Pakistan’s currency, stocks recover some losses after government jacks up fuel prices

A stockbroker speaks on a phone while monitoring the share prices during a trading session at the Pakistan Stock Exchange in Karachi on May 16, 2022. (AFP/File)
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Updated 27 May 2022

Pakistan’s currency, stocks recover some losses after government jacks up fuel prices

  • Government’s decision to make highest-ever fuel price hike will unlock around $1 billion IMF funding
  • Experts forecast the hike in petroleum prices will increase inflation to 15.8 percent in the month of June

KARACHI: Bulls at Pakistan’s currency and stock markets on Friday celebrated the weekend trading session with considerable gains, traders and analysts said, after the government increased fuel prices as prior action for the revival of $6 billion International Monetary Fund (IMF) program. 

The rupee recovered 1.13 percent of its value as the United States (US) dollar closed at Rs199.76. On Thursday, the greenback hit another all-time high of Rs202.01, with the Pakistani currency losing its value by over Rs20 since April 16. 

The equity market closed in the green zone as well, with the benchmark KSE100 index reaching 42,861-point level by gaining 319 points on the back of the fuel price hike, which is expected to unlock IMF funding. 

“Stocks closed bullish amid higher trades as investors weigh petroleum price hike by the government, abolishing energy subsidies and paving way for the IMF release of $900 million under the EFF (Extended Fund Facility),” Ahsan Mehanti, chief executive officer (CEO) of the Karachi-based Arif Habib Corporation business conglomerate, told Arab News. 

“The 7th review Doha talks setting up targets for FY23 and discussions over federal budget due next month and surging global equities played a catalyst role in the bullish close.” 

Pakistan’s reluctant new government finally increased the petroleum prices by over 20 percent, or Rs30 ($0.15) per liter, after a meeting with IMF officials in Doha, in which the global lender emphasized the importance rolling back energy subsidies announced by former premier Imran Khan earlier this year. 

Financial experts said the impact of the fuel price hike would reflect on the inflation numbers next month. Inflation in the country is expected to rise to 15.8 percent from 13.4 percent in April and an expected 14.3 percent in May, they said. 

“For every Rs10 per liter change in petroleum prices, the impact on CPI (Consumer Price Index) is expected to be around 24 basis points. So, for the current Rs30 per liter increase, the impact would be around 72 bps (0.72 percent),” said Tahir Abbas, head of research at the Arif Habib Limited brokerage firm. 

“Also, this is the direct impact on the CPI, indirect impact would also be there with some lag. It would be visible in June 2022 and we expect inflation would increase to 15.8 percent in June 2022.” 

Pakistan’s energy subsidies, compared to the country’s GDP, were one of the highest in the region. The government was estimated to give around $2 billion in petroleum and electricity subsidies from April till June. 

“Today’s subsidy is the future’s inflation,” Khurram Schehzad, CEO of the Alpha Beta Core financial advisory firm, said. “We, as a nation, need to understand this very basic yet very important underlying relation that leads to structural problems disrupting the country’s finances eternally.” 

Schehzad said inflation varied from person to person according to their income levels. “Inflation is always relative, and not the same for all... inflation for people earning Rs100,000 ($502) per month would be entirely different from ones earning Rs20,000 ($100) per month, and those earning nothing at all,” he said. 

The removal of fuel subsidies is also expected to have political consequences for the new coalition government, especially when the next general elections are expected within the next one-and-a-half year. 

Pakistan relaxes 9pm restriction on market timings for a week

Updated 03 July 2022

Pakistan relaxes 9pm restriction on market timings for a week

  • The country announced restriction to save energy amid prolonged power cuts
  • Pakistan imports most of its energy needs by spending crucial foreign exchange

ISLAMABAD: The provincial governments in Pakistan's Sindh and Punjab provinces as well as the federal capital administration have relaxed 9pm restriction on market timings for a period of one week, as people prepare for Eid Al-Adha that follows weeks of heightened business activity. 

The local administrations in Sindh, Punjab and Islamabad last month ordered businesses and markets to close by 9pm in order to conserve energy and subsequently, the much-needed foreign exchange to import it. 

