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Express Tribune
5 days ago
- Business
- Express Tribune
PSX range bound ahead of monetary policy
The Pakistan Stock Exchange (PSX) on Monday remained range bound and registered thin gains of 82 points as investors treaded cautiously ahead of monetary policy announcement later in the day. As expected by many analysts in the wake of escalating geopolitical tensions, the central bank left its policy rate unchanged at 11%. Despite the conflict between Israel and Iran, the market ended trading in the positive territory as it took cue from the recovery in global equities. In the morning, the PSX kicked off proceedings on an upbeat note and immediately reached its intra-day high at 122,903 points. Soon afterwards, investors resorted to profit-taking, pulling the KSE-100 index down to the intra-day low at 121,890 after midday. "Stocks advanced despite geopolitical risks amid speculation about the State Bank of Pakistan's (SBP) policy announcement later in the day," said Ahsan Mehanti of Arif Habib Corp. "Trade remained high amid consolidation. Recovery in global equities, IMF-driven upbeat projections for privatisation, economic growth and development expenditure in the federal budget for FY26 played the role of catalysts in positive close at the PSX." At the end of trading, the benchmark KSE-100 index recorded a slight rise of 81.79 points, or 0.07%, and settled at 122,225.36. Topline Securities, in its review, remarked that Pakistan's stock market experienced a pullback session, following recovery in global markets. The benchmark index traded within a range, hitting the intra-day high of 759 points and low of 253 points, before settling at 122,225 with a modest gain of 81 points. Topline mentioned that positive contribution to the index came from Bank AL Habib, OGDC, NBP, Mari Petroleum and Meezan Bank, which collectively added 371 points. On the other hand, stock selling in Engro Holdings, Pakgen Power and Lucky Cement wiped off 255 points. Market participation was robust as total traded volumes reached 1.22 billion shares and the traded value hit Rs26 billion, it added. Arif Habib Limited Deputy Head of Trading Ali Najib called it "a consolidation day ahead of the MPS (Monetary Policy Statement)." He said that the PSX had a range-bound session and ended on a relatively flat note at 122,225, up 82 points. The State Bank maintained its benchmark rate at 11%, as anticipated by the street. During the day, the benchmark index floated between 121,890 and 122,903 levels, making them the intra-day low and high, respectively. Investors opted for a cautious approach amid heightening geopolitical tensions in the backdrop of Iran-Israel conflict, Najib said. Among corporate news, the Fauji Fertiliser Company (FFC, -0.26%) board approved the submission of an Expression of Interest for PIA Holding Company (+7.95%) as the government planned to sell a 51-100% stake in PIA by the deadline of June 19. "Market direction hinges on Middle East developments and 120,000 serves as a key support. With improved stability, the index could target 130,000 in the near term," he anticipated. JS Research analyst Mubashir Anis Naviwala said that the bourse opened on a positive note, touching the intra-day high of 122,903, but failed to sustain the momentum. It closed at 122,225 as profit-taking emerged later in the session. On the economic front, the State Bank kept the policy rate unchanged at 11%, aligning with expectations. Trading activity was dominated by small-cap stocks, reflecting short-term speculative interest, he said. "We advise investors to maintain a cautious stance and avoid aggressive exposure for now. Risk management remains the key amid geopolitical uncertainty and macro developments," Naviwala added. Overall trading volumes stood at 1.22 billion shares compared with Friday's tally of 968.3 million. The value of shares traded was Rs25.7 billion. Shares of 471 companies were traded, of which 282 stocks closed higher, 159 dropped and 30 remained unchanged. Among volume leaders, WorldCall Telecom saw trading in 267.1 million shares, gaining 17 paisa to Rs1.62 per share. It was followed by Pervez Ahmed Consultancy with trading in 92.03 million shares, gaining one rupee to Rs3.93 and First Capital Securities with 86.02 million shares, higher by 79 paisa to Rs3.85. Foreign investors bought shares worth Rs243.5 million, the National Clearing Company reported.
