KARACHI: When Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index hit an intra-day all-time high of 53,124 points on May 25, 2017, hardly any analysts were ready to look back as the majority of them were eyeing 56,000 as the next level before the country moved into the election year, but it turned out to be a mere dream, equity analysts say.
The start of 2017, was euphoric at Pakistan’s equity market and the main index hit a high of 52,876, but circumstances reversed and the index sunk as low as 37,919 points by the end of the year.
“Political turmoil (cases against former Prime Minister Nawaz Sharif), a weak economy and disappointing foreign flows in the equity market were the major causes that put PSX in the reverse gear,” Zeeshan Afzal, executive director-research at Insight Securities, told Arab News.
The market’s worst performance mainly in the later half of 2017 still continues, and the stakeholders expect that the trend will not reverse till the elections are over. The results of the elections will set the future direction of the market.
Pakistan Muslim League Nawaz (PML-N) faces tough challenges after the conviction and imprisonment of Mian Nawaz Sharif. Analysts believe that the PTI will take advantage of the situation and may be in a position to make the next government.
“A polarized political landscape akin to the 1990s, with marginalization of PML-N’s grass root support and swing momentum in favor of the PTI, should underpin the formation of a coalition government at the center,” according to AKD Research.
Pakistan’s 105 million voters will decide about the new government on Wednesday (July 25), in one of the most tightly contested elections in Pakistan’s history.
Nabeel Khursheed, analyst at Topline Securities, says: “We believe one of the following scenarios can unfold: first, the PTI grabs 85-95 seats and forms a coalition with smaller parties and independents; second, the PML-N grabs 80-90 seats and forms a coalition with the PPP, smaller parties and independents; and third, the PTI and PML-N get less than 80 seats.
“In the first scenario the market may react positively as this outcome is expected to lead to a stable government. In the case of the second scenario, the immediate reaction of the market will be negative as former PM and PML-N party head Nawaz Sharif has called the upcoming general elections a referendum against his disqualification. The market may react positively in the long run. In the case of a third scenario the market will react negatively as there will be a brief confusion,” Khursheed explains.
Analysts say no matter who wins the election, the winner should have a clear majority.
“The market will take a positive turn if any party gets a majority or even gets the ability to make a strong coalition government because the split mandate would be negative. The winning of PML-N or PTI will be positive for the market,” Zeeshan Afzal said.
“If the PML-N wins the election with a majority, the market is expected to react positively because they had driven the market to its highest level and investors believe that they will continue with their policies. Investors will react to the elections of others according to the policies of the parties,” Ahsan Mehanti, chief executive of Arif Habib Group, told Arab News.
Analysts believe that whoever makes the next government will have to face tremendous pressure in the first month: There will be no time for a honeymoon because the worst economic situation demands immediate attention.
“The next government will have to show its seriousness about the economic situation. Going to the IMF would be an unfavorable choice as its program will come up with conditions the government will have to meet. Further monetary tightening will turn the investors to other avenues,” Amin Yousuf, CEO of AKY Securities, told Arab News.
“Who will invest in the stock market in a high-interest rate regime,” Yousuf asked, adding: “Investors will turn to other avenues like secured government savings. There will be no more foreign investment in equities as long as the Pak rupee instability persists.”
Two working days are left until the general election. During this period the investors’ interest is likely to remain glued to election euphoria. The vulnerable economic position and persistent foreign selling remain major concerns for valuations.
The interim government has also started preparatory work for a fresh IMF program. In this environment banks, oil and gas exploration and the production sector, and independent power producers are expected to perform well. Persistent foreign selling owing to the sliding Pak rupee, the US interest rate liftoff and the global trade war may continue to drag the index.
Election results to set direction of Pakistan’s stock market
Election results to set direction of Pakistan’s stock market
- Weak coalition government may create confusion among investors
- Political uncertainty, weak economy keep Pakistan stock market under pressure
‘Paradigm shift’ as GCC urban population to surge 30% by 2030: Arthur D. Little
RIYADH: Urban populations across the Gulf Cooperation Council region are projected to grow 30 percent from 2020 to 2030, increasing demand for housing, infrastructure, and inclusive development, analysts say.
In its latest report, international management consulting firm Arthur D. Little said that 90 percent of GCC residents will live in cities by 2050, providing a $150 billion economic regional opportunity.
