Friday, September 22 2023

Stocks rally after ECP election announcement
Bulls took over the trading floor of the Pakistan Stock Exch­ange on Thursday following the announcement by the Election Commission of Pakistan (ECP) regarding the date of the next general election. Topline Securities said share prices experienced a surge amid bullish sentiments attributed to the ECP statement. The development “significantly boosted” the investors’ confidence and led to a “remarkable” increase in the benchmark index, it added. The official indication that the general election will take place in the last week of January 2024 “effectively dispelled the prolonged political uncertainty” that cast a shadow over investors’ sentiments for many months. According to Arif Habib Corporation analyst Ahsan Mehanti, a slump of up to 217 basis points in the treasury yields in the latest auction held by the State Bank of Pakistan, along with expectations expr­essed by the Asian Devel­opment Bank on polls and reforms for the stabilisation of the economy, played the role of a catalyst in the positive close.
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Our trysts with IMF
WE had our first tryst with the IMF soon after the first martial law imposed by Gen Ayub in 1958. Following this engagement, our relationship with the IMF has been like an unhappy but lasting marriage. We have contracted 22 programmes with the Fund. The present programme that started in July 2023 is the 23rd. Can our economy survive without IMF support? To answer this question, it is important to review the history of IMF’s lending commitments to Pakistan. For 14 of these programmes, we were not successful in drawing the entire amount committed by the IMF because of a breach in policy steps that Pakistani authorities had committed themselves to taking. For eight programmes, Pakistan was successful in drawing the committed amount. Most of these were short-term programmes such as the present Stand-by Arrangement.
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Barrier to foreign investment
THE words “to attract investments from friendly countries in identified sectors through an empowered organisation that serves as a ‘single-window’ platform for facilitation, and to improve the ease of doing business for potential investors through a ‘Whole of Government Approach’ — achieving optimal horizontal-vertical synergy and facilitation by the Pakistan Army” of the mission statement of the Special Investment Facilitation Council demonstrate a powerful vision. However, if we navigate the SIFC’s website, one significant aspect is absent — substantial focus on contract enforcement. The undeniable truth is that foreign investment is a vital driver of economic development in any nation, igniting growth and job creation, as well as raising living standards. Yet, the lack of effective contract-enforcement mechanisms in the country stands as a large roadblock that deters foreign investors from channelling their capital into the country. When contracts are enforced fairly and reliably, businesses and consumers can enter into agreements with confidence, knowing they will be held accountable for their promises. This creates an environment conducive to economic growth and prosperity for all stakeholders involved.
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IMF chief urges Pakistan to tax the rich, protect the poor on sidelines of UNGA
International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged Pakistan to “collect more taxes from the wealthy and protect the poor people” amidst soaring inflation following the nation’s securing of a last-minute bailout in July. Pakistan’s year-on-year inflation for the month of August leapt to 27.4pc, contracting household budgets. That same month, exorbitant electricity bills led to a protests across the country. The rattled government had initially promised some relief for the public, but later ruled it out citing Pakistan’s commitments with the IMF. Speaking to Geo News after meeting caretaker Prime Minister Anwaarul Haq Kakar on the sidelines of the United Nations General Assembly on Wednesday, Georgieva said that she believed this was in line with what the people of Pakistan would like to see for the country. “What we are asking in our programme is that please collect more taxes from the wealthy and please protect the poor people of Pakistan,” she said. “I do believe this is in line with what people in Pakistan would like to see for the country.”
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Change in gas prices to be announced soon: energy minister
Caretaker Minister for Energy Muhammad Ali on Thursday said gas prices in the country had consistently been a matter of concern, underlining that forthcoming announcements would detail the impending changes in the price of the commodity. The minister made these remarks during a visit to the Lahore Chamber of Commerce and Industry (LCCI). Caretaker Federal Minister for Commerce, Industries, and Production, Gohar Ejaz, was also attended the event. The Oil and Gas Regulatory Authority (Ogra) had in June this year asked the government to increase gas tariff by 45 per cent to 50pc for all consumer groups across the country to meet revenue requirement of two gas utilities — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — during fiscal year 2023-24. The government is yet to take a formal decision on the matter. During a visit to the LCCI today, Ali addressed the issue of gas prices, emphasising regional disparities “The price of gas varies between regions, with the North having higher prices than the South,” he said. He also highlighted the challenge of insufficient long-term LNG contracts and ongoing efforts to combat electricity theft.
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