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’s Muhammad Asif wins IBSF World Snooker Championship in Qatar

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Pakistan’s Muhammad Asif wins IBSF World Snooker Championship in Qatar

  • Asif defeated Iran’s Ali Ghareghozlou 5-3 to clinch the title for 3rd time
  • PM Shehbaz Sharif promises to set up world-class facilities for sportsmen

ISLAMABAD: Prime Minister Shehbaz Sharif has congratulated Pakistani cueist Muhammad Asif for winning the International Billiards and Snooker Federation (IBSF) World Snooker Championship in Qatar for the third time, Pakistani state-run media reported on Thursday.
Asif defeated Iran’s Ali Ghareghozlou 5-3 to clinch the title in a thrilling final on November 6, 2024. He outclassed Ali 5-3: 70-25, 7-87(84), 82(56)-8, 106(106)-08, 82-12, 43-91(58), 0-118 and 93(80)-4.
“Asif made the entire nation proud by winning the international championship for the third time,” PM Sharif was quoted as saying by the Radio Pakistan broadcaster. “The talented youth of Pakistan are highlighting the country’s name in the fields of sports.”
The IBSF, founded in 1971, is the governing body for billiards and snooker worldwide. It represents 85 member countries and is recognized by the World Confederation of Billiard Sports and the International Olympic Committee.
Asif, 42, first won the IBSF World Snooker Championship in 2012 and went on to win it again in 2019. His victory ties him with India’s Pankaj Advani who has also won the World Snooker Championship thrice.
The Pakistan prime minister said Asif’s family and coach also deserved recognition, adding that providing quality facilities to Pakistani players was top priority of his government.
“The government is making all possible efforts to provide international standard facilities to the players,” he added.
 


China, Pakistan discuss advancement of rail, road and economic zone projects under CPEC

Updated 08 November 2024
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China, Pakistan discuss advancement of rail, road and economic zone projects under CPEC

  • The discussions included sections of Main Line-1 railway project, Karakoram Highway as well as Gwadar port and economic zone
  • Beijing has invested over $65 billion in energy, infrastructure and other projects as part of the China-Pakistan Economic Corridor

ISLAMABAD: China and Pakistan on Thursday discussed advancement of key infrastructure and economic projects under the multi-billion-dollar China-Pakistan Economic Corridor (CPEC), the Pakistani government said, with the two sides also discussing security of Chinese nationals working in Pakistan.
CPEC, a part of China’s Belt and Road Initiative, aims to connect China to the Arabian Sea through a network of roads, railways, pipelines and ports in Pakistan and help Islamabad expand and modernize its economy.
The discussions on key CPEC projects were held during Chinese Ambassador to Pakistan Jiang Zaidong’s meeting with Pakistani Planning Minister Ahsan Iqbal, according to Pakistan’s Press Information Department (PID).
On the occasion, the Pakistani planning minister emphasized the need for concrete mechanisms to ensure smooth and effective implementation of bilateral projects.
“Both sides deliberated on advancing key projects, including the Karachi-Hyderabad section of Main Line-1 (ML-1) and Karakoram Highway (Thakot-Raikot Section) project, and agreed to accelerate the projects’ timely execution,” the PID said in a statement.
“Regarding the Gwadar Port and Free Zone, both sides expressed a mutual commitment to ensuring the continued development of Gwadar in a holistic manner.”
The meeting came two days after a security guard at a factory in the southern Pakistani city of Karachi shot and injured two Chinese nationals before fleeing, police said.
Last month, two Chinese nationals were killed in a suicide bombing near the international airport in Karachi. In March this year, a suicide bombing killed five Chinese engineers and a Pakistani driver in northwestern Pakistan as they headed to the Dasu Dam, the biggest hydropower project in the country. In 2022, three Chinese educators and their Pakistani driver were killed when an explosion ripped through a van at the University of Karachi. A blast on a bus killed 13 people in north Pakistan in 2021, including nine Chinese nationals.
China, breaking with tradition, publicly spoken out against security threats to its workers and nationals living in Pakistan, where hundreds of them work on Beijing-funded projects linked to CPEC.
Iqbal assured the Chinese ambassador the safety of Chinese citizens was a top priority of his government.
“Pakistan will continue working closely with China to ensure the security of Chinese citizens, projects, and institutions,” he was quoted as saying by the PID.
Ambassador Jiang expressed gratitude for Pakistan’s comprehensive engagement and said the Chinese side was ready for collaboration in areas of agriculture, mines and minerals, industrial cooperation, according to the PID.
Iqbal shared that his ministry was in coordination with the National Development and Reform Commission of China to arrange high-level workshops to bring together experts from both sides to outline the future direction of CPEC’s second phase.
China has lately shown willingness for the second phase of CPEC and has given assurances for the establishment of five new corridors, including that of growth, livelihood, innovation, green economy and open regional inclusive development.
 


