Saudis commit US$101 million for Pakistan

The Saudi Fund for Development (SFD), Chief Executive Officer, Sultan Abdulrahman Al-Marshad and Secretary of the Ministry of Economic Affairs of Pakistan Dr. Kazim Niaz signed two strategic development loan agreements totaling US$101 million to bolster Pakistan's clean energy sector.

These agreements, valued at US$66 million for the Shounter Hydropower Project and US$35 million for the Jagran-IV Hydropower Project, aim to significantly enhance Pakistan's renewable energy infrastructure by adding a combined total of 70MW hydropower capacity to the national grid.

The funding will facilitate the construction of essential infrastructure, including dams, water diversion systems, powerhouses, and transmission lines, marking a significant step forward in Pakistan's transition towards sustainable energy sources.

These projects not only aim to address the environmental and financial challenges associated with conventional energy sources but also underscore the critical role of clean energy in promoting sustainable development, economic growth, and social welfare across Pakistan.

This move reinforces the SFD's long-standing commitment to supporting Pakistan's development goals, having financed 41 development projects and programs since 1976 with soft loans and grants exceeding US$1.4 billion, aimed at fostering growth in various critical sectors throughout the country.

US-led UN resolution on Gaza ceasefire vetoed

The United Nations Security Council on Friday turned down a resolution calling for an immediate ceasefire in Gaza and an Israel-Hamas hostage deal after Russia and China vetoed the measure proposed by the United States.

The resolution, on which Algeria also voted no and Guyana abstained, called for an immediate and sustained ceasefire lasting roughly six weeks that would protect civilians and allow for the delivery of humanitarian assistance. Eleven of the 15 council members voted for the resolution, but the Russia and China vetoes stopped its passage.

The council will meet at 1400 GMT on Saturday to vote on an alternative resolution drafted by elected members of the Security Council, diplomats said.

That resolution demands an immediate ceasefire for the current Muslim holy month of Ramadan, the release of all hostages and an expanded flow of humanitarian assistance to Gaza.

The draft does not include provisions supporting ongoing diplomatic efforts to secure a ceasefire - an element of the US resolution. Washington has been working with Qatar and Egypt to try to broker a deal.

Friday was the first time Washington had backed a text that came up for a vote with the word "ceasefire" in it during the war in Gaza, reflecting a toughening of the Biden administration's stance toward Israel.

Earlier in the five-month-old war, the US was averse to the word ceasefire and vetoed measures that included calls for an immediate ceasefire.

"The vast majority of this council voted in favor of this resolution, but unfortunately Russia and China decided to exercise its veto," US Ambassador to the United Nations Linda Thomas-Greenfield told the Security Council.

She accused Russia and China of vetoing the resolution for cynical and petty reasons. She said they opposed it simply because it was penned by the US and criticized both countries for not condemning Hamas's October 07 attack on Israel.

"For all the fiery rhetoric, we all know that Russia and China are not doing anything diplomatically to advance a lasting peace or to meaningfully contribute to the humanitarian response effort," she told the council after the vote.

The US has wanted any Security Council support for a ceasefire to be linked to the release of hostages held by Hamas in Gaza. Palestinian Hamas fighters killed 1,200 people and took 253 captive in their Oct. 7 attack, Israel has said.

Nearly 32,000 Palestinians have been killed in Israel's subsequent offensive in the Gaza Strip, according to health authorities in the Hamas-ruled enclave.

Russia's ambassador to the UN, Vassily Nebenzia, said the US-led resolution was exceedingly politicized and contained an effective green light for Israel to mount a military operation in Rafah, a city on the southern tip of the Gaza Strip where more than half of the enclave's 2.3 million residents have been sheltering in makeshift tents.

"This would free the hands of Israel and it would result in all of Gaza and its entire population having to face destruction, devastation, or expulsion," Nebenzia told the meeting.

China's UN ambassador, Zhang Jun, criticized the text proposed by the US for not clearly stating its opposition to a planned military operation by Israel in Rafah, which he said could lead to severe consequences. He said Beijing also supported the alternative.

But Thomas-Greenfield said that measure fell short.