Business Recorder
14-06-2025
- Business
- Business Recorder
Pakistan's vision amidst FY26 Budget
Pakistan's annual budget has traditionally been more of a routine fiscal exercise conducted every year, covering only one year, voted every year, and executed over one year, rather than a fully strategic, long-term development plan focused on sustained growth in economic and social sectors with focus on poverty reduction and being independent of IMF crutches. There were days when the Planning Commission of Pakistan was a mighty supervisory body preparing a well-researched five-year 'Development Plan with Vision' on government's commitment to education, health, infrastructure, job creation and above all poverty reduction. The annual budget in those times consistently aligned itself with the country's vision and government's commitment to public well-being. In recent times, however, the annual budget rarely aligns itself with those strategic visions. Investment in education, health, poverty reduction, infrastructure, and job creation falls short, especially under IMF-mandated austerity. The budget 2025-26 is no different from the past routine except that the incumbent Finance Minister, Muhammad Aurangzeb, in his second Budget presentation, has brought around professionalism and discipline in the otherwise chaotic fiscal and economic dynamics of the country. With political expediency, along with persistent IMF dictates, ruling the roost, this is the best the Finance Minister could have achieved. To expect something profound coming out the budget demands drastic actions on ground like cuts in government expenditure starting from the self-fixed and out of proportion financial privileges of our legislators and state functionaries, bringing the untaxed sectors like agriculture into the tax net, arresting the losses emerging out of loss-making public sector enterprises, radical reforms to achieve growth in the agricultural and industrial sector of the country. The political hierarchy is not ready for it - although all of it is doable for the good of the country and its people. The announced budget and IMF-driven conditions appear effective in restoring macroeconomic stability. However, they fall short in translating fiscal discipline into meaningful growth, poverty reduction, and sustainable economic transformation. Without deeper structural reforms, especially in growth, taxation, infrastructure, agriculture, and industrial policy these weaknesses may persist for a long time to come. Critics have widely spoken and written on taxation and tariffs' imbalances. These cosmetic taxation trade-offs benefiting one segment and depriving the other will not change the destiny of the people of the country. There are far bigger and serious issues which challenge the fiscal, economic and social sovereignty of the country. The budget, understandably, is silent on how to address them — as there are no ready answers for it. The budget has come up with a very ambitious GDP growth target of 4.2 percent growth — without presenting the mechanism to achieve it. This target seems detached from reality — the country's economy is likely to grow 2.7 percent in the fiscal year ending June 2025. The IMF expects GDP to grow by 2.6pc in FY25 and for the economy to grow 3.6 percent in FY26. With fiscal austerity over-riding stimulus, a 7 percent reduction in overall spending and cuts in capital outlay, the budget emphasises deficit reduction rather than growth-driving investments. Despite tax incentives, there is no coherent strategy to revive agriculture and large-scale manufacturing—sectors vital for employment and exports. Foreign Direct Investment (FDI) is the prime-mover of growth. The government had channeled funds into the Board of Investment (BOI) and Special Investment Facilitation Council (SIFC), but these efforts lacked a robust policy foundation. Despite modest FDI gains, analysts believe they are 'short-term, ad-hoc measures' with 'no significant increases' in investment volume. Even with tariff rationalisation, non-tariff barriers, red tape, and weak infrastructure remain major disincentives for FDI. Poverty alleviation remains a serious challenge for the country. The IMF-mandated austerity measures have led to cuts in public sector development programmes, risking deeper joblessness and poverty cycles. While the Benazir Income Support Programme (BISP) saw a 20 percent funding boost to Rs 7.16 billion, this remains limited in addressing deep-rooted poverty. Nearly 45 percent of the population still lives below the poverty line, with extreme poverty at 16.5 percent. Low or negative growth in agriculture, industry, and services, combined with 2 percent population growth, means stagnant real wages, pushing an estimated 1.9?million people into poverty. There are perpetual tax system inefficiencies. Only ~1.3 percent of Pakistanis pay income tax and the tax-to-GDP ratio remains just ~10 percent. Reliance on withholding taxes is regressive, disproportionately burdening the poor and limiting redistributive potential. The debt servicing pressures remains a threat to country's sovereignty. High interest payments and fiscal guarantees to state-owned enterprises continue to constrain fiscal flexibility and reduce room for investment in growth sectors. The foremost challenges are political instability, weak institutional capacity and debt burden, where interest payments consume a large share of the budget (~50 percent+), crowding out development needs. In times to come Pakistan's annual budget is likely to be a short-term, reactive document rather than a long-term strategic tool for development. It shall remain heavily influenced by IMF programmes, with limited fiscal space and political will to prioritize inclusive growth and poverty reduction independently. If Pakistan is to transition toward a strategic budgeting model, it would need fiscal discipline beyond IMF pressure, reforms in tax collection and expenditure management, stronger institutions for long-term planning and above all political consensus and will to deliver on development priorities. Copyright Business Recorder, 2025
Express Tribune
13-06-2025
