Pakistan stocks close bearish as diminished policy rate cut hopes outweigh easing inflation

Stock brokers monitor share prices displayed on a digital screen during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on February 12, 2024. (AFP/File)
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Updated 15 March 2024
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Pakistan stocks close bearish as diminished policy rate cut hopes outweigh easing inflation

  • Monetary policy surveys show a majority of people expect the policy rate to remain unchanged at 22 percent
  • The benchmark KSE100 index also lost its value by 1.5 percent on a week-on-week basis due to profit taking

KARACHI: Pakistan’s equities ended the weekend trading session on a bearish note, as investor hopes for an interest rate cut in the upcoming monetary policy diminished, despite easing inflationary pressures, according to equity analysts.

Trading at the bourse remained subdued throughout the week, except for Thursday, when the benchmark KSE100 index surged by 1,015 points. This was triggered by the commencement of talks between the International Monetary Fund (IMF) and Pakistani authorities for the final review of the $3 billion bailout program.

On Friday, the KSE 100 index shed 247 points, closing at 64,816, which marked a 1.5 percent week-on-week decline, primarily due to the anticipated maintenance of the current interest rate and profit-taking.

“Uncertainty surrounding the outcome of the Pakistan-IMF review talks, coupled with expectations of a status quo in the upcoming monetary policy announcement, and the weekly inflation surge to 32.89 percent year-on-year, acted as catalysts for the bearish close on Friday,” Ahsan Mehanti, CEO of Arif Habib Corporation, commented.

Pakistan’s central bank is slated to meet on Monday to review the policy rate, which has been held steady at 22 percent across the last five consecutive monetary policy committee meetings. Investors are hopeful for some policy easing after inflation in February 2024 dipped to 23.1 percent from January’s 28.3 percent and February 2023’s 31.5 percent.

“Investors were optimistic that the central bank might soften its monetary stance, but surveys conducted by financial firms indicate that the majority of participants expect the status quo to be maintained,” Abdul Azeem, Head of Research at Spectrum Securities, said.

A survey by Topline Securities revealed that 55 percent of participants expect the policy rate to remain at 22 percent, while the remaining 45 percent predict a policy rate reduction. Of those anticipating a cut, 2 percent predict a decrease of 25 basis points (bps), 10 percent foresee a 50bps reduction, 24 percent expect a 100bps cut and 9 percent believe it will decrease by more than 100bps.

Additionally, a recent survey by the CFA Society Pakistan, affiliated with a global association of investment professionals, indicated that 67.3 percent of participants do not anticipate any change in the policy rate.“We believe the central bank will remain cautious and adopt a watch-and-see approach until the inflation trend continues to fall,” said Muhammad Sohail, CEO of Topline Securities.

He highlighted key risks to the inflation trajectory, including delays in the release of IMF funds, the IMF demanding additional tax measures to meet revenue targets in case of any shortfall and pressure on the dollar against the rupee, primarily due to delays in receiving dollar inflows.

The IMF mission in Pakistan is currently reviewing the quarterly performance of the country’s economic indicators under the $3 billion bailout program, with the majority of Pakistani analysts optimistic about a smooth review process.

“The review for the third and final tranche of the Standby Agreement is expected to go very smoothly,” said Dr. Sajid Amin, deputy executive director at the Sustainable Development Policy Institute (SDPI) in Islamabad, noting both parties are satisfied with the progress on the review targets.

The successful completion of the program will pave the way for the disbursement of the remaining $1.1 billion and will provide an opportunity to lay the groundwork for a new and extended IMF program.

“The country urgently needs a new IMF program to manage external financing needs and economic recovery,” Amin added. “It is encouraging to see that the new government has a clear approach, unlike the previous two instances where engagements with the IMF were delayed due to political issues.”

Pakistani financial analysts believe that a larger IMF program would boost investor confidence, potentially leading the stock market to reach new heights.

“The stock market is expected to scale new highs if the IMF agrees to an $8-9 billion program,” said Tahir Abbas, Head of Research at Arif Habib Limited.

He expected the key stock index, KSE100, might reach the 100,000 mark with the longer-term IMF program.


