Friday, July 13 2018

Market watch: Continuing its advance, KSE-100 gains for third session in a row
KARACHI: Positive sentiments continued to prevail at the stock market on Thursday as the KSE-100 index ended its third successive session in the black. In the morning, trading kicked off on a bearish note and the index dipped over 200 points, hitting an intra-day low of 39,236. However, it faced some resistance at that point and began to pick up later. Buying interest was mainly concentrated in chemical, auto, bank, engineering and fertiliser stocks. At close, the KSE 100-share Index recorded an increase of 288.36 points or 0.73% to settle at 39,875.12. Elixir Securities’ analyst Murtaza Jafar said Pakistan equities managed to notch up gains after a shallow start. “The market opened gap down as index-heavy exploration and production stocks borne the brunt of selling following a decline in global crude prices as demand concerns grew due to US-China trade war,” Jafar said.
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Tax amnesty: Investors of dollar-denominated bonds want to trade them at PSX
ISLAMABAD: Wealthy people who have stashed billions of dollars in foreign banks have placed new conditions for bringing money back, a move that may frustrate the government as it makes efforts to cushion foreign exchange reserves with the help of the offshore tax amnesty scheme. Fetching a significant portion of the hidden foreign liquid assets through dollar-denominated bonds was an important component of the ongoing tax amnesty scheme. However, prospective investors of dollar-denominated amnesty bonds have now sought permission from the government to trade bonds at the Pakistan Stock Exchange (PSX), said officials in the State Bank of Pakistan (SBP). They wanted that the government allow them to pledge these bonds with banks as collateral to take loans, the officials said.
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Currency: Rupee stable against dollar
KARACHI: The rupee remained stable against the dollar at Rs121.4/121.6 in the inter-bank market on Thursday compared with Wednesday’s close of Rs121.4/121.6. Contrary to the impression created after the previous round of devaluation, the Pakistani currency weakened further by 3.65% in its third round last month. Since December, the rupee has cumulatively shed close to 13% of its value after the central bank reportedly abstained from intervening in response to the pressure due to a widening current account deficit. The State Bank of Pakistan has maintained that the slide in the rupee’s value is due to supply and demand dynamics of foreign exchange in the inter-bank market. While it has promised prompt intervention in case of speculative or momentary pressures, the central bank will sit on the fence and let “market-driven adjustment in the exchange rate to continue to contain the imbalance in the external account and sustain a higher growth trajectory”, according to a press statement.
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Pakistan’s trade deficit skyrockets to historic high
ISLAMABAD: Despite taking numerous administrative measures and devaluing currency by close to 15%, Pakistan booked its highest trade deficit in history in the recently-ended fiscal year, as authorities and PML-N government miserably failed to increase exports and contain the import bill. The trade deficit in the 12 months of fiscal 2018 stood at $37.7 billion with imports standing at a record $60.9 billion. The gap between exports and imports weighed heavily on the country’s external sector and pulled official gross foreign currency reserves down to a single digit. The deficit not only broke the year old record but also surpassed the government’s own revised estimate.
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Pakistan needs 6.6% growth to accommodate new job seekers
KARACHI: Pakistan will need to achieve a growth rate of 6.6% to accommodate new job seekers of around 1.3 million each year, according to the State Bank of Pakistan (SBP). Independent economists anticipate a notable slowdown in the economy to 4.8% in the ongoing fiscal year, barely a year after Pakistan achieved a 13-year high growth rate of 5.8% in fiscal year 2018, according to official figures. The trend suggests the number of unemployed people would sharply surge this year from the estimated 3.5 million at present. Pakistan needs to generate 1.3m more jobs every year: UNDP report The central bank, however, remained optimistic that the country may create comparatively higher number of job opportunities this year due to development taking place on the multi-billion dollar China-Pakistan Economic Corridor (CPEC) and through supporting the Small and Medium-sized Enterprises (SME) sector.
Related news categories: business economic-indicators misc