"In its current form, that text fails to support sensitive diplomacy in the region. Worse ... it could actually give Hamas an excuse to walk away from the deal on the table," she said.

French President Emmanuel Macron said on Friday that his country would work with Jordan and the United Arab Emirates to persuade Russia and China to back yet another alternative resolution at the United Nations for a ceasefire in Gaza.

 

 

Russia: 40 killed in attack on concert hall

The Islamic State claimed responsibility for an attack in which at least dozens of people were killed and wounded when individuals reportedly armed with automatic weapons opened fire at Crocus City Hall, a concert venue in suburban Moscow, Russia.

"According to preliminary data, as a result of the terrorist attack at the Crocus City Hall building 40 people were killed and over 100 were injured," Russia's Federal Security Service (FSB) said in a statement reported by TASS.

Citing eyewitnesses, the Russian news agency reported that the group of unidentified men "armed with assault rifles went on a shooting spree in the lobby and then inside the concert hall just before a concert by the rock band Picnic."

The attack comes on the heels of Russian President Vladimir Putin's contested reelection and over two years into Russia's invasion of Ukraine, which has received weapons support from around the world, including the United States.

In a lengthy social media post, Mykhailo Podolyak, an adviser to Ukrainian President Volodymyr Zelenskyy, said that Ukraine certainly has nothing to do with the shooting/explosions in the Crocus City Hall.

"There is not the slightest doubt that the events in the Moscow suburbs will contribute to a sharp increase in military propaganda, accelerated militarization, expanded mobilization, and, ultimately, the scaling up of the war," Podolyak added. "And also to justify manifest genocidal strikes against the civilian population of Ukraine."

According to The Guardian, John Kirby, the White House national security spokesperson, told reporters that there's no indication at this time that Ukraine, or Ukrainians were involved in the shooting... We're taking a look at it, but I would disabuse you at this early hour of any connection to Ukraine."

Asked whether the attack signals cracks in Putin's regime, Kirby said that there are people in Moscow and in Russia that object to the way Putin is governing the country, but I don't think we, at this early hour, can make a link between the shopping mall attack and political motivations. I think... we just need more time and we need to learn more information."

 

Pakistan Stock Exchange benchmark index closes almost flat

The week ending on March 22, 2024 started on a positive note, witnessed uncertainty over interest rate cuts erasing some gains from the initial days. Overall the benchmark index closed at 65,152 points, with a gain of 335 points or 0.5%WoW.

On Monday, State Bank of Pakistan (SBP) decided to maintain the interest rate at 22%, the decision did not impact the stock market as it was already expected and priced-in.

The talks with the IMF mission on the SBA’s second review concluded on Tuesday with staff-level agreement, resulting in infused positivity into the equity market and international investors as well with appreciation in dollar bonds and Pakistan Stock Exchange benchmark index.

As discussions progressed, prerequisites for the next medium-term programs have surfaced, primarily focusing on broadening the tax base. News has circulated about a new plan to collect taxes from retailers through electricity bills, which has been shared with the IMF.

Additionally, IMF has recommended eliminating GST exemptions on petroleum products and other taxes, whereby, despite a easing weekly inflation, an increase in gas price (as sought by Sui twins) and implementation of 18%GST on POL products pose risks to the inflation outlook.

On the economic front, current account for February 2024 turned positive, with a surplus of US$128 million, bringing 8MFY24 CAD below the US$1.0 billion mark.

With a controlled current account balance, SBP’s reserve position also improved by US$105 million WoW to reach US$8.0 billion as of March 15, 2024.

With the IMF's smooth review, market participation improved by 13%WoW, with the daily traded volume averaging at 323 million shares as compared to 287 million shares a week ago.

Other major news flows during the week included: 1) During first eight months of the current financial year the GoP borrowed US$6.678 billion from multiple sources, 2) FDI dropped over 17% to US$820.6 million during these eight months, 3) IT exports raised by 32% to US$257 million during February, and 4) the Supreme Court ordered NBP National Bank of Pakistan to pay PKR60 billion in pensions to retired employees.

