Daily news:1st July 2020

Good Morning

Pakistan has received inflows of $3 billion as loans in a week from multilateral agencies for budget support in the wake of COVID-19.The country has received over one billion dollars fresh loan inflows from the Chinese bank to deal with COVID-19 and build foreign exchange reserves. The State Bank of Pakistan (SBP) has confirmed arrival of these inflows on Tuesday. The State Bank of Pakistan (SBP) has reported that the government raised Rs16.1 billion through Pakistan Market Treasury Bills (T-bills), against the auction target of Rs100 billion.The SBP conducted the auction for the sale of 3-month, 6-month and 12-month T-bills and received bids amounting to over Rs585.7 billion. Federal government will likely to cut the petroleum price by Rs 10 per litre or 10 percent for the month of July sources said. On Friday, federal government announced to increase the price of petrol by Rs 25.58 per liter with effect from June 26 to July 31, 2020 in line with the hike in 112 percent hike in global crude oil prices.

Market View: The KSE-100 Index closed yesterday’s trading session at 34,421.9 points, up by 240.1 points. We expect the market to remain range bound in the upcoming session however cyclicals may drive the index on the back sharp decline in T bill yields in the recent auction hinting towards a further rate cut of 25-50bps.

Commodities:
Brent oil (USD/bbl): 41.67 (+0.97% D/D)
WTI Crude oil (USD/bbl): 39.75 (+1.22% D/D)
Gold (USD/oz): 1800.7 (-0.02% D/D)

National News

$3bn inflows received in a week

KARACHI: Pakistan has received inflows of $3 billion as loans in a week from multilateral agencies for budget support in the wake of COVID-19.

The country has received over one billion dollars fresh loan inflows from the Chinese bank to deal with COVID-19 and build the depleting foreign exchange reserves. The State Bank of Pakistan (SBP) has confirmed arrival of these inflows on Tuesday.

https://epaper.brecorder.com/2020/07/01/1-page/842658-news.html

SBP raises Rs16bn through T-bill auction

KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised Rs16.1 billion through Pakistan Market Treasury Bills (T-bills), against the auction target of Rs100 billion.The SBP conducted the auction for the sale of 3-month, 6-month and 12-month T-bills and received bids amounting to over Rs585.7 billion.

https://profit.pakistantoday.com.pk/2020/06/30/sbp-raises-rs16bn-through-t-bill-auction/

Shanghai Electric offers to acquire 66.4pc shares of K-Electric

KARACHI: Shanghai Electric of China intends to acquire 18,335,542,678 ordinary shares of K Electric, which is equivalent to 66.4 percent of KE’s total issued share capital, local media reported.

https://www.thenews.com.pk/print/680360-shanghai-electric-offers-to-acquire-66-4pc-shares-of-k-electric

Petrol price may be slashed by Rs10

ISLAMABAD: Federal government will likely to cut the petroleum price by Rs 10 per litre or 10 percent for the month of July sources said.On Friday, federal government announced to increase the price of petrol by Rs 25.58 per liter with effect from June 26 to July 31, 2020 in line with the hike in 112 percent hike in global crude oil prices.

https://www.brecorder.com/news/40002150/petrol-price-may-be-slashed-by-rs10

Sudden hike in cement prices

ISLAMABAD: Cement shortage and a sudden hike in the prices of commodity was witnessed ahead of cut in federal excise duty (FED) with effect from Wednesday (today).”The market speculations are suggesting that the prices of cement will go up further, therefore, most of cement dealers hold the cement stock, which has created artificial shortage and prices of cement have gone up,” Arsalan, a cement dealer at Fateh Jang Road told Business Recorder.

https://www.brecorder.com/news/40002159/sudden-hike-in-cement-prices

2019-2020: Collection target surpassed despite Covid-19

ISLAMABAD: Despite Covid pandemic and slowdown of economy, the Federal Board of Revenue (FBR) has been able to provisionally collect Rs 3,974 billion during the entire financial year of 2019-20 against the downward revised target of Rs 3,908 billion, surpassing the target by Rs 66 billion.

https://www.brecorder.com/news/40002161/2019-2020-collection-target-surpassed-despite-covid-19

Petrol shortages: ‘Independent’ body formed to carry out probe

ISLAMABAD: Prime Minister Imran Khan has constituted a four-member “independent” technical committee to probe and verify the prompt actions taken by both Oil and Gas Regulatory Authority (OGRA) and Petroleum Division to handle the petroleum crises.

https://www.brecorder.com/news/40001854/petrol-shortages-independent-body-formed-to-carry-out-probe

Finance Ministry’s directive

ISLAMABAD: Financial institutions have been asked to discontinue all institutional investment in National Savings Scheme from July 1, 2020.Finance Ministry has taken decision on recommendation of State Bank of Pakistan.-

https://www.brecorder.com/news/40002153/finance-ministrys-directive

After EASA move, UK aviation industry suspends PIA flights from three airports

The UK Civil Aviation Agency has suspended Pakistan International Airlines flight operations from three airports — Birmingham, London Heathrow and Manchester. The move on Tuesday follows the decision by the European Union Aviation Safety Agency (EASA) to suspend PIA’s air operations permit for a period of six months over concerns that Pakistan is “not capable to certify and oversee its airline operators”.

https://www.geo.tv/latest/295666-following-easas-decision-uk-aviation-industry-suspends-pia-flights

ECC set to approve RLNG supply to fertiliser plants

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet is likely to approve supply of re-gasified liquefied natural gas (RLNG) at concessional tariffs to fertiliser plants, in a meeting slated for Wednesday (today), informed sources said on Tuesday.

https://www.thenews.com.pk/print/680185-ecc-set-to-approve-rlng-supply-to-fertiliser-plants

Rupee gains

KARACHI: The rupee ended stronger on Tuesday, as dollar disbursements from China bolstered the local currency, traders said.It closed at 168.05 to the dollar, down from an all-time low close of 168.18 in the interbank foreign exchange market on Monday.

https://www.thenews.com.pk/print/680194-rupee-gains

International News

Oil rises after sharp drop in U.S. crude inventories

Oil prices rose on Wednesday after an industry report showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world.

https://www.cnbc.com/2020/07/01/oil-markets-us-crude-inventories-coronavirus-in-focus.html

Gold firms near 8-year peak as virus fears prompt safe-haven demand

Gold prices edged higher on Wednesday, hovering near an eight-year high, as a spike in COVID-19 infections in the United States assuaged hopes of a swift economic rebound, pushing investors towards the safety of bullion.

https://www.cnbc.com/2020/07/01/gold-markets-coronavirus-in-focus.html

Asia Pacific stocks mostly higher; private survey shows better-than-expected Chinese factory activity

Stocks in Asia Pacific mostly edged higher in Wednesday morning trade as a private survey showed China’s factory activity for June was better than expected.

Shares in South Korea led gains regionally, with the Kospi up 1.02% in morning trade.Mainland Chinese stocks were higher in early trade, with the Shanghai composite up 0.31% while the Shenzhen component added 0.505%.

https://www.cnbc.com/2020/07/01/asia-stocks-caixin-pmi-coronavirus-currencies-in-focus.html
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