PAR News - Thurs, 28 Mar 2024

PAR News Bulletin - Thurs, 28 Mar 2024

PAR News - Thurs, 28 Mar 2024
PAR News - Thurs, 28 Mar 2024
PAR News
March 28, 2024
News

TOPLINE

  • Repatriation of profits and dividends by foreign investors surged by 237% during the first eight months of FY24, reaching $759.2 million compared to $225.4 million in FY23. Most of the amount, primarily from Foreign Direct Investment (FDI), increased from $188.5 million to $703.7 million.
  • The sugar market remains quiet due to successful government policies aimed at maximizing returns for farmers and ensuring price stability for consumers. As a result, sugar has seen one of the slowest rates of price increase among kitchen essentials since 2021, with only a 20% average annual increase in retail prices.
  • The nation's gas transportation system is under strain due to low RLNG usage, causing a critical line pack pressure of 5,003 mmcfd and posing a significant threat. Energy Ministry officials are urging the Power Division to increase imported gas usage to relieve RLNG transportation lines.
  • PSO cautions of energy supply disruptions as circular debt in LNG sales rises uncontrollably, with outstanding dues from SNGPL hitting alarming levels, totaling Rs 49 billion for fiscal year 2024, and reaching a total of Rs 550 billion.
  • The SIFC, chaired by Prime Minister Shehbaz Sharif, will hold a three-day meeting of the new Executive Committee (EC) to finalize previous decisions. Since Ishaq Dar's appointment as Chairman of the CCoP on March 22, 2024, no formal meetings have occurred, causing delays in decision-making.
  • Humanity's failure to reduce carbon emissions, which hit record levels in 2023, has spotlighted carbon capture and storage (CCS) and direct air capture (DAC) as key solutions.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

  • Silent Success: Stability in the Sugar Market - Despite reports of a demand slowdown, the sugar market remains quiet due to successful government policies aimed at maximizing returns for farmers and ensuring price stability for consumers. As a result, sugar has seen one of the slowest rates of price increase among kitchen essentials since 2021, with only a 20% average annual increase in retail prices compared to other staples. [BR]
  • Ramadan Inflation Hits Rawalpindi, Islamabad: 40% Surge - In Rawalpindi and Islamabad, fruit and vegetable prices surged by 40% in the first half of Ramadan, with onions, tomatoes, peas, and other items seeing notable increases. For example, apples are priced at Rs 250 to Rs 300, pomegranates at Rs 350 to Rs 400, and poultry chicken at Rs 430 per kilo. [The News]
  • Local Cotton Market: New Crop Phutti Prices Decrease - New crop Phutti prices in the local cotton market are decreasing, ranging from Rs 10,000-11,000/40 kg following an advance deal at Rs 9,500/kg. Cotton prices in Sindh and Punjab range from Rs 19,000-22,000/maund, while Phutti prices in Punjab are between Rs 9,500-10,000/40 kg. The Spot Rate holds at Rs 21,500/maund, with Polyester Fiber at Rs 367/kg. [BR]
  • Dry Fruits Import: Rs 1.57 billion was the import value of dry fruits and nuts in Feb 2024, up 163% compared to Feb 2023. [ET]
  • Buffalo Meat, Milk Exports to China: Maryam Nawaz Sharif instructs boosting buffalo meat and milk exports to China with vaccinated and tagged cattle. She emphasizes accurate data, research, and disease control for livestock improvement. Punjab produces a significant portion of Pakistan's milk, beef, mutton, and poultry meat, with China importing billions worth of meat and milk annually from Pakistan. [ET]
  • Customs Raises Duties: The Customs Classification Committee of the FBR imposed a 20% duty on imported multivitamins and health supplements, rejecting a request for an 11% rate, citing their classification under a higher tariff heading, prompting questions about their proper classification under the Pakistan Customs Tariff. [BR]
  • SAFWCO Grants Rs 0.5 Million for Rural Enterprises: The Sindh Agricultural Forestry Workers and Coordinating Organization (SAFWCO) distributed a grant of Rs 0.5 million to promote small and medium-scale enterprises in agriculture and livestock in rural areas under the GRASP program, supported by the European Union, ITC, and PPAF. A cheque distribution ceremony was held at SAFWCO's head office for this purpose. [UP]
  • IMF Urges Uniform Tobacco Taxation: The IMF recommends a uniform tax structure for Pakistan's tobacco industry, advocating for single-tier taxation on both foreign and domestic cigarette manufacturers, with recent tax increases resulting in a significant decrease in smoking rates, according to sources from the Federal Board of Revenue (FBR). [BR]
  • Cement Export: Rs 3.7 billion was the export value of cement in Feb 2024, down 18.68% compared to Rs 4.55 billion in Feb 2023, according to the Pakistan Bureau of Statistics. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

  • Gas Transportation Strain Sparks Urgent Action: The nation's gas transportation system is under strain due to low RLNG usage, causing a critical line pack pressure of 5,003 mmcfd and posing a significant threat. Energy Ministry officials are urging the Power Division to increase imported gas usage to relieve RLNG transportation lines and prevent potential disasters. [The News]
  • PSO Warns of Energy Supply Disruptions: PSO cautions of energy supply disruptions as circular debt in LNG sales rises uncontrollably, with outstanding dues from SNGPL hitting alarming levels, totaling Rs 49 billion for fiscal year 2024, and reaching a total of Rs 550 billion. PSO faces financial strain due to persistent payment defaults, leading to significant cash flow issues. [ET]
  • PIA Privatization Plan Approved: The PIA Holding Company's board has approved the privatization scheme for Pakistan International Airlines, with operations starting after its inaugural meeting at the Secretary Aviation's Office in Islamabad. The government, having endorsed it on March 20, 2024, swiftly appointed the Board of Directors on March 26, 2024. [BR] [ET]
  • Refining Sector Gears for Fuel Oil Exports: The refining sector, including CPL and PRL, is set to resume exporting furnace oil after OGRA approval, with CPL already authorized to export 25,000 tonnes by April 5, 2024, and PRL awaiting imminent approval. PARCO is also preparing to export 50,000 tonnes of fuel oil as its stocks surpass 100,