The top performing sectors of the week were Transport, Inv. banks/ securities cos. and Tobacco, while Synthetic & Rayon, Cement, and Refinery were amongst the worst performers.

Major selling was recorded by companies with a net sell of US$9.0 million. Insurance absorbed most of the selling with a net buy of US$24.1 million.

Top performing scrips of the week were: Company-wise, top performers during the week were: NBP, DAWH, PTC, CEPB, and MEBL, while laggards included: NRL, PIOC, CNERGY, HCAR, FCCL.

With the aforementioned tax reforms, price increases, particularly with the imposition of GST on POL products, could pose a risk to the CPI outlook and potential delay in interest rate cuts, resulting in restrained market performance. However, successful implementation of tax reforms would have a positive impact on long-term economic stability.

Additionally, with SBP REER increasing to 102.2 in February 2024, there is a risk of PKR depreciation, especially in case of increased smuggling or imports.

Investors are advised to remain cautious and maintain positions in strong valuation main board stocks, particularly those offering attractive dividend yields.

 

 

Gold price tops US$2,200 an ounce

Gold finally surpassed US$2,200 an ounce for the first time on Thursday after the US Federal Reserve indicated that it would press ahead with three rate cuts in 2024 despite elevated inflation.

Spot gold set a new record of US$2,222.39 during the early hours of trading, before retreating to US$2,206.10. US gold futures soared 2.4% to US$2,208.20.

Gold’s latest rally, which started mid-February, is underpinned by longstanding tailwinds including heightened geopolitical risks and increased central bank buying. During March 2024 alone, the safe-haven metal hit new highs on five occasions.

Its rapid ascent, according to Bloomberg columnists has surprised many seasoned market observers, as there hasn’t been a clear catalyst. What has been partially driving bullion is expectations for looser monetary policy in the United States, and that has now been reaffirmed by the Fed.

On Wednesday, Fed chair Jerome Powell continued to highlight officials would like to see more evidence that prices are coming down, but it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts, he said.

“What we saw last night was the green light really for gold traders to come back in,” said Chris Weston, head of research for Pepperstone Group.

“The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labor market strength is not going to be the impediment,” Weston told Bloomberg.

Speculation around the timing of the Fed’s long-anticipated pivot may have provided the trigger for recent gains, with data showing that traders boosted their net long positions on gold in the week through March 05 by the most since 2019.

The metal stands to benefit even more when US interest rates actually do come down, as bullion-backed exchange traded funds look likely to increase their holdings, according to UBS Group.

On the geopolitical front, there are a number of risks boosting gold’s allure as a haven asset, Russia appears to be gaining the upper hand in its war in Ukraine, the Israel-Hamas conflict continues unabated and has led to a re-routing of global shipping, while the US presidential election at later this year could prove massively consequential for markets.

Chinese buying has also underpinned prices. As well as the central bank, people have been stocking up on coins, gold bars and jewelry to safeguard their wealth from a year long property downturn and losses in the country’s stock market.

Stopping military operations in Gaza

Saudi Crown Prince and Prime Minister Mohammed bin Salman and US Secretary of State Antony Blinken held a meeting in Jeddah on Wednesday.

During the meeting, they discussed the latest regional and international developments, foremost of which were the developments in the Gaza Strip. The efforts to stop military operations in Gaza, and dealing with its security and humanitarian repercussions were figured high in their talks.

The entire population in Gaza is experiencing high levels of acute food shortage, with around 1.1 million people or half the population living through catastrophic food insecurity.

Famine is now projected and imminent in the North Gaza and Gaza Governorates and is expected to become manifest during the projection period from mid-March 2024 to May 2024.

The famine is projected to occur in Gaza’s northern governorates if conflict escalates, including the impending ground offensive in the southern city of Rafah, and if the hostilities continue to obstruct the flow of humanitarian aid to parts of Gaza where people in need reside.

Some households face massive food shortages, being in the phase four and five categories and the latest data shows that people are resorting to eating animal fodder, scavenging or begging.

“There is an imminent risk of famine in North of Gaza and a risk of famine across the [Gaza] Strip,” Nour Shawaf, the MENA policy adviser at Oxfam, told Al Jazeera.

