KASB Morning Shout Pakistan 26th Mar 2021

KSE – 100 finished on a jubilant note as IMF Executive Board approved Pakistan’s reviews to pave way for disbursement of $500m. IMF’s nod comes in at a time when country plans to raise $ from international bonds. These measures shall continue to boost investor confidence as India-Pakistan’s improving ties improve sentiments. TRG continued to march upwards owing to strong growth portfolio while PTC continued positive streak for second day as investors value the worth of Ufone after VEON purchased its minority stake of 15% in Jazz for $273m. Positivity was noticed in Auto Assemblers today as investor view rising Gross Margins amid higher sales and strong currency appreciation.

KASB Market View

We expect positive to continue over next few days as IMF’s approval re-rates the market and next week investors spell our earnings expectations and March’s number show YoY consumption growth. However, rising cases could keep a lid on sharp upside.

National News

Pakistan hires banks for three-tranche dollar bond sale

DUBAI: Pakistan has hired a group of banks to arrange investor calls ahead of a triple-tranche sale of US dollar-denominated bonds, a document showed on Thursday.

https://www.dawn.com/news/1614619/pakistan-hires-banks-for-three-tranche-dollar-bond-sale

Fiscal year 2016; IMF claims data on govt guarantees reported inaccurately

ISLAMABD: The International Monetary Fund (IMF) has highlighted ‘new information’ that the data on government guarantees dating back to fiscal year 2016 was reported inaccurately and approved disbursement of $500 million to Pakistan subsequent to a staff-level agreement on the second to fifth review under the Extended Fund Facility (EFF) programme.

https://epaper.brecorder.com/2021/03/26/1-page/875273-news.html

Govt to build up revenue as IMF revives package

ISLAMABAD: After conceding breach of Pakistan’s financial data integrity, the government has secured approval of the executive board of the International Monetary Fund (IMF) for disbursement of $500 million and revival of the fund programme after a year.

https://www.dawn.com/news/1614656/govt-to-build-up-revenue-as-imf-revives-package

Govt plans to launch Eurobond to generate up to $1 bn

ISLAMABAD: In the aftermath of revival of the IMF sponsored $6 billion programme for Pakistan, the government plans to launch Eurobond in the international capital market probably within next few days in order to generate $750 million to $1 billion. It will be the first transaction in the last two and a half years rule of PTI-led regime when Pakistan re-appears on the radar of international investors.

https://www.thenews.com.pk/print/810041-govt-plans-to-launch-eurobond-to-generate-up-to-1-bn

Mini budget comes with two ordinances

ISLAMABAD: Two ordinances were promulgated on Thursday to comply with the conditions of the International Monetary Fund (IMF). The first ordinance is about withdrawal of corporate tax exemptions of Rs140 billion, while the second ordinance is about giving autonomy to National Electric Power Regulatory Authority (Nepra) regarding increase in power tariff. After the ordinance, the government would be bound to immediately notify the raise in power tariff recommended by Nepra.

https://www.thenews.com.pk/print/809871-mini-budget-comes-with-2-ordinances

Bill says SBP accountability being enhanced

ISLAMABD: The Finance Ministry has uploaded the proposed State Bank of Pakistan (SBP) Amendment Act, 2021, and stated that in light of international best practices and domestic experiences, legal framework of the central bank is being amended to increase functional and administrative autonomy of the central bank.

https://epaper.brecorder.com/2021/03/26/1-page/875272-news.html

State Bank Amendment Bill 2021; Exploring uncharted territory or murky waters

The Bill to amend the “State Bank of Pakistan Act 1956” is exceptionally dangerous for the economy and the country. To date, the State Bank is an arm of the State and serves to address State policies. The amendment will make the State Bank autonomous from State domain and reverse the relationship: it will be the State that will be legally obliged to feed the State Bank.

https://epaper.brecorder.com/2021/03/26/2-page/875279-news.html

Proposed law provides blanket indemnity to SBP top guns

KARACHI: A proposed bill, which the government claims is aimed at making the central bank autonomous, will practically provide immunity to top officials of the State Bank of Pakistan as no investigating agency, including the anti-corruption watchdog NAB, can initiate any action against them without obtaining permission from the board of directors of the bank, it has emerged.

https://www.dawn.com/news/1614611/proposed-law-provides-blanket-indemnity-to-sbp-top-guns

Foreign exchange: SBP reserves rise $275m to $13.3b

KARACHI: The foreign exchange reserves held by the central bank rose 2.11% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. On March 19, the foreign currency reserves held by the SBP were recorded at $13,295 million, up $275 million compared with $13,019.7 million in the previous week. The central bank gave no reason for the increase in reserves.

https://tribune.com.pk/story/2291425/foreign-exchange-sbp-reserves-rise-275m-to-133b

Housing projects; End-user subsidized markup further reduced

KARACHI: In order to support the affordable housing projects, the federal government has further reduced the end user subsidized markup rate for housing projects under Naya Pakistan Housing and Development Authority (NAPHDA) and increased the fund allocation for subsidy by Rs 3 billion to Rs 36 billion for next 10-years.

https://epaper.brecorder.com/2021/03/26/48-page/875781-news.html

Speculative pricing, money laundering: Cases filed against 10 major sugar mafia groups

LAHORE/ISLAMABAD: The Federal Investigation Agency (FIA) has registered 10 cases against 10 major sugar mafia groups in the country which in connivance with mill owners earned approximately Rs110 billion during the last one year through ‘speculative pricing’ commonly known as ‘Satta’.

https://www.thenews.com.pk/print/810031-speculative-pricing-money-laundering-cases-filed-against-10-major-sugar-mafia-groups

Pact signed to assemble European brand vehicle

KARACHI: The Lucky Motor Corporation (LMC), manufacturer and distributor of Kia vehicles, entered into a Licence and Technical Assistance Agreement this week with the Stellantis Group to assemble and distribute one of their European brands in Pakistan.

https://www.dawn.com/news/1614622/pact-signed-to-assemble-european-brand-vehicle

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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