Pakistan's information ministry said on June 7 there was currently a gap of 4,600 megawatts between supply and demand, while the country's petroleum import bill soared by over 99 percent to $19.7 billion during the last fiscal year between July 2021 to May 2022, mainly due to rising global fuel prices, according to the official data. 

Global fuel price hikes and depreciation of local currency have compounded economic woes of the cash-strapped and energy-deficient South Asian nation of more than 220 million, with inflation hitting a 13-year high of 21.3 percent in June. 

However, the governments in Punjab, Sindh and Islamabad announced easing restrictions on market timings a week before Eid Al-Adha as people remain busy buying sacrificial animals as well as clothes and food for the major Islamic festival. In Pakistan, Eid Al-Adha will be celebrated on July 10. 

"The government of Sindh is pleased to suspend... restrictions on closing hours of various shops, restaurants and wedding halls," the Sindh home department said in a notification, "with immediate effect to 10.7.2022." 

The restrictions will "come back into force from 11.7.2022, instantly," it added. 

Similarly, the Punjab government on Saturday allowed markets across the province to remain open past 9pm until Chand Raat (the night Eid). 

"Restriction to close markets and bazaars across Punjab ended," the provincial government said in a tweet on Saturday. "The decision will take effect today." 

The local administration in the Pakistani capital of Islamabad also followed suit in the "interest" of the people. 

"The office order issued... regarding the closure of shops and establishments are hereby suspended till 10-07-2022 in public interest," the Islamabad district magistrate's office said in a notification on Saturday. 

The restriction will come back into force with effect from July 11 immediately, it added.

French paraglider goes missing in northern Pakistan

Updated 03 July 2022

French paraglider goes missing in northern Pakistan

  • Savall Xavier Alain Francois flew along with two Spanish paragliders from a peak in Hunza on Saturday
  • The Spanish duo landed safely at a riverside, but there has since been no trace of the French pilot

GHIZER: A French paraglider pilot, Savall Xavier Alain Francois, went missing shortly after he took a flight from a peak in Pakistan's northern Gilgit-Baltistan region on Saturday, officials told Arab News. 

Gilgit-Baltistan, a region administered by Pakistan as an autonomous territory, is home to some of the highest peaks in the world and a major tourist destination. Hundreds of tourists visit the region each year for expeditions on various peaks, paragliding and other sports. 

The French paraglider pilot flew along with two Spanish paragliders from a peak in Hunza district at around 4pm on Saturday, according to officials. While the Spanish duo landed safely, there was no trace of Francois.  

“Upon receiving the information, a team comprising Rescue 1122 members, police and local volunteers was dispatched to the site,” Hunza Superintendent of Police (SP) Zahoor Ahmed told Arab News over the phone. "But they could not trace him." 

Hunza Deputy Commissioner Muhammad Usman said they have decided to trace the missing French paraglider with the help of a chopper.

An official of the Gilgit-Baltistan Tourist Police, who wished not to be named, said the three paragliders flew from the Duikar village of Hunza and two of them safely landed at the riverside in Ganish valley.   

He said a helicopter has reached Hunza to launch a search for missing French paraglider pilot.

Uncertainty hangs over Pakistani finance minister’s future after criticism from within ruling party

Updated 03 July 2022

Uncertainty hangs over Pakistani finance minister’s future after criticism from within ruling party

  • Miftah Ismail says he has become the face of unpopular economic decisions taken by the current administration
  • Some people speculate Ismail may be replaced in coming days by Pakistan’s former finance minister Ishaq Dar

ISLAMABAD: Pakistan’s finance minister Miftah Ismail confirmed on Sunday he was facing opposition and criticism from the ruling Pakistan Muslim League-Nawaz (PML-N) party since he had become the face of unpopular economic decisions taken by the government, though some of his senior colleagues openly came to his rescue as well.

Ismail, a former International Monetary Fund (IMF) employee and the owner of Pakistan’s largest confectionary company, was handed the finance portfolio by Prime Minister Shehbaz Sharif in April when the country’s cash-strapped economy was facing multiple crises.