The study revealed that Saudi Arabia is leading this transition, with the Kingdom eyeing to build 500,000 new housing units to meet the rising demand.
Saudi Arabia is undertaking a dozen giga-projects to address the needs of its growing urban population. These developments are key to the government’s economic diversification goals, forming a core component of Vision 2030.
“We’re witnessing a paradigm shift. This isn’t about building cities — it’s about creating living, breathing economic ecosystems that grow from within local communities,” said Rajesh Duneja, lead researcher at Arthur D. Little.
Driven by Vision 2030 objectives and its Quality of Life Program, Saudi Arabia is striving for three of its cities to be recognized among the top 100 in the world for livability.
The consulting firm added that the Kingdom’s ongoing efforts are not just a construction initiative but a catalyst for opportunity, education, and long-term economic contribution, with Saudi Arabia embedding workforce development, small and medium enterprises, and local engagement in this journey.
Earlier this month, a report released by real estate and investment management firm JLL said that the ongoing urban infrastructure development in Saudi Arabia is creating new hotspots for growth, driven by a surge in tourism and economic diversification efforts.
In July, an analysis by British property consultancy Savills said that the Kingdom’s capital city, Riyadh, is poised to be one of the fastest-growing metropolizes in the world over the next decade, driven by the growth of the country’s mega projects.
In July, a report released by Statista also outlined urbanization progress in Arab world nations, with Kuwait already having a 100 percent urban population in 2023.
Statista added that 99.35 percent of people in Qatar live in urban areas, followed by Bahrain, the UAE, and Saudi Arabia, with 89.87 percent, 87.78 percent, and 84.95 percent, respectively.
The Arthur D. Little report said the surging demand for housing and infrastructure in the region also calls for community-driven strategies to adopt a more inclusive approach, as traditional infrastructure models alone cannot meet the scale of this demand.
“The pace of urbanization across the Middle East, especially Saudi Arabia, is unprecedented. To ensure that ambitious goals, such as those embodied in Vision 2030, are reached, it is vitally important that communities participate in, and feel part of, the changes,” said Arthur D. Little.
The analysis added that these community-focused strategies are not only enhancing social impact but also driving economic growth.
The management consulting firm projected that community-focused initiatives could support the region’s 4 percent gross domestic product growth trajectory, reinforcing its economic resilience amid global challenges.
“This is not just urban development. It’s the emergence of a new economic blueprint that places human potential at its core,” said Maurice Salem, principal at Arthur D. Little Middle East.
According to the study, the region’s demographic profile also strengthens the necessity for a community-driven approach.
“With only 3 percent of the population in Saudi Arabia over the age of 65, the Middle East has an unparalleled opportunity to leverage its young, dynamic workforce,” said the report.
It added: “When integrated with local talent, cultural heritage, and SME development, infrastructure projects become engines of socio-economic transformation.”
Oil Updates — crude gains as cooling US inflation points to possible easing
SINGAPORE: Oil prices rose on Monday as lower-than-expected US inflation data revived hopes for further policy easing, although the outlook for a supply surplus next year weighed on the market, according to Reuters.
Brent crude futures rose 36 cents, or 0.5 percent, to $73.30 a barrel by 07:21 a.m. Saudi time. US West Texas Intermediate crude futures climbed 39 cents, or 0.6 percent, to $69.85 per barrel.
“Risk assets, including US equity futures and crude oil, have started the week on a firmer footing,” IG markets analyst Tony Sycamore said, adding that cooler inflation data helped alleviate concerns following the Federal Reserve’s hawkish rate cut.
“I think the US Senate passing legislation to end the brief shutdown over the weekend has helped,” he said.
Both oil benchmarks fell more than 2 percent last week on concerns about global economic growth and oil demand after the US central bank signaled caution over further easing of monetary policy. Research from Asia’s top refiner Sinopec pointing to China’s oil consumption peaking in 2027 also weighed on prices.
Money managers raised their net-long US crude futures and options positions in the week to Dec. 17, the US Commodity Futures Trading Commission said on Friday.
Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.
Shipments resumed on Saturday, according to Belarus’ BelTa state news agency. On Sunday, Hungarian Foreign Minister Peter Szijjarto said supplies on Druzbha to the country had restarted.