Pakistan sends 23rd relief consignment for Palestine, Lebanon and Syria

Updated 59 min 23 sec ago
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Pakistan sends 23rd relief consignment for Palestine, Lebanon and Syria

  • Israel’s war in Gaza killed over 48,000 people and displaced millions of others, while thousands more have been affected in Lebanon, Syria
  • Pakistan has so far dispatched 1,803 tons of essential supplies for the war-affected people in the region, PM Shehbaz Sharif’s office says

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) has dispatched a 23rd relief consignment for the people of Palestine, Lebanon and Syria, Prime Minister Shehbaz Sharif’s office said on Sunday.
This consignment, comprising 50 tons of essential supplies, was sent by the NDMA in collaboration with Pakistani charity, Al-Khidmat Foundation, to provide humanitarian aid to people affected by Israeli military actions in the region.
Israel’s war in Gaza, which began after Oct. 2023 attacks by Hamas, has killed over 48,000 people, injured thousands more and displaced millions of people in the territory, whereas thousands of others have been affected by Israeli strikes on Lebanon and Syria.
The relief consignment was dispatched through a chartered flight from the Jinnah International Airport in Karachi to Jordan, according to PM Sharif’s office.
“The relief consignment included tin meat, powdered milk, hygiene kits, clothing, blankets, tents, and sleeping bags,” Sharif’s office said in a statement.
Pakistan does not recognize nor have diplomatic relations with Israel and calls for an independent Palestinian state based on “internationally agreed parameters.”
The South Asian country has also called on Israel to withdraw from Lebanese and Syrian territories, including Golan Heights, and allow United Nations (UN) peacekeepers to freely operate in the region to ensure compliance with international agreements.
“The Government of Pakistan continues to send relief supplies based on the needs of the war-affected populations of Lebanon, Syria and Palestine,” Sharif’s office said.
“In total, up till now, 1,803 tons of relief items have been dispatched.”


Pakistan seeks Saudi investment in tech sector with over 100 local firms joining LEAP 2025 in Riyadh

Updated 09 February 2025
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Pakistan seeks Saudi investment in tech sector with over 100 local firms joining LEAP 2025 in Riyadh

  • The fourth edition of the LEAP conference aims to expand business networking and investment opportunities in the global tech sector
  • IT minister says Pakistan, which recorded $348 million IT exports in Dec., offers ‘world-class’ digital services, investment opportunities

ISLAMABAD: State Minister for Information Technology (IT) Shaza Fatima Khawaja on Sunday invited Saudi businessmen to invest in Pakistan’s tech sector, highlighting the participation of over 100 Pakistani firms in the LEAP 2025 tech conference in Riyadh.

The minister expressed these views while addressing the Pakistan-Saudi Business Forum in Riyadh, a networking event jointly organized by the Pakistan Software Houses Association (P@SHA) and the Pakistan Software Export Board (PSEB), ahead of the four-day LEAP tech conference being held on Feb. 9-12.

This is the fourth edition of LEAP, recognized as Saudi Arabia’s award-winning global technology event for which entrepreneurs, investors and startups have converged in Riyadh to present their products to an anticipated audience of over 170,000 visitors. The latest edition follows last year’s record-breaking LEAP 2024, which saw $13.4 billion in investments and project commitments. Under the theme “Into New Worlds,” LEAP 2025 aims to expand business networking and investment opportunities in the tech sector.

Pakistan recorded the highest-ever monthly IT exports of $348 million in Dec. 2024, up by 15 percent year-on-year and 12 percent month-on-month, according to official data. The LEAP event offers Pakistani firms a platform to collaborate with stakeholders, explore business opportunities and showcase Pakistan’s diverse IT exports, including software development, artificial intelligence (AI), blockchain, fintech, gaming and robotics.

“Pakistan seeks strong partnerships in advanced technology under Saudi Vision 2030 and we invite Saudi investors to invest in Pakistan’s fintech, cybersecurity, and cloud computing sectors,” Khawaja said.

“Pakistan is making its largest participation in LEAP 2025, with over 100 tech companies and more than 1,000 participants.”