With a mounting import bill and dwindling foreign currency reserves, the finance minister was forced to raise the prices of petroleum products four times in little over one month while trying to revive a $6 billion IMF loan program.

His political woes were further compounded by media reports about the possible return of Pakistan’s former finance minister Ishaq Dar from self-imposed exile in London, creating some speculation that Ismail may ultimately have to step down and make space for his senior party colleague.

“I have support from the federal cabinet and PML-N but there are few party members criticizing and opposing me,” he was quoted by Pakistan’s Express Tribune newspaper.

The finance minister acknowledged he was under tremendous pressure, adding he did not want to hold his last press conference in which he announced increase in the petroleum product prices. However, he informed it was the prime minister who convinced him otherwise.

“I swear it has never happened that I was unable to find suitable words,” he said. “I kept thinking what words should I be using to start the press conference.”

Asked if he was willing to be replaced by Dar, he said it was the prime minister’s prerogative to make such decisions.

“I know only one thing that I would comply with whatever decision the prime minister takes within the next 15 minutes of becoming aware of it,” he said.

He maintained he would continue to be with the party and support its decisions even if he was removed from the post.

However, he got some support from defense minister Khawaja Asif on Saturday who said Miftah was “among the hardest working members of the PM’s team” who was performing “well under difficult circumstances.”

Asif asked other PML-N members to “show solidarity” with the finance minister.

Another PML-N stalwart and former prime minister of the country Shahid Khaqan Abbasi agreed with him, saying Ismail’s knowledge of Pakistan’s economy was “without parallel in Pakistan[‘s] politics today.”

“He is one of the most effective members of PM’s cabinet,” Abbasi continued. “He has played a crucial role in saving Pakistan from default and in implementing PMLN’s economic reform agenda.”

Lots of lobe: Pakistani baby goat aims at world record for longest ears

Updated 03 July 2022

Lots of lobe: Pakistani baby goat aims at world record for longest ears

  • Simba is only one month old but its ears are already 53 cm long and growing
  • His ears are now 10 cm longer than of the current record holder, a goat born in Saudi Arabia

KARACHI: The owner of Simba, a Pakistani baby goat born with unusually long ears, is aiming at having it recognized by Guinness World Records as the kid’s earlobes are already half a meter long and keep on growing. 

Simba was born on June 4, 2022, with 48 cm-long ears that in less than a month have already reached 53 cm — 10 cm longer than of a goat born in Saudi Arabia, which according to the Pakistani kid’s owner, Muhammad Hasan Narejo, has been assumed by breeders to be the unofficial current record holder. 

“I applied to the Guinness book team,” he told Arab News over the weekend. “They have successfully accepted our request and we are expecting their answers in 10 to 12 weeks.”

While Simba was born at Narejo’s home in Karachi, he also owns a farm in Sanghar in Pakistan’s southern Sindh province, where for the past four years he has been breading goats from the Lady and Barbari breeds.

Narejo and his younger brother pet Simba outside its cage in a garden, on July 1, 2022. (AN photo)

Simba is from the Lady breed, which generally has longer ears, although not this long. 

“This is a giant size,” he said. “I went to the tailor and made a special bag for this baby goat. We carry the ears in the bag.”

The kid’s ears are longer than its body. The pelage is also rare, as the ears are white, contrasting with its camel-color coat.

The name Simba comes from the protagonist of Disney’s “The Lion King” animated feature, which Narejo said he had watched in childhood.

“Simba means a lion,” he said. “This name clicked in my mind, so I gave this name to this goat baby.”

Simba walks idly behind its owner, Mohammad Hasan Narejo, in a garden, on July 1, 2022. (AN photo)

The one takes care of Simba is Narejo’s younger brother, Yasir Ali Narejo, who told Arab News the goat is his “best friend.”

“I brush him, I walk with him. Simba is very naughty. He tries to eat sand and grass, but since he is a baby, he cannot eat grass.”

The owner said he has already received offers from breeders in Saudi Arabia and Oman interested in buying Simba.  