- Politics
- Express Tribune
Labour bodies slam 'anti-worker budget'
Labour leaders and worker organisations have submitted a charter of demands to the Director Labour (East and West), calling on the Punjab government to set the minimum wage at Rs70,000 per month and to implement a 100% wage increase for power loom workers. The demand was led by Chairman of the Pakistan Labour Qaumi Movement and President of the Haqooq-e-Khalq Party Punjab Baba Latif Ansari, who criticised the federal budget as a "pro-capitalist, IMF-driven" document that neglects the working class. The delegation included leaders and representatives from the powerloom, hosiery and garment sectors. Speaking at the gathering, Ansari said, "This budget has been drafted under IMF diktats. It benefits both domestic and foreign capitalist interests while worsening inflation, inequality, and unemployment for working people." He slammed the government's move to reduce the super tax on corporations, increase defence spending by 16%, and allocate the largest share of the budget to debt servicing — while offering only a 10% raise to government workers, including grade-1 labourers and grade-22 officers alike. He also criticised the meagre 7% pension increase, which he argued is entirely inadequate in the face of rising inflation. "Meanwhile, parliamentarians enjoy massive pay hikes — Senate and National Assembly heads saw their salaries skyrocket from Rs200,000 to Rs1.3 million — while workers are thrown crumbs." The charter of demands also criticised the lack of taxation on the agricultural elite and the promotion of corporate farming, warning that the latter would give rise to a new class of feudal lords. "This is an anti-worker, anti-farmer, and anti-people budget," said Ansari. "We reject it completely and demand that the government prioritise the real backbone of the economy: the workers." Shabbir Kalyyar, Director Labour (West), said that determining minimum wages for workers in industrial and commercial establishments falls under the mandate of the Punjab Minimum Wages Board. He added that the board comprises representatives of both employers and workers, ensuring all stakeholder perspectives are considered. "We have received charters of demands from various labour unions across multiple sectors," he said. "These will be forwarded to the higher offices of the Punjab government, which holds the final authority to approve any increase." Sheikh Nisar Ahmad, President of the Powerlooms Sector in Sadhar, expressed concern that out of approximately 5,700 workers employed in 300 powerloom factories in the Sadhar Industrial Estate, none are formally registered with the Social Security Department. He alleged that factory owners deposit contributions for only a few workers, and social security cards are not being issued.
Express Tribune
11-06-2025
- Business
- Express Tribune
PSX at new peak as budget sparks optimism
Bulls roared back to the Pakistan Stock Exchange (PSX) on Wednesday as investor appetite grew that propelled the KSE-100 index higher by 2,328 points to an all-time high above 124k. The rally was fuelled by the announcement of federal budget, which maintained status quo on equity taxation and signalled economic recovery. Market players welcomed the avoidance of a major tax burden on capital markets and viewed the increase in withholding tax on bank deposits as a measure that would shift investment to stocks. Arif Habib Corp MD Ahsan Mehanti observed that stocks reached a new all-time high, led by across-the-board activity, as investors cheered the status quo on equity taxes and higher withholding taxes on bank deposits in the FY26 budget. IMF-driven projections of a 3.9% fiscal deficit, low current account deficit, 4.2% GDP growth, Rs86.5 billion in privatisation proceeds and Rs1 trillion federal PSDP drove the bullish momentum, he added. At the end of trading, the benchmark KSE-100 index displayed a surge of 2,328.24 points, or 1.91%, and settled at 124,352.68. JS Global analyst Mubashir Anis Naviwala said that the stock market welcomed the budget with strong optimism, breaking all resistance levels to cross the 124,000 mark. A new historic intra-day high of 124,588 was reached before the index settled at 124,353, up 2,328 points. The rally was driven by broad-based participation, reflecting growing investor confidence. He recommended investors to accumulate stocks on dips in fertiliser, cement and banking sectors. Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib wrote that the bourse acknowledged the FY26 budget with optimism. Investors viewed the budget as "neutral to positive", particularly in light of its alignment with fiscal prudence and IMF reform commitments, he said. Najib pointed out that investor sentiment turned decidedly bullish as the budget did not incorporate new taxes or levies. The continuation of subsidies for key sectors and enhanced clarity on the government's economic direction further boosted market confidence. KTrade Securities, in its report, said that the stock exchange responded positively to the budget, which was seen as supportive for capital markets. Key contribution to the index came from cement, oil and gas, banking and fertiliser sectors, with notable gains in Lucky Cement, Fauji Fertiliser, Pakistan Petroleum, Engro Holdings, Mari Petroleum, Pakgen Power and OGDC. It anticipated continued upward momentum in the current week, driven by investor optimism around the budget and positioning ahead of potential economic tailwinds. Overall trading volumes increased to 1.04 billion shares compared with Tuesday's tally of 593 million. The value of shares traded was Rs46.7 billion. Shares of 478 companies were traded. Of these, 283 stocks closed higher, 157 fell and 38 remained unchanged. Pervez Ahmed Consultancy was the volume leader with trading in 78.3 million shares, rising Rs0.49 to close at Rs2. It was followed by WorldCall Telecom with 55.1 million shares, gaining Rs0.03 to close at Rs1.45 and Sui Southern Gas Company with 45.1 million shares, rising Rs3.74 to close at Rs41.14. Foreign investors sold shares worth Rs1.1 billion, the National Clearing Company reported.
