Friday, November 16 2018

Market watch: Bulls dominate as allies assure Pakistan of financial assistance
KARACHI: Bulls dominated the stock market on Thursday as investors rejoiced over the news of Saudi Arabia releasing agreed financial assistance in upcoming days. The index rallied and gained more than 480 points in intra-day trading, finishing the day in the black. The KSE-100 index opened on a positive note and continued its journey towards the north, driven by buying interest from investors. Sentiments were further buoyed by the Chinese assurance that a financial package was currently being worked out to ease Pakistan’s external-sector challenges. Chinese Embassy Deputy Head of Mission Zhao Lijian said the Chinese package would be bigger than that of Saudi Arabia in terms of financial grant.
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FDI continues to fall in Pakistan
KARACHI: Foreign investors have continued to stay away from Pakistan as they are reluctant to make long-term investments in the face of ambiguity about new economic policy of the Pakistan Tehreek-e-Insaf (PTI) government. Foreign Direct Investment (FDI) dropped 55% to $161.2 million in October 2018, compared with $354.6 million in the same month of last year, the State Bank of Pakistan (SBP) reported on Wednesday. “Uncertainty has probably remained an element behind slowdown in foreign (direct) investment in Pakistan,” Pakistan Business Council Chief Executive Officer Ehsan Malik told The Express Tribune. The current trend of investment these days is mostly for necessary expenditure. Global investors have not made any new long-term investment in any sector of the economy since long.
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Foreign exchange: SBP reserves dive $196m, stand at $7.48b
KARACHI: Foreign exchange reserves held by the central bank continued to spiral downwards for the 12th successive week as they fell 2.55% on a weekly basis, according to data released on Thursday. The continued drop in the reserves is alarming as it raises concern about Pakistan’s ability to meet its financing requirements because the reserves have fallen below the $7.5-billion mark. Although the Saudi government has recently assured Pakistan that the promised $3-billion financial assistance will be released in coming days, the impact is yet to be seen. On the other hand, Chinese Embassy Deputy Head of Mission Zhao Lijian has also assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia in terms of financial grant.
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CCP declares LNG deal with Qatar ‘non-transparent'
ISLAMABAD: Pakistan’s anti-trust watchdog has declared the liquefied natural gas (LNG) deal with Qatar as “non-transparent”, saying the agreement has been struck at rates that are higher than India’s, putting the government under pressure which has, of late, maintained silence on the issue. In its detailed ‘Competition Assessment Study of LNG’, the Competition Commission of Pakistan (CCP) recommended the government to renegotiate the price with Qatar and also make the government-to-government deal public. Senate chairman invites foreign investment The findings of the study, which are open for comments from the public and stakeholders, could put the Pakistan Tehreek-e-Insaf (PTI) government under pressure to fulfill its promise of sharing the deal with parliament.
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In October: Current account deficit widens 34%, amounts to $1.21b
KARACHI: The current account deficit (CAD) – which is set to keep putting pressure on foreign currency reserves in the current fiscal year as well – widened for the second consecutive month in October due to an unwanted growth in imports and likely dividend payments. The deficit grew 34% to $1.21 billion in October compared with $909 million in the previous month, the State Bank of Pakistan (SBP) reported on Thursday. “Higher imports and likely dividend payments to foreign investors caused the widening of the deficit,” Arif Habib Limited Deputy Head of Research Tahir Abbas said while talking to The Express Tribune. Cumulatively, in the first four months (July-October) of the current fiscal year 2018-19, the deficit, however, shrank 4.6% to $4.84 billion compared with $5.07 billion in the same period of last year mainly due to a notable growth in remittances from overseas workers and reduction in the trade deficit on services, he said.
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