Friday, April 19 2024

Stocks close in red for third consecutive session
Despite massive foreign buying on Thursday, the stock market turned in a depressed performance amid the widening of the fiscal deficit and dismal auto sales data, forcing the benchmark KSE 100 index to close in the red for the third consecutive session. Ahsan Mehanti of Arif Habib Corporation said the market remained under pressure amid a slump in global crude oil prices and steady government treasury bond yields, which dimmed rate cut hopes. Automobile sales fell 38pc year-on-year in July-March, the fiscal deficit swelled to 7.4pc of GDP for FY24, and the weak rupee and SBP fines on blue-chip commercial banks for regulatory violations fuelled the bearish sentiments. However, the chief concern for the economic stakeholders remains the uncertainty about the outcome of the ongoing talks with the International Monetary Fund for a new, larger and longer Extended Fund Facility.
Related news categories: business economic-indicators psx stock-exchanges

Auto financing keeps plunging
Consumers remained reluctant to avail costly auto financing, which consequently plunged for the 21st consecutive month ending March 2024 to Rs239 billion, down by 1.4 per cent or Rs3.5bn month-on-month. According to data issued by the State Bank of Pakistan (SBP), the total decline in the last 21 months stood at Rs128bn, down from Rs368bn at the end of June 2022. Expensive financing, due to a 22 per cent interest rate, high monthly loan instalments, and the unbearable prices of vehicles, coupled with consumers’ thin buying power and the SBP’s curbs on financing to soften vehicle demand, have collectively impacted car financing. Sales of cars, LCVs, pickups, and jeeps totalled 69,078 units during 9MFY24, down from 110,898 in the same period last fiscal year.
Related news categories: auto-assembler business economic-indicators

SBP reserves stay above $8bn despite $1bn bond payment
The State Bank’s foreign exchange reserves remained above $8 billion during the week ending April 12. “During the week, SBP has executed the repayment of $1bn maturing Pakistan’s International Bond (principal plus interest),” said the SBP press release issued on Thursday. It was encouraging for the financial market that despite the payment of $1bn, the SBP reserves remained intact at $8bn. So far, no foreign inflow has been noted in the central bank’s accounts after the payment of $1bn. The SBP reserves increased by $14.4m during the week. The country’s total reserves were $13.373bn including $5.319bn held by the commercial banks.
Related news categories: business economic-indicators misc

Data shows first-ever fall in cellular users
For the first time in six years, the number of cellular subscribers in Pakistan has declined even though the penetration of 4G has increased across the country, according to data released on Thursday. The total cellular subscriptions in Pakistan fell by over 3.7 million during 2023 to close at 190.9m, down 1.9pc from 194.6m in 2022, according to the annual ‘State of Apps’ report for Pakistan, jointly released by Data Darbar, a data and market intelligence platform and UAE streaming platform Begin. As per the report, the dip in the number of cellular subscribers was the “first instance” in at least six years, “and possibly on record”. “[This] is part of the telecom industry’s conscious drive to get rid of low-value customers and focus on segments with better monetary returns,” the report said, adding that this pivot means companies moving from voice to data subscribers.
Related news categories: business economic-indicators tech-comm

Discos guilty of regular overbilling, government concedes
Conce­ding regular overbilling by distribution companies and the power division’s total ignorance about the extent of defective meters, Power Minister Awais Ahmad Khan Leghari on Thursday hinted at reviewing electricity rates for solar, industrial and tribal region consumers to revive plunging electricity demand and counter rising capacity payments. Speaking at a news conference, Mr Leghari also alleged that not only electricity thieves but also the officers and staff of his ministry and subsidiaries were causing around Rs560 billion annual loss. He vowed to end this menace that was becoming unaffordable to the nation and causing irreparable harm to the economy. The minister said the distribution companies were losing Rs200bn on account of electricity units they bill but cannot recover, while another Rs360bn worth of units were lost to theft facilitated by “our officers and staff”. “It’s unacceptable,” he said.
Related news categories: business economic-indicators power-gen-dist