The market depicted high levels of volatility during last week, alternating between gaining and losing grounds. The loss of a key seat in the senate elections added fuel to the political uncertainty led by PDM. Investors were likely concerned about the incumbent finance minister’s tenure on the cabinet post his loss, given that he has been on the forefront of the recent negotiations with the IMF. Nevertheless, the market recouped majority of its losses in the following session after investors likely placed their bets on the long-term economic picture.

KASB Market View

After a successful vote of confidence, we believe the market will likely revert its focus back on the improving macro-economic backdrop. Moreover, with the Federal Budget on the horizon, potential budgetary measures for each sector will continue to be revealed as the budget date approaches. With oil reaching several month high and crossing the USD 71/bbl mark, we can expect the index-heavyweight, E&Ps to perform. We continue placing our preference on cyclical stocks, including cement and automobiles.

National News

PM wins trust vote with 178 votes: Allies stand behind Imran

Minutes after receiving the vote of confidence from the National Assembly (NA) Saturday afternoon, Prime Minister Imran Khan said the government would bring electoral reforms to ensure complete transparency in elections.

https://www.thenews.com.pk/print/800219-pm-wins-trust-vote-with-178-votes-slug-allies-stand-behind-imran

PDM to decide on timing of no-confidence move against PM: Bilawal

Just a day after Prime Minister Imran Khan won the trust vote in the National Assembly, Pakistan Peoples Party (PPP) Chairman Bilawal Bhutto-Zardari has said that it is now prerogative of the Pakistan Democratic Movement (PDM) to decide on the timing of a no-confidence move against the premier.

https://tribune.com.pk/story/2288045/pdm-to-decide-on-timing-of-no-confidence-move-against-pm-bilawal

Rebel attack on world’s largest crude terminal sends oil prices surging

Oil surged above $71 a barrel in Asian trading after Saudi Arabia said the world’s largest crude terminal was attacked, although output appeared to be unaffected after the missiles and drones were intercepted.

https://www.worldoil.com/news/2021/3/8/rebel-attack-on-world-s-largest-crude-terminal-sends-oil-prices-surging

Pakistan, IMF agree to lower FBR’s tax collection target

Pakistan and the International Monetary Fund (IMF) have agreed to revise downward the annual tax collection target of the Federal Board of Revenue (FBR) in order to revive the stalled extended fund facility (EFF) program.

https://www.thenews.com.pk/print/799870-pakistan-imf-agree-to-lower-fbr-s-tax-collection-target

Imran asks Hafeez to continue as his finance adviser

After getting a vote of confidence from the National Assembly on Saturday, Prime Minister Imran Khan held a meeting with Dr Abdul Hafeez Shaikh at the Parliament House and asked him to continue performing duties as the adviser to PM on finance.

https://www.thenews.com.pk/print/800505-imran-asks-hafeez-to-continue-as-his-finance-adviser

Govt seeks economic re-engagement with US administration

The government has formed an apex committee to find avenues for economic reengagement with the new US administration, including a possibility of seeking investment under the China Pakistan Economic Corridor (CPEC) project.

https://tribune.com.pk/story/2288010/govt-seeks-economic-re-engagement-with-us-administration

Separate policy for hybrid vehicles sought

The auto sector has demanded government come up with a separate policy for the promotion of local assembly of hybrid cars along with incentives for the vendors to reduce dependence on imported parts.

https://www.dawn.com/news/1610948/separate-policy-for-hybrid-vehicles-sought

Chinese automakers for incentives to encourage localization

Chinese carmakers want the government to incorporate tax and other incentives to encourage investors to ‘localise’ hi-tech EV (electric vehicle) parts in the upcoming Auto Industry Development and Export Programme (AIDEP) 2021-26 expected to be announced over the next several months.

https://www.dawn.com/news/1611129/chinese-automakers-for-incentives-to-encourage-localisation

Two urea plants: Ministry seeks Rs2bn grant for subsidy

The Ministry of Industries and Production (MoI&P) has sought over Rs2 billion supplementary grant for subsidy on provision of gas for production of 0.7 million tons of urea from two urea plants on SNGPL system.

https://www.brecorder.com/news/40071173/two-urea-plants-ministry-seeks-rs2bn-grant-for-subsidy

Auto industry demands duty removal

The auto industry has called for abolishing the additional customs duty (ACD) on import of spare parts in the upcoming budget.

https://tribune.com.pk/story/2287755/auto-industry-demands-duty-removal

LHC rejects industries’ plea, allows Ogra to recover arrears

The Lahore High Court (LHC) has dismissed a challenge of the industries against recovery of the arrears of the Estimated Revenue Requirement (ERR) on gas tariff determined by the Oil and Gas Regulatory Authority (Ogra) for 2014-15.

https://www.dawn.com/news/1610953/lhc-rejects-industries-plea-allows-ogra-to-recover-arrears

Farmers perturbed over sharp rise in fertiliser prices

Farmers have voiced harsh criticism over the sharp rise in price of fertilisers and expressed concern that the hike would place additional burden on the already suffering agriculture sector.

https://tribune.com.pk/story/2287876/farmers-perturbed-over-sharp-rise-in-fertiliser-prices

80 income tax exemptions to be withdrawn

The proposed Finance Amendment Bill 2021 to be tabled before the Parliament would extend the facility of tax credits and investment credits to different sectors and abolish 80 income tax exemptions/reduced rates from the Income Tax Ordinance 2001.

https://epaper.brecorder.com/2021/03/08/1-page/872582-news.html

Pakistan to get 17m Covid-19 vaccine doses from UK

The Conservative Friends of Pakistan (CFoP) organised an exclusive virtual event led by CFoP NHS Chapter with the British Minister for Covid-19 vaccine deployment in which various initiatives to support the UK government vaccination programme were discussed.

https://tribune.com.pk/story/2287746/pakistan-to-get-17m-covid-19-vaccine-doses-from-uk

Commercial sale of Covid-19 vaccines allowed

The government has permitted the commercial sales of Covid-19 vaccines and the first batch of Sputnik V is expected to arrive in March, said International Monetary Fund (IMF).

https://epaper.brecorder.com/2021/03/07/8-page/872544-news.html

Weighted average prices of RLNG reduced

Oil and Gas Regulatory Authority (Ogra) has reduced the weighted average prices of RLNG for consumers of Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company (SSGC) for March in month to month comparison.

https://epaper.brecorder.com/2021/03/06/8-page/872427-news.html

Nepra okays supply of additional 150MW to K-Electric

The National Electric Power Regulatory Authority (Nepra) on Friday approved a tripartite power purchase agreement (TPPA) among K-Electric, National Transmission and Despatch Company (NTDC) and Central Power Purchase Agency (CPPA) for 150MW additional power supply to Karachi from the national grid.

https://www.dawn.com/news/1610935/nepra-okays-supply-of-additional-150mw-to-k-electric

Circuit Breaker

-Word of the Day-

A circuit breaker is an emergency-use regulatory measure to temporarily halt trading on an exchange. Circuit breakers are in place to try to curb in panic-selling. They can also be triggered on the way up with manic-buying.

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KASB Morning Shout March 8th, 2021

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