Before the halt, the pipeline was shipping 300,000 barrels per day of crude.
US President Donald Trump on Friday urged the EU to increase US oil and gas imports or face tariffs on the bloc's exports.
The European Commission said it was ready to discuss with Trump how to strengthen what it described as an already strong relationship, including in the energy sector.
Trump also threatened to reassert US control over the Panama Canal on Sunday, accusing Panama of charging excessive rates to use the Central American passage and drawing a sharp rebuke from Panamanian President Jose Raul Mulino.
In the US, the number of operating oil rigs was up one to 483 last week, the highest since September, Baker Hughes reported on Friday.
Macquarie analysts projected growing supply surplus for next year, which will weigh down Brent prices to an average at $70.50 a barrel, from this year’s average of $79.64 a barrel, they said in a December report.
Closing Bell: Saudi main index slips to close at 11,849
- Parallel market Nomu lost 205.92 points, or 0.65%, to close at 31,238.29
- MSCI Tadawul Index shed 4.86 points, or 0.33%, to close at 1,484.56
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 43.07 points, or 0.36 percent, to close at 11,849.37.
The total trading turnover of the benchmark index was SR4.14 billion ($1.1 million), as 84 of the stocks advanced and 137 retreated.
The Kingdom’s parallel market Nomu lost 205.92 points, or 0.65 percent, to close at 31,238.29. This comes as 37 of the listed stocks advanced while 49 retreated.
The MSCI Tadawul Index also lost 4.86 points, or 0.33 percent, to close at 1,484.56.
The best-performing stock of the day was Saudi Vitrified Clay Pipes Co., whose share price surged 9.89 percent to SR38.90.
Other top performers included SHL Finance Co., whose share price rose 6.43 percent to SR18.20, as well as Taiba Investments Co., whose share price surged 4.97 percent to SR39.05.
Riyadh Cables Group Co. recorded the biggest drop, falling 6.30 percent to SR136.80.
Al Hassan Ghazi Ibrahim Shaker Co. saw its stock prices fall 5.15 percent to SR26.70.
Dr. Sulaiman Al Habib Medical Services Group also saw its stock prices decline 4.02 percent to SR286.60.
Meanwhile, Al-Baha Investment and Development Co. has announced moving its headquarters to Riyadh.
The company’s shares will be suspended for two business days starting Dec. 22, following the board of directors’ recommendation to reduce capital by 26.5 percent from SR 297 million to SR 218.3 million during an extraordinary general meeting held on Dec. 19.
The National Agricultural Development Co. has announced the release of its Sustainability and Environmental, Social, and Governance report.
According to a Tadawul statement, it outlines the company’s approach to embedding sustainability criteria within its strategic direction and operations as well. It reflects the firm’s commitment to its ESG responsibilities along with its devotion to sustainable development objectives in line with the Global Reporting Initiative standards.
NADEC’s strategy complements the requirements for economic growth, keeps pace with developments in the Kingdom, and aligns with Vision 2030, which emphasizes environmental sustainability and renewable energy as fundamental components of development.
The analysis further provides a comprehensive insight into NADEC’s sustainability initiatives and commitments for the year 2023. The statement also disclosed that NADEC will periodically issue reports to keep stakeholders informed of ongoing developments going forward.
NADEC ended the session at SR25.50, up 0.98 percent.
Alhasoob Co. has announced the termination of the non-binding memorandum of understanding to acquire all shares of Alkhorayef Printing Solutions Co. by issuing shares to its owner Alkhorayef Group Co.
A bourse filing revealed that this comes without reaching an agreement between the two parties and without any obligation on either party.
Alhasoob Co. ended the session at SR64.20, down 3.07 percent.
Saudi Basic Industries Corporation has announced the board decision to distribute SR5.1 billion in interim cash dividends to shareholders for the second half of the year.
According to a Tadawul statement, the total number of shares eligible for dividends amounted to 3 billion shares, with the dividend per share standing at SR1.70. The statement also revealed that the percentage of dividend to the share par value stood at 17 percent.
SABIC ended the session at SR67.00, up 0.30 percent.