Pakistan to press developed nations for unconditional climate funding at COP29

Updated 08 November 2024
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Pakistan to press developed nations for unconditional climate funding at COP29

  • Pakistan is ranked as the 5th most vulnerable country to climate change, according to the Global Climate Risk Index
  • Pakistan PM’s aide Romina Khurshid Alam says vulnerable countries are suffering from their own economic challenges

ISLAMABAD: Pakistan will urge developed countries attending the upcoming Conference of the Parties (COP29) in Baku to fulfill their pledges and provide easy access to climate funding without attaching conditions, Prime Minister Shehbaz Sharif’s coordinator on climate change said on Thursday.

The COP29 climate conference, scheduled to take place in Baku between November 11 and 22, will layout new policies and bring together representatives from various nations to discuss the adverse impacts of climate change and evaluate available solutions for adaptation.

Pakistan is ranked as the 5th most vulnerable country to climate change, according to the Global Climate Risk Index. In 2022, devastating floods affected over 33 million people and caused economic losses exceeding $30 billion, highlighting the country’s high susceptibility to extreme weather events.

“Pakistan is very clear on our stance that we need all the developed countries when it comes to the pledges, one, they need to complete their pledges, they need to fulfil their pledges, and two, easy access toward the fundings,” Romina Khurshid Alam, PM Sharif’s coordinator on climate change, told Arab News in an exclusive interview.

In this file photo, taken on August 30, 2024, people wade through flood waters after heavy monsoon rains in Multan. (AFP/File)

Due to the rising temperatures, extreme climatic phenomena, including floods, droughts, cyclones, torrential rainstorms and heatwaves, have been occurring more frequently and with greater intensity across Pakistan.

The South Asian country is among the most severely threatened countries in terms of climate–induced challenges, especially in the context of its dependency on climate-sensitive sectors such as agriculture, water, natural resources and the environment, and socio-economic issues such as poverty. The country’s adaptation to the adverse impacts of climate change is inevitable and likely to become critical in the future.

Alam said vulnerable countries were suffering from their own economic challenges and vulnerabilities, while at the same time, many countries faced additional restraints on climate funding.

“It’s not fair that we always get demands to ‘do more and to do this, to do that, these sanctions are coming,’ that is something which is on the human rights violation as well,” she said, adding that Pakistan wanted to raise its voice on what happened to the pledges, how many countries benefited from them and what straightforward mechanisms could be pursued to provide effective support.

Asked about the total amount pledged by developed nations, Alam said she would provide the exact figure after COP29, but noted that “the number is very low.”

“At COP29, we are talking about the data bank system like in a way that what countries are suffering and looking forward for the carbon credits policies,” she added.

In this file photo, taken on August 30, 2024, residents gather at the site of a landslide owing to heavy monsoon rains in the remote area of Patrak, in Upper Dir district, Khyber Pakhtunkhwa province. (AFP/File)

Last month, Pakistan proposed the establishment of a regional climate data bank to help Vulnerable Twenty (V20) group of countries prepare an evidence-based response to climate disasters.

Alam said the South Asian country had planned “many things” to showcase at Pakistan Pavilion during COP29.

Speaking about the prevailing smog issue, she said Pakistan would take it up with the Indian team at COP29.

“We are open to dialogues and open to come up with the solution, we want to get the things done by dialogue,” she said, noting that the chief minister of Pakistan’s Punjab, Maryam Nawaz, had also urged India to sit together to resolve this issue.

People walk along a street amid smog in Lahore on November 2, 2024. (AFP/File)

“CM Punjab very clearly said that ‘let’s sit together to sort out this issue because this cannot be done in a way that we are not doing this or you are doing this’,” Alam said.

“This is not a game, the main thing is to think about the children and to think about the future.”

Winter smog has become an annual crisis in Pakistan’s Punjab, particularly the provincial capital of Lahore, with air quality deteriorating to hazardous levels each season. The city consistently ranks among the world’s worst for air pollution, leading to a significant rise in respiratory issues and hospital admissions, especially affecting children and the elderly.

Last year, severe pollution levels prompted a surge in cases of asthma, lung infections and other respiratory problems among residents, according to media reports.

The problem this week prompted Punjab CM Nawaz to propose cross-border cooperation with Indian authorities to tackle shared pollution sources, such as crop residue burning, which exacerbate the region’s smog problem.


Pakistan PM performs groundbreaking of first private sector university in Gilgit-Baltistan

Updated 08 November 2024
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Pakistan PM performs groundbreaking of first private sector university in Gilgit-Baltistan

  • Ramday University is being built by a trust with construction set to complete by donations from overseas Pakistanis
  • Home to some of the world’s tallest mountains, semi-autonomous GB region is among Pakistan’s least developed areas

ISLAMABAD: Prime Minister Shehbaz Sharif this week laid the foundation stone of first private sector university in Gilgit-Baltistan (GB), promising a bright future for the youth of the remote mountainous region.