Express Tribune
24-05-2025
- Business
- Express Tribune
PSX swings on budget speculation
Shares of 362 companies were traded. At the end of the day, 212 stocks closed higher. PHOTO: FILE Listen to article The Pakistan Stock Exchange (PSX) remained under pressure throughout the outgoing week, with the benchmark KSE-100 index shedding 0.46% week-on-week (WoW) to close at 119,103 points, as investors adopted a cautious stance ahead of the federal budget for fiscal year 2025-26. Market sentiment was further influenced by the release of key macroeconomic indicators, including a modest GDP growth of 2.68% year-on-year (YoY) for FY25 and a notable 5.47% YoY surge in 4QFY25, as per the National Accounts Committee. On a day-on-day basis, the PSX began the week on Monday with mixed sentiment as investors traded cautiously over pre-budget uncertainty, a widening trade deficit and concerns about the proposed tax measures amounting to Rs700 billion. The KSE-100 index recorded an increase of 40.49 points and settled at 119,690. Next day, the bourse closed bearish as market participants were anticipating the parliamentary approval of IMF-driven tax reforms, including the phasing out of industrial incentives and the implementation of new tax levies on the agricultural sector. The index recorded a decrease of 719 points. On Wednesday, the market staged a robust rebound as the KSE-100 climbed over 950 points, driven by active investors, who were encouraged by pro-growth fiscal measures and realigned their portfolios ahead of budget presentation. The index recorded a notable increase of 960 points at 119,931. However, the PSX succumbed to profit-taking on Thursday, with the KSE-100 dropping 778 points. Finally, it wrapped up the week on a negative note with a loss of 50 points, weighed down by investor anxiety ahead of the federal budget and over the proposed IMF-backed tax measures targeting exporters and industrial sectors. "The market remained under pressure throughout the week as investors adopted a cautious stance ahead of the upcoming budget announcement," wrote Arif Habib Limited (AHL) in its weekly review. On the economic front, the National Accounts Committee released the latest GDP data, revealing a 2.68% YoY growth for FY25, with a 5.47% YoY growth in 4QFY25. Meanwhile, profit rates across various National Saving Schemes (NSS) were reduced up to 100 basis points, where the most notable cut was seen in the Savings Account as the return was lowered from 10.5% to 9.5%, AHL said. Additionally, power generation in April 2025 surged 22% YoY (the highest in 48 months) to 10,513 gigawatt hours (GWh). The State Bank's reserves rose $1.03 billion to $11.4 billion due to the loan tranche disbursement by the IMF. Overall, the KSE-100 remained negative with the index closing at 119,103 points, down 0.46% WoW. Sector-wise, the negative contribution came from cement (339 points), oil and gas exploration (268 points), fertiliser (222 points), chemical (62 points) and automobile assemblers (55 points). Meanwhile, the sectors that contributed positively were technology and communication (62 points), power generation and distribution (60 points), refinery (45 points) and textile composite (31 points). Stock-wise, the negative contributors were Lucky Cement (257 points), Fauji Fertiliser Company (237 points), Mari Petroleum (211 points), MCB Bank (131 points) and Pakistan Petroleum (75 points). Individually, the positive contribution came from NBP (127 points), Systems Limited (66 points), Bank AL Habib (65 points), Pakgen Power (56 points) and Attock Refinery (48 points). Foreigners' selling was witnessed during the week, which clocked in at $0.29 million compared to net selling of $9.13 million last week. Major selling was witnessed in banks ($1.09 million). Average volumes arrived at 492 million shares (down 25.4% WoW) while average traded value settled at $84.4 million (down 38.4%). Among other major news, more luxury items were set to attract sales tax in the budget and the government was expected to slap GST on petroleum products and increase the petroleum levy. Wadee Zaman of JS Global concurred, saying the KSE-100 index posted mixed trends during the outgoing week, reflecting a cautious investor sentiment ahead of the federal budget, and closed at 119,103 points, down 0.5% WoW. GDP growth for 3QFY25 stood at 2.4% while full-year FY25 growth was provisionally estimated at 2.68%, down from the previously projected 3.6%, he said. Meanwhile, Pakistan was negotiating with the UAE-based commercial banks to secure external financing of up to $350 million to help meet its external funding needs. Auto financing in April 2025 came in at Rs263 billion, up 12% YoY, marking the fifth consecutive month of YoY growth, Zaman added.