Saudi Arabia accelerates digital transformation with new transport initiatives
- Aim to increase the transport and logistics sector’s contribution to Kingdom’s GDP from 6% in 2021 to 10% by 2030
- Strategy envisions increasing air freight capacity to over 4.5 million tonnes annually
RIYADH: Saudi Arabia’s Ministry of Transport and Logistics has taken a significant step forward in its digital transformation with the launch of a new Digitalization and Technical Processing Center, alongside the unveiling of the Unified Documents and Records Platform.
These initiatives were announced by Minister of Transport and Logistics Services Saleh Al-Jasser during a ceremony attended by senior officials and industry leaders, as reported by the Saudi Press Agency.
The new center and platform are part of the ministry’s broader strategy to accelerate digitalization in line with the National Transport and Logistics Strategy and Vision 2030 goals.
A primary aim of these efforts is to increase the transport and logistics sector’s contribution to Saudi Arabia’s gross domestic product from 6 percent in 2021 to 10 percent by 2030. This would generate an additional SR45 billion ($11.9 billion) in non-oil revenues annually.
To achieve these goals, the NTLS prioritizes infrastructure development and operational improvements. Key plans include expanding the railway network by approximately 8,080 km, which features the 1,300 km “land bridge” project, and enhancing port infrastructure to accommodate over 40 million containers annually.
The strategy envisions increasing air freight capacity to over 4.5 million tonnes annually, as well as expanding international flight destinations to over 250.
Improving service quality and safety is another critical focus. The NTLS aims to position Saudi Arabia among the top 10 countries in the Logistics Performance Index and secure 6th place in the Road Infrastructure Quality Index. It also seeks to reduce road traffic accidents and fatalities by over 50 percent and cut fuel consumption in the transport sector by 25 percent.
In conjunction with the digitalization efforts, the ministry also inaugurated a historical exhibition that highlights key documents, photographs, and equipment used throughout the history of Saudi Arabia’s transport sector.
The exhibition also includes specialized laboratories for document restoration and sterilization, as well as a centralized destruction center to safeguard the security and confidentiality of information.
Bandar Al-Roqi, general supervisor of the ministry’s Document and Archive Center, emphasized the collaborative nature of the project, acknowledging the contributions of various ministry departments in its successful realization.
The project reflects the ministry’s commitment to integrating modern technologies to drive digital transformation while preserving the country’s transport history.
Saudi flyadeal records lowest complaint in November, 99% resolution rate: GACA
- flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100%
- Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99%
RIYADH: Saudi low-cost airline flyadeal recorded the fewest complaints among its competitors in November, with just 11 per 100,000 travelers, and achieved a 99 percent resolution rate, a recent report revealed.
Issued by the Kingdom’s General Authority of Civil Aviation, the classification index for air transport service providers and airports is designed to inform passengers about performance, helping them make more informed decisions.
Low-cost carrier flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100 percent, and Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99 percent.
Saudi Arabia’s aviation sector is rapidly growing as the nation aims to become a regional hub and major tourist destination. Through the Saudi Aviation Strategy, which opens the sector to global investors, streamlines licensing, and promotes competition, over $100 billion in aviation investment is being attracted to support the Kingdom’s Vision 2030’s goals.
The report is in line with GACA’s efforts to promote transparency, demonstrate its credibility and keenness to deal with travelers’ complaints, stimulate fair competition, and develop and improve services.
The figures from the analysis also align well with the National Aviation Strategy by the Kingdom, which aims to increase the air passenger throughput more than three-fold to 330 million by 2030.
The GACA data further revealed that despite serving over 6 million annual passengers, King Khalid International Airport in Riyadh had 13 complaints, a low rate of 0.4 percent per 100,000 passengers, and a 100 percent resolution record.
Prince Sultan Bin Abdulaziz International Airport, with nearly 6 million annual passengers, also had a complaint rate of 0.4 percent per 100,000 passengers and a 100 percent resolution rate.
King Saud Airport had the lowest complaints among domestic airports, with a rate of 3 percent per 100,000 passengers and a 100 percent resolution rate.
The most common complaints in November were related to luggage, flights, and tickets.
According to the 2024 State of Aviation Report by GACA, a key measure of the aviation sector’s success is the 7 percent growth in air cargo, reaching 900,000 tonnes, alongside a record-breaking 112 million passengers in 2023.
This passenger volume was surpassed by a 17 percent increase in the first half of 2024, with the number of flights growing by 12 percent compared to the same period last year, reaching 815,000.
