KASB Morning Shout April 9, 2021

Stock Market had a strong positive today, bouncing back from massive foreign selling seen yesterday. Although the number of cases rose sharply, interest was seen across the board as value hunters search for bargain. Undoubtedly, equities as an asset class look quite attractive for medium & long term investors given the low interest rates. PM’s hint of softening of terms with the IMF in a new package imply growth would take precedence over conservative stabilization policies. This was expected after Hafeez Shaikh’s departure.

KASB Market View

G-20 has agreed on extending debt relief. That’s a comforting news for Pakistan. Similarly, the IPO of Service Global Footwear has received tremendous response and subscribed at the peak rate. There is a lot of liquidity, optimism & want for good quality stocks. We expect market to remain greenish to flat tomorrow as potential rise in number of cases over the weekend could dampen the positivity, temporarily.

National News

Forex reserves fall to $20.679bln

Pakistan’s foreign exchange reserves fell by $157 million or 0.75 percent to clock in at $20.679 billion during the week ended April 2, the central bank said on Thursday.

https://www.thenews.com.pk/print/817137-forex-reserves-fall-to-20-679bln

Eurobond inflows: SBP receives $2.5bn

On Thursday night, Pakistan received inflows amounting to $2.5 billion of recently-launched Eurobonds. The State Bank of Pakistan (SBP) has confirmed on its twitter account that SBP has received the government’s proceeds of $2.5 billion against Eurobond issuance in its account.

https://www.thenews.com.pk/print/817130-pakistan-raises-2-5bln-via-eurobonds

PM proposes 5-point roadmap to materialize D-8 vision

Prime Minister Imran Khan has proposed a five-point roadmap to materialize the vision of D-8, which include mobilizing financial resources to recover robustly for the economic and health crises incurred by COVID-19 pandemic.

https://www.brecorder.com/news/40082697/pm-proposes-5-point-roadmap-to-materialize-d-8-vision

IMF projects $23.635bn exports, $46.168bn imports

The International Monetary Fund (IMF) has projected Pakistan’s exports will touch $ 23.635 billion during fiscal year 2020-21, whereas imports are expected to reach $ 46.168 billion on FoB basis. The Fund projects trade deficit at $ 22.533 billion in the current year.

https://www.brecorder.com/news/40082696/imf-projects-23635bn-exports-46168bn-imports

IMF estimates financing needs at $23.643bn

The International Monetary Fund (IMF) has urged all key bilateral creditors to maintain their exposure to Pakistan in line with Extended Fund Facility (EFF) programme commitments, observing that there has been a rebalancing between creditors in recent months.

https://www.brecorder.com/news/40082694/imf-estimates-financing-needs-at-23643bn

Fund projects 8.7pc average CPI inflation

The International Monetary Fund (IMF) has projected average Consumer Price Index (CPI) inflation at 8.7 percent in fiscal year 2021. The IMF in its latest report, “Second, third, fourth, and fifth reviews under the extended arrangement under the Extended Fund Facility and request for rephasing of access” released Thursday, noted that the CPI is expected at an average of eight percent as continued high food prices and energy price adjustments outweigh soft international oil prices and weak domestic demand.

https://www.brecorder.com/news/40082693/fund-projects-87pc-average-cpi-inflation

Power base tariff to be further raised, govt told

The federal government has assured the International Monetary Fund (IMF) that it will further increase power base tariff by Rs 1.39 per unit from June 1, 2021 in addition to quarterly and monthly adjustments while acknowledging that adjustments of energy tariffs brought them closer to cost recovery.

https://www.brecorder.com/news/40082692/power-base-tariff-to-be-further-raised-govt-told

Market-determined exchange rate, less inflation committed

Pakistan has committed to the International Monetary Fund (IMF)) that its policies remain centered on entrenching monetary and financial stability by maintaining a market-determined exchange rate, lowering inflation, and building foreign exchange reserves.

https://www.brecorder.com/news/40082619/market-determined-exchange-rate-less-inflation-committed

IMF sets 11 new structural benchmarks

The International Monetary Fund (IMF) has set 11 new structural benchmarks (SBs), reset the delayed and merged the two Financial Action Task Force (FATF) related benchmarks for ongoing reforms under the Extended Fund Facility (EFF) programme.

https://www.brecorder.com/news/40082621/imf-sets-11-new-structural-benchmarks

Whopping Rs1.27tr hike in taxes committed with IMF

Pakistan has made a commitment with the International Monetary Fund (IMF) to increase FBR taxes by a massive Rs1.272 trillion (almost 2.8 per cent of GDP) in the coming budget and jack up electricity rates by almost Rs4.97 per unit in the remaining three months of the current fiscal year.

https://www.dawn.com/news/1617210/whopping-rs127tr-hike-in-taxes-committed-with-imf

Govt sets cotton output target at 10.5mln bales

The government on Thursday set cotton production target at 10.5 million bales from an area of 2.33 million hectares, almost double over the previous year, and fixed 8.2 million tons production target for rice over 3.07 million hectares of land for summer crops 2021/22.

https://www.thenews.com.pk/print/817128-govt-sets-cotton-output-target-at-10-5mln-bales

Commitments to IMF: Gas tariff to be revised in second half of current calendar year

Pakistan has made a commitment with the IMF under structural benchmark conditions for increasing the power tariff by over Rs5 per kWh till June 2021 while revising the gas tariff in the second half of the current calendar year.

https://www.thenews.com.pk/print/817281-commitments-to-imf-gas-tariff-to-be-revised-in-second-half-of-current-calendar-year

DRAP allows emergency authorisation to fifth Covid-19 vaccine

The registration board of Drug Regulatory Authority of Pakistan (DRAP) has allowed another Chinese vaccine, CoronaVac, for COVID-19, officials said on Thursday adding that despite its low efficacy shown during the trials, the vaccine was allowed to counter the third wave of pandemic in Pakistan.

https://www.thenews.com.pk/print/817278-drap-allows-emergency-authorisation-to-fifth-covid-19-vaccine

Loophole

-Word of the Day-

A loophole allows a person or business to avoid the scope of a law or restriction without directly violating the law.

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