“They say, 'you set the price and we will buy.' But so far, my focus is to bring Simba into the Guinness Book of World Records, register it with the name of Simba Pakistani, make Pakistan feel proud.”

Some of Narejo’s neighbors in Karachi, like Muhammad Salman, are already proud of the little goat.

“We all are happy, as Allah has blessed this area with this beautiful creature,” he said. “We feel proud of such a beautiful animal.”

Pakistan’s Hajj operations going smoothly, says religious affairs minister

Updated 03 July 2022

Pakistan’s Hajj operations going smoothly, says religious affairs minister

  • Mufti Abdul Shakoor confirms Saudi Arabia has increased Pakistan’s Hajj quota to 83,132
  • Pakistani Hajj mission has established two hospitals and 7 dispensaries for pilgrims

ISLAMABAD: Federal Minister for Religious Affairs Mufti Abdul Shakoor said on Sunday Pakistan’s Hajj operations were running smoothly as a majority of pilgrims had already arrived in Saudi Arabia.

Pakistan’s religious affairs minister Mufti Abdul Shakoor (2L) takes briefing from the officials of Pakistani Hajj mission in Makkah, Saudi Arabia, on July 3, 2022. (Photo courtesy: Ministry of Religious Affairs)

Pakistan was initially allocated a quota of 81,132 pilgrims this year, out of which more 34,000 were supposed to utilize the government scheme while the rest had to be facilitated by private operators.
However, the Saudi authorities later increased Pakistan’s quota by 2,000, the minister confirmed, taking it to 83,132 pilgrims.
“The Saudi government has provided best facilities to Pakistani pilgrims,” he told Arab News over the phone from Makkah. “With [the kingdom’s] cooperation, we have completed all arrangements and our Hajj operation is going on smoothly without any problem.”

Pakistan’s religious affairs minister Mufti Abdul Shakoor is inspecting food preparations for pilgrims in Makkah, Saudi Arabia, on July 1, 2022. (Courtesy: Ministry of Religious Affairs)

Shakoor said the arrangements provided to pilgrims included pick and drop service from airport, provision of good residential facilities in both Makkah and Madinah, hygienic food, transport and medical facilities.
“The Hajj medical mission has established one main hospital and five dispensaries in Makkah along with one main hospital and two dispensaries in Madinah,” he continued. “78,322 pilgrims have already arrived [in Saudi Arabia], including 34,322 under the government scheme, and the arrival of private scheme pilgrims will complete on July 4.”
The minister applauded the Saudi government for providing the Makkah Route facility to Pakistani pilgrims on a bigger scale this year, making it possible for the religious affairs ministry to operate “Hajj flights of Peshawar Faisalabad and Sialkot from the Islamabad airport.”

Pakistan’s religious affairs minister Mufti Abdul Shakoor is inspecting food preparations for pilgrims in Makkah, Saudi Arabia, on July 1, 2022. (Courtesy: Ministry of Religious Affairs)

“To help pilgrims perform Hajj without any trouble, the Saudi government has improved the services at Mina, Arafat and Muzdalifah,” he said, adding the authorities had also established a toll-free helpline and there were guides in both Makkah and Madinah to help pilgrims and resolve their problems.
Shakoor said the Saudi authorities had also provided home check-in facility on return flights that would make them collect luggage from the residential facilities of pilgrims for flights from Makkah and Madinah.
Asked about Hajj expenses, he said the government had managed to significantly bring them down despite the depreciation of the Pakistani currency and other financial challenges.

Pakistan’s religious affairs minister Mufti Abdul Shakoor is inspecting food preparations for pilgrims in Makkah, Saudi Arabia, on July 1, 2022. (Courtesy: Ministry of Religious Affairs)

“We have brought down Hajj expenses by eliminating the role of the middle man and got residences directly from Saudi companies at much lower rates,” he said.
The minister added the government had tried to further cut down the expenses by providing one way trip to pilgrims in such a way that those who landed in Madinah would return to Pakistan after performing the pilgrimage from Makkah and those who arrived in Jeddah would return from Madinah.