The Crown Prince and Blinken also reviewed bilateral relations and areas of cooperation between the two countries and issues of mutual concern.

The meeting was attended by Minister of Defense Prince Khalid bin Salman, Saudi Ambassador to the United States Princess Reema bint Bandar, Minister of Foreign Affairs Prince Faisal bin Farhan, and Minister of State, Cabinet Member and National Security Advisor Dr. Musaed Al-Aiban, as well as the US Secretary of State’s accompanying delegation.

March 27 declared Saudi Green Initiative Day

The Council of Ministers chaired by Custodian of the Two Holy Mosques King Salman here on Tuesday, designated March 27 each year as an official day for the Saudi Green Initiative.

The Cabinet also approved that the Royal Commission for Makkah City and Holy Sites will be the supervising body for the Project of the Custodian of the Two Holy Mosques Center for Cosmic Sciences and Crescent Observations, as well as for the Makkah Clock, and the internal and external crescent observatories.

In a statement to the Saudi Press Agency following the session, Minister of Media Salman Al-Dosary said that the Cabinet hailed the United Nations General Assembly’s adoption of a resolution on “Measures to Combat Islamophobia” and the appointment of a UN Special Envoy to combat Islamophobia. In this regard, the Cabinet reaffirmed Saudi Arabia’s commitment to international efforts countering extremist ideologies, disrupting their funding, and fostering peace, dialogue, and coexistence for global prosperity.

The Cabinet also welcomed the decisions of the international conference, organized by the Muslim World League (MWL) in Makkah under the theme “Building Bridges between Islamic Schools of Thought and Sects.” The session thanked the scholars, who came to attend the conference from around the Muslim world, for their appreciation and acknowledgement of the Kingdom’s significant efforts in serving Islam and Muslims, taking care for the Two Holy Mosques and their visitors, as well as for enhancing Islamic solidarity.

At the outset of the session, the Cabinet was briefed on the contents of the message received by Crown Prince and Prime Minister Mohammed bin Salman from the president of Uzbekistan, and the phone call that the Crown Prince had received from the secretary general of the United Nations, which discussed the latest developments, particularly the situation in Gaza.

Al-Dosary noted that the Council underscored the Kingdom’s continuous support for charitable work in the Kingdom and its emphasis on maximizing its impact on members of society. It further highlighted the achievements of the Fourth National Campaign for Charitable Work in its early days, noting the massive response that reflected the outstanding examples of solidarity and competition among benefactors in acts of goodness, generosity, and giving.

The Cabinet hailed a significant economic milestone with regard to contributing non-oil activities 50 percent share of the country's real GDP in 2023, saying that this achievement aligns with the objectives of Vision 2030 to diversify its resources and achieve a thriving economy. “This success signifies the effective implementation of Saudi Vision 2030’s programs and major projects to foster new growth engines beyond oil.”

The Council approved an agreement between the Saudi government and the International Monetary Fund (IMF) to establish the IMF’s regional office in Riyadh. It endorsed a memorandum of scientific and educational cooperation between the Saudi Ministry of Education and the Omani Ministry of Higher Education, Scientific Research and Innovation.

The Cabinet authorized the Minister of Culture or his deputy to discuss and sign with the Turkish side a draft memorandum of understanding (MoU) on cooperation in the cultural field between the Saudi Ministry of Culture and the Turkish Ministry of Culture and Tourism. The Council authorized the Minister of Tourism and Chairman of the Board of Directors of the Saudi Tourism Authority or his deputy to discuss and sign with the Korean side a draft MoU for cooperation in the field of tourism promotion and marketing between the Saudi Tourism Authority and the Korean Tourism Organization.

The Cabinet endorsed a MoU between the Saudi Food and Drug Authority (SFDA) and the Indonesian Halal Product Assurance Organizing Body for cooperation in ensuring the quality of halal products. A cooperation agreement was also endorsed between the Saudi Presidency of State Security and the Tunisian General Directorate of National Security in the field of combating terrorism crimes and it’s financing