlets reported were under investigation. Air defence systems were activated around the country.

In a statement, the Israel Defense Forces (IDF) took the rare step of acknowledging the attack on Iran, in a confirmation that a decades-old shadow war between the enemy states has now firmly moved into the open.

Before Israel launched the airstrikes on Saturday, Iran had repeatedly warned there were “no red lines” for Iran on the issue of defending itself. Last week, the country’s foreign minister, Abbas Araghchi, also indirectly threatened US forces against operating in Israel after Washington dispatched a Thaad advanced missile defence system battery and 100 troops to aid its ally amid the tensions.

The White House was notified shortly before Israel carried out airstrikes on Iran, a spokesperson said. The US secretary of state, Antony Blinken, had said on Wednesday that Israel’s retaliation should not lead to greater escalation.

OGDC earnings up 8%QoQ

Oil & Gas Development Company (OGDC) has posted profit after tax of PKR41.0 billion (EPS: PKR9.54), up 8%QoQ for the first quarter, despite lower oil prices (Brent down 8%QoQ).

According to Inter-market Securities, the increase in profitability is attributable to absence of one-off provisions of PKR23 billion booked on TFCs coupled with lower operating cost. It also announced an interim dividend of PKR3.0/ share.

Key highlights from 1QFY25 result:    

Net revenues were down 8%QoQ to PKR106 billion, mainly due to lower oil prices coupled with estimated 4% decline in gas production.

Operating expenses reduced by 27%QoQ to PKR27 billion likely due to lower work-over expensed during the quarter.

Other income surged to PKR26 billion as compared to a loss of PKR3 billion, due to the absence of one-off provisions booked against clearance of TFC in the earlier quarter.

OGDC’s effective tax rate for the quarter rose to 51% during the quarter under review. 

Despite gas curtailment and lower oil prices, OGDC posted decent earnings. Earnings are expected to slightly improve on account of improving gas production.

On production front, the company in a JV with MARI is developing a high-potential asset Shewa in Waziristan block, which has potential reserves of 1.4tcf.

Moreover, the company’s own field Bettani (Wali) is expected to produce 3,000bpd of oil and 35mmcfd of gas, following the successful drilling of Bettani-2 and Bettani Deep-1.    

               

Russia-Iran use national currencies in trade

Iran and Russia have been using national currencies in more than 96% of their mutual payments, the Kremlin’s press service said on the verge of the meeting between presidents of the two countries to be held on the sidelines of the BRICS Summit in Kazan.

"The leadership of both countries pay priority attention to the development of trade and economic ties. Growth of mutual trade in 2023, despite a certain decline, totaled over US$4.0 billion.

We recorded growth of 12.4% as of the end of January - August. The share of national currencies in mutual payments ws over 96%," the press service informed.

Russia and Iran are implementing several large-scale mutual projects in the sphere of transport and energy, the Kremlin said. The North-South international transport corridor project is being developed. Russian-Iranian relations are on the rise, the press service noted.

According to the Islamic Republic of Iran Customs Administration (IRICA), the value of Iran’s non-oil exports to Russia rose 12% in the first six months of the current Iranian calendar year as compared to last year’s first half.

According to the IRICA data, Iran exported 1.3 million tons of commodities worth over US$494 million to Russia in the first half of the current Iranian year.

Non-oil exports to the Russian Federation also increased by 20% in terms of weight.

In the first half of the current Iranian year, foreign transit through Iran from Russia reached 526,000 tons with a growth of 17%, and foreign transit to Russia was 56,000 tons, which decreased by 18%.

The Islamic Republic had exported 2.2 million tons of commodities worth US$965 million to Russia in the previous Iranian calendar year, which also registered a 54% increase in weight and a 28% rise in value.

The main Iranian products exported to Russia in the previous year were fresh or dried pistachios, ordinary non-expandable polystyrene, fresh kiwi and synthetic fibers, and other types of polyester.

Iran and Russia have been taking serious steps to boost their mutual trade over the past few years.

In late January, Iran’s late President Ebrahim Raisi said that the Islamic Republic and Russia have reached an agreement to boost the trade between the two countries up to US$10 billion.