LEAP 2025 will debut Tech Arena, a platform for emerging innovations, featuring a ‘Live TV’ stage hosted by BBC Click’s Lara Lewington and Spencer Kelly. It is one of two new segments at LEAP 2025, alongside the SportsTech stage, supporting Saudi Arabia’s Vision 2030 for innovation and technological growth.

Visitors will explore AI, mixed reality, fashion tech, and brain-computer interfaces. Key highlights include Anouk Wipprecht’s Tech Couture exhibit, Adobe’s ‘Project Primrose’ digital dress technology, and Aramco-backed Terra Drone’s long-range medical delivery system. Saudi oil giant Aramco will also showcase SARA, an AI-driven assistant for decision-making. Engine VR will present its Golden Gloves VR boxing platform with live demos by UFC fighter Andrew Sanchez, while Alwaleed Philanthropies will showcase its Atlai AI program to support global deforestation monitoring. XPANCEO will introduce smart contact lenses with integrated computing.

Pakistan is providing world-class digital services and offering excellent opportunities for investors, according to Khawaja.

“We are not just participating [in LEAP 2025] but signing memorandums of understandings and making agreements for real economic growth through cooperation,” she said, adding that the Digital Cooperation Organization (DCO) was a key partner in the South Asian country’s digital growth.

The 16-member DCO, the world’s first standalone international intergovernmental organization, focuses on the acceleration of growth of an inclusive and sustainable digital economy. Pakistan is a key member of the organization.

Khawaja said the Digital Nation Act 2025 marked a new era in the Pakistani digital realm and provided a golden opportunity for digital investment and technological collaboration between Pakistan and Saudi Arabia. The act aims to align Pakistan’s economy, governance and services with global digital standards.

“The Digital Foreign Direct Investment (DFDI) Forum will soon be held in Islamabad, bringing together global investors, including from Saudi Arabia,” she added.


Pakistan’s commercial capital bars entry of dumper trucks in daytime amid rising accidents

Updated 09 February 2025
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Pakistan’s commercial capital bars entry of dumper trucks in daytime amid rising accidents

  • The announcement came hours after a dumper truck crushed three people to death in Ibrahim Hyderi area of Karachi
  • Accidents are common in Pakistan where traffic rules are rarely followed, roads and vehicles are in poor condition

KARACHI: Authorities in Pakistan’s southern Sindh province have barred entry of dumper trucks in the commercial hub of Karachi from 6am till 11pm, a senior official said late Saturday, amid a rise in fatal road accidents that involved heavy vehicles.
The announcement came hours after a dumper truck crushed three people to death in the city’s Ibrahim Hyderi area. It followed a similar incident in Gulistan-e-Jauhar, which claimed three lives a day ago.
Fatal road accidents are common in Pakistan where traffic rules are rarely followed and roads as well as a majority of vehicles are in poor condition. Road crashes have killed at least 96 people, including 71 men, 12 women and 13 children, and injured nearly 1,300 others in Karachi in the last two months, local media reports, citing police.
On Saturday, Sindh Chief Secretary Asif Haider Shah presided over a meeting of senior provincial officials and decided to introduce a Vehicle Inspection and Certification System (VICS) in the province among other measures to contain the rising number of road accidents.
“All vehicles in the city should have a certificate with a QR code from the Transport Department,” said a statement issued from the chief secretary’s office after the meeting, adding that authorities will conduct physical verification of all heavy vehicles and their drivers in the city.
The chief secretary directed inspection of all water tankers of the Karachi Water and Sewerage Board within a month, while the Sindh Solid Waste Management Board, which collects garbage with the help of dumper trucks, was ordered to shift operations to nighttime within 3 months.
“The main reason for accidents is the lack of implementation of the heavy traffic laws,” the chief secretary was quoted as saying.
“FIRs [police complaints] should be registered against those who drive recklessly along with a challan.”
The official urged motorcyclists to wear helmets and instructed traffic police to increase enforcement of traffic laws in the city.


