Business

Rupee breaches Rs290 mark against US dollar

Published

2 months ago

September 27, 2023

Admin

KARACHI:

The Pakistani rupee has displayed significant strength, breaching the Rs290 mark against the US dollar for the first time in the past seven weeks. This marks its fifteenth consecutive working day of gains on Tuesday.

According to data from the State Bank of Pakistan (SBP), the domestic currency has made further gains, appreciating by 0.37% or Rs1.06, reaching a high of Rs289.80 against the US dollar. This places it just Rs1.31 away from its pre-interim government value of Rs288.49/$ in mid-August.

Over the past 15 working days, the Pakistani currency has cumulatively regained almost 6% or Rs17.30 against the US dollar. This remarkable turnaround comes after the currency had experienced depreciation of slightly over 6% or Rs18.60 in the first week of September 2023, reaching an all-time low of Rs307.10 against the dollar. This occurred before the caretaker Prime Minister Anwaarul Haq Kakar took office in mid-August 2023.

Market reports suggest that foreign currency inflows have improved since the government and the central bank took action against currency smugglers, speculators, and hoarders. The State Bank of Pakistan has continued to suspend the licenses of exchange companies allegedly involved in illicit trade activities.

Last week, a leading currency dealer pointed out that dealers have been surrendering $15 million a day in the interbank market in recent weeks, compared to $5-7 million before the crackdown. This increased flow of foreign currencies into the interbank network is expected to continue in the coming days.

The crackdown has succeeded in attracting inflows through official channels. Exporters have started selling their holdings on futures counters, anticipating further currency recovery to Rs260-280/$ in the ongoing upward cycle. Similarly, inflows of workers’ remittances through official channels have improved in recent days.

Recently, Arif Habib Limited has also expressed optimism, stating that the currency may appreciate further to Rs278-280/$ during the current rally. The Interim Commerce Minister, Gohar Ejaz, previously stated that the actual value of the currency currently stands at Rs260/$.

In the open market, the local currency has gained 0.68%, or Rs2, reaching Rs291/$, according to the Exchange Companies Association of Pakistan (ECAP). In the retail market, it has cumulatively recovered nearly 13% or Rs37 over the past month.

The difference in the value of the rupee between the interbank and open markets has narrowed to 0.41% (Rs1.20), well below the maximum spread of 1.25% (almost Rs4) recommended by the IMF.

While the rupee’s appreciation has raised hopes for a reduction of Rs10-12 per litre in petroleum product prices, there are concerns that the global oil market could see price hikes. This follows Russia’s decision to ban the export of diesel and co-products in order to stabilise prices in its local market ahead of winter. Such global price increases could impact Pakistan’s market and potentially prevent a downward revision in prices.

Published in The Express Tribune, September 27^th, 2023.

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Business

PSX crosses 60,000 points milestone

Published

51 mins ago

November 28, 2023

Admin

Segregation of client assets is critical as brokers have been penalised for using client money illegally. PHOTO: AFP

KARACHI:

The Pakistan Stock Exchange (PSX) smoothly crossed the psychological barrier of 60,000 points during the early trading hours of Tuesday.

The gains came due to rich individuals and institutional investors making significant new investments in expectation of deep cuts in interest rates and the availability of stocks at low prices.

The PSX benchmark KSE-100 Index hit a new all-time high level of 60,745 points, rising by 1.56% or 934 points before mid-day from Monday’s close at 59,811 points. Penny stocks were the volume leader in the rally including textile, technology, food, bank and steel stocks.

Speaking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas said: “The high expectation for a deep 7% cut in the key policy rate (interest rate) by the State Bank of Pakistan over the one-year agreed investors to take new possessions”.

“The central bank is expected to cut its key policy rate to 15% by December 2024 from record high 22% at present…ahead of a potential deceleration in inflation reading next year,” he added

Abbas mentioned that the interest rate cut expectations have made rich individuals and institutional investors relocate their investments to the stock market from fixed-income instruments these days.

Topline Securities CEO Muhammad Sohail said in a comment on X (formerly Twitter) that the PSX is breaking records and the development is “still not surprising.”

The market has gained 50% in only five months to over 60,000 points from 40,000 points. “This is the fastest 50% rise in a few months after 2004,” he wrote.