“We agreed to remove trade barriers and boost the economic exchanges between the two countries. Currently, the level of mutual trade is not acceptable, so the two countries agreed to increase trade to US$10 billion a year,” Raisi said on January 21, upon arrival to Tehran after a two-day visit to Moscow.

He also noted that the two sides also discussed monetary and banking issues during his talks with Russian officials.

The two countries also agreed to identify mutual agricultural capacities as well as suitable areas for the exchange of agricultural products in order to increase the level of trade in the agricultural sector, according to the official.

He went on to say that the Islamic Republic of Iran has very good capacities in the field of transit and transportation, saying: “During this visit, it was agreed to activate the north-south corridor. This transit route will make the time and distance of transiting goods from Russia and different northern countries to the southern regions much shorter.”

 

 

Pakistan: 200bps cut in policy rate anticipated

Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) is scheduled to meet on November 04, 2024 for adjustment in policy rate

According to a poll conducted by Pakistan’s leading brokerage house, Topline Securities, 85% of the participants expect that the central bank will announce a minimum rate cut of 200bps.

Out of these 63% expect the interest rate to be cut by 200bps, 30% expect a cut of 250bps, while 8% anticipate a cut of more than 250bps.

The brokerage house believes that the larger rate cut expectations in the upcoming monetary policy meetings are driven by the single-digit inflation reading of 6.9% in September 2024, which is expected to continue in October 2024 within a range of 6.5% to 7.0%.

Significant fall in YoY inflation in recent months is on the back of faster food disinflation and downward electricity prices adjustments (FCA).

The brokerage house is also of the view that the SBP will announce a rate cut of 200bps, similar to the cut of 200bps in the last monetary policy meeting, taking total cut to 650bps.

This will be 4th consecutive cut of this cycle.

Post this rate cut of 200bps, real interest rates will remain at +860bps, still higher than Pakistan’s historic average of 200-300bps.

In order to absorb any external and budgetary shock, the brokerage house believes, Central bank will continue to keep positive real rate in range of 300 to 400bps in medium terms over forward looking inflation.

6-minth KIBOR and 6-months T-Bills are down 324-359 bps from last MPC meeting.

Falling inflation expectations, the 6M KIBOR and Treasury bills rate are down 324-359bps since last monetary policy meeting on September 12, 2024 and currently hovering at 14.43% and 13.8%, respectively. This also suggest, market participants are expecting a big rate cut in upcoming meetings.

The brokerage house expects policy rate to come down to 13% by Jun 2025 with average inflation expectation of 7%for FY25.

 

Hezbollah confirms Hashem’s martyrdom

Hezbollah announced on Wednesday that Sayyed Hashem Safieddine, the head of the Lebanese resistance movement’s Executive Council, was martyred in an Israeli airstrike on Beirut earlier this month.

“We pledge to our great martyr and his martyred brothers to continue the path of resistance and jihad (struggle) until achieving its goals of freedom and victory,” Hezbollah said in a statement.

The Israeli army said on Tuesday that Safieddine was killed during a strike on October 04, 2024.

Safieddine was widely expected to be formally elected as the next Hezbollah leader after Israel assassinated Sayyed Hassan Nasrallah last month. 

Israel killed Nasrallah, who was the movement’s chief since 1992, in an airstrike on a neighborhood in southern Beirut on September 27, 2024.

US media acknowledged that Israel used American-made 900kg (2,000-pound) bombs in the strike that killed Nasrallah and levelled residential buildings in Beirut’s suburb of Dahieh.

Israel has killed multiple Hezbollah commanders amid the exchanges of fire with the resistance group since October 8, 2023. That is a day after Israel launched its war of genocide in Gaza. Hezbollah has carried out attacks against Israel in a show of solidarity with Palestinians in Gaza.

Israel also launched a massive bombing campaign in Lebanon on September 23 this year and launched a ground incursion into southern Lebanon on October 1.

Israel has killed about 2,500 people in Lebanon since October last year, including 1,800 in the past few weeks.

In response to Israel’s attacks, Hezbollah has intensified its retaliatory operations targeting strategic military sites in Tel Aviv and Haifa.  

The resistance movement’s reprisal strikes have spread a growing sense of panic among Israelis keeping the regime on its toes.