Home to some of the tallest mountains in the world, the semi-autonomous GB region is counted among the least developed areas administered by Pakistan.

Ramday University is located in Thagos area of GB’s Ghanche district at an altitude of 11,000 feet. The university is being built on a 200-kanal area of land under a trust, with construction set to be completed through the donations of overseas Pakistanis, the state-run Associated Press of Pakistan reported.

GB-based news portal Pamir Times said the university will offer specialized programs in environmental studies, climate change, hydrology and mineral studies subjects.

“The establishment of an institution of higher learning in a remote area like Ghanche in Gilgit-Baltistan is highly encouraging,” Sharif was quoted as saying on by the APP during the groundbreaking ceremony in Islamabad on Thursday.

The prime minister congratulated former Supreme Cour judge Khalil ur Rehman Ramday on establishing the university.

“He expressed his confidence that this university, located at an altitude of 11,000 feet in Thagos, will reach the peak of modern knowledge and research standards,” the APP said.

Sharif stressed that GB’s development and the welfare of its people were among the government’s top priorities.

The development takes place a day after Sharif visited the mountainous northern region, where he inaugurated a model village for flood-affected families during a day-long visit to Ghizer.

There, Sharif pledged to provide residents with ownership documents to help them acquire new houses that were destroyed by the 2022 floods.


Father accused of murder of British-Pakistani girl blames stepmother

Updated 08 November 2024
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Father accused of murder of British-Pakistani girl blames stepmother

  • Sara Sharif was found dead in her bed in southwest of London in Aug. 2023 with injuries including broken bones, burns
  • Her father, Urfan Sharif, had fled to Pakistan a day before the body was found, along with his wife and the girl’s uncle

LONDON: The father of a 10-year-old British-Pakistani girl on Thursday denied her murder and instead blamed the girl’s stepmother, calling her “evil” and “psycho.”

Sara Sharif was found dead in her bed in Woking, southwest of London, on August 10, 2023 with injuries including broken bones, burns and bite marks.

Her father, Urfan Sharif, 42, had fled to Pakistan a day before the body was found, along with his wife Beinash Batool, 30, and the girl’s uncle, Faisal Malik, 29.

Sharif then called police in the UK shortly after arriving in Islamabad and said he had “beat her up too much.” During the trial, Sharif said he made up this and another confession to “protect my family.”

All three adults were arrested upon their return to the UK a month later. They deny charges of murder and allowing the death of a child.

Details of the extent of Sara’s injuries have been detailed at London’s Old Bailey court, including claims from Batool that Sharif would beat his daughter badly.

Giving evidence for a third day, Sharif admitted slapping Sara “multiple times” but denied beating, burning, or biting her, insisting that he was “never at home” when she was injured.

Sharif broke down when his lawyer, Naeem Mian, questioned him about beating Sara, who was home schooled, with a cricket bat.

The taxi driver denied burning his daughter with an iron and instead said he was “made to” slap Sara by Batool, who constantly accused the girl of behaving badly.

Pointing to Batool sitting in the dock, Sharif shouted: “I should not have believed her... I didn’t realize I’m living with evil and a psycho.”

He also suggested that Batool was the one who bit her “like an animal.”

The jury was previously told that Sharif and Malik had provided their dental impressions but Batool had refused.

“I didn’t do it. Faisal didn’t do it. Who else was at home?” Sharif said.

He denied ever being aware of Sara being in pain. “She never told me that,” he said and indicated that he did not see injuries because Sara wore full-sleeve tops and long bottoms as well as a hijab head covering.

In the month leading up to Sara’s death, Mian said Sharif was out of the house at work from early in the morning to late at night while holing frequent telephone conversations with Batool, who would largely be at home.

Sharif wept as he recalled a time he came home and saw that Sara’s hands had been tied behind her back with brown packaging tape, accusing Batool of the act.

Asked why he did not call the police or ask Batool to leave, Sharif said that his wife was “manipulative” and that he believed her apology.

“I have been an idiot,” he added.

Forensic evidence shown to court included bundles of packaging tape and a white plastic carrier bag fashioned into a hood that could have been used on Sara’s head.

The bag had packaging tape stuck to it as well as long, brown hairs that matched Sara’s DNA, the court was told.

Both the bag and the non-sticky side of the tape had fingerprints that matched Sharif’s, who denied fashioning a hood out of the plastic bag or using it on Sara.

He said the fingerprints could be a result of him handling the items while sorting the garbage.

Sharif had previously accused Batool of being abusive toward him and preventing him from asking Sara about how she obtained her injuries.

In 2022, Batool texted her sister that Sharif had suggested using make-up to cover up bruises after beating Sara, to which the sister replied: “LOL it was going to happen you can tell.”

In the days before her death, Sharif said Sara, who did chores around the house, had asked him to “not go to work.”