Pakistan, UK discuss investment opportunities in energy, minerals and infrastructure

Updated 09 February 2025
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Pakistan, UK discuss investment opportunities in energy, minerals and infrastructure

  • Pakistan’s finance minister meets UK under-secretary for Afghanistan, Middle East and Pakistan in Portugal 
  • Cash-strapped Pakistan is eyeing investments in minerals, agriculture and energy to escape economic crisis

ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb this week met British envoy Hamish Faulkner in Portugal where the two sides discussed bilateral investment opportunities in energy, minerals and infrastructure, the finance ministry said. 

The meeting between Aurangzeb and Faulkner, the British Under-Secretary for Middle East, Afghanistan and Pakistan, took place as cash-strapped Pakistan seeks investments from regional and other foreign allies to shore up its $350 billion economy.

The Pakistani government launched a hybrid civil-military government body, the Special Investment Facilitation Council (SIFC) in June 2023 to attract foreign investment from allies and other nations. The SIFC seeks to target investment in key economic sectors such as energy, mines and minerals, infrastructure, agriculture and livestock, among others. 

Aurangzeb is in Portugal where he attended the funeral ceremony of the late Prince Karim Aga Khan IV, the spiritual leader of the Ismaili community, on Saturday. 

“During the meeting, matters of mutual interest were discussed especially investment opportunities in the energy, minerals and infrastructure sectors in Pakistan,” the Ministry of Finance said. 

The Finance Minister expressed his desire to make relations between the two countries more sustainable, saying that warm ties between Pakistan and the UK were based on mutual trust and partnership. 

Earlier this month, a delegation of American investors led by Gentry Beach, a Texas hedge fund manager and businessman close to US President Donald Trump, arrived in Pakistan. 

Beach met Pakistani officials and spoke to media during his two-day visit to the country. He expressed his desire to invest in the country’s energy, minerals, real estate and infrastructure sectors. 

Pakistan and the UK have a long and multifaceted relationship, with the latter hosting a large Pakistani diaspora community. 

Pakistan is also a member of the Commonwealth, a voluntary association of 56 countries out of which the vast majority are former British territories.


Pakistan calls for OIC summit as Trump pushes Gaza displacement plan

Updated 09 February 2025
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Pakistan calls for OIC summit as Trump pushes Gaza displacement plan

  • Pakistan’s Foreign Office earlier said Trump’s proposal to displace the people of Gaza was ‘deeply troubling, unjust’
  • US President Donald Trump last month suggested resettling Palestinians residing in Gaza to Egypt, Jordan or other countries

ISLAMABAD: Pakistan’s Foreign Minister Ishaq Dar this week called for an extraordinary summit of the foreign ministers of the Organization of Islamic Cooperation (OIC) to discuss the ongoing plight of the people of Palestine, and US President Donald Trump’s proposal to resettle Palestinians in Gaza to other countries. 

Earlier this month Trump suggested that Palestinians residing in Gaza should be resettled in Egypt, Jordan or other countries while addressing the media alongside visiting Israeli Prime Minister Benjamin Netanyahu.

The proposal was rejected by both Egypt and Jordan and countries including Pakistan, prompting condemnation from various international rights groups as well.

Dar spoke to his Iranian counterpart Seyed Abbas Araghchi over the telephone during which both diplomats discussed Trump’s proposal. Dar described it as “deeply troubling and unjust,” the foreign office said on Saturday. 

“He also conveyed Pakistan’s support for convening of an Extraordinary OIC meeting of Foreign Ministers to deliberate upon this issue,” the foreign office said in its statement. 

“The two Ministers agreed to maintain close contact on these developments in the days ahead.”

Dar said the Palestinian land belongs to the people of Palestine, adding that a two-state solution in accordance with the UN Security Council resolutions is the only viable option to resolve the Middle East crisis.  

“Pakistan shall continue to support the establishment of a sovereign, independent, and contiguous Palestinian state based on pre-1967 borders, with Al-Quds Al-Sharif as its capital, the statement quoted Dar as saying. 

Trump’s controversial statement came weeks after Hamas and Israel agreed to a six-week initial ceasefire phase, which ended 15 months of war. 

The truce included the gradual withdrawal of Israeli forces from central Gaza and the return of displaced Palestinians to northern Gaza.