Read PSX hits fresh record, nears 60k milestone

“When you have an unbelievably low valuation, a price-to-earnings ratio of 3-4%, such recovery is not at all surprising,” Sohail further commented.

Abbas further said the listed companies have booked record high growth in profit of 46% in the first nine months ending September 2023 and added that “accordingly, dividend payments by them rose robustly by 42% in the same period. This is another factor that has attracted new investment at PSX”.

The market is expecting foreign currency inflows worth around $1.5-2 billion from multilateral creditors like the World Bank and Asian Development Bank soon after the IMF executive board approves the release of its second tranche of $700 million to Pakistan in December 2023.

This is another factor for the record-buying spree at PSX.

He anticipated the market reaching 75,000-80,000 points by the end of December 2024 considering all goes well including political stability in the country, economic growth, and global commodity prices remaining stable.

“The next six months seem stable at least”, he maintained.

Business

Completion of key projects increases water storage

Published

2 hours ago

November 28, 2023

Admin

LAHORE:

The completion of eight ongoing water and hydropower projects by Water and Power Development Authority (WAPDA) is set to significantly enhance Pakistan’s water storage capacity and hydel power generation. The carry-over water capacity in the country will increase from 30 to 45 days, with an additional 9.7 MAF water storage.

During a visit to WAPDA House, a delegation from PAF Air War College Karachi, led by Air Commodore Raja Imran Asghar, received a comprehensive briefing. The delegation comprised officers from Pakistan and allied nations.

Read: Water projects presented to Turkish consultants

The delegation learned about the climate change threats and water security challenges faced by Pakistan. WAPDA’s ongoing projects, such as Diamer Basha Dam, Mohmand Dam, and others, were highlighted as crucial for the water, food, and energy security of the country.

Published in The Express Tribune, November 28^th, 2023.

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Business

Pakistan, China forge textile ties

Published

3 hours ago

November 28, 2023

Admin

SUZHOU:

A Pakistani delegation, led by Hussain Haider, Pakistan’s Consul General in Shanghai, visited Shengze Oriental Textile City in Suzhou, China, and met with representatives from local textile enterprises.

During the meeting, Haider introduced the trade and investment environment of Pakistan and China, with a particular focus on the preferential policies available to Chinese investors in Pakistan. “Currently, Pakistan’s textile exports to China mainly consist of cotton yarn, apparel, cotton fabrics, and home textiles, with cotton yarn accounting for 73% of the total,” he stated.

Expressing a strong desire for deep cooperation with Shengze’s silk and textile industry cluster, he extended an invitation to Shengze’s enterprises to visit Pakistan and gain first-hand knowledge of the trade and investment policies.

Shengze is renowned for its robust silk and textile industry with a rich history. To gain insights into the dynamics of the textile sector and explore potential collaborations, the delegation toured several textile enterprises in Shengze Oriental Textile City and reached preliminary cooperation intentions. Haider said, “We hope to further communicate and connect with Shengze Oriental Textile City. We sincerely invite Shengze’s enterprises to invest and establish factories in Pakistan, aiming to achieve mutual benefits and contribute to the deepening of China-Pakistan cooperation.”

Read: Chinese manufacturers to help textile industry

Agro-forestry Economy

The third Science and Technology Exchange Conference on China-Pakistan Tropical Arid Non-wood Forest is being held both online and offline from November 26 to 28 in Zhengzhou, China, and Gwadar, Pakistan, simultaneously.

The exchange conference aims to showcase achievements and research progress of both nations in the field of economic forestry. It also seeks to facilitate academic exchanges of woody medicinal herbs and active substances between China and Pakistan.

The event, co-hosted by the Chinese Society of Forestry (CSF) and Central South University of Forestry and Technology (CSUFT), drew over 220 officials, scholars, students, and business representatives from both countries.

In 2021, CSUFT, China Overseas Port Holding Company, and Yulin Holdings collaborated to establish an Engineering Research Centre for Tropical Arid Non-wood Forest.

THE ARTICLE ORIGINALLY APPEARED ON THE CHINA ECONOMIC NET

Published in The Express Tribune, November 28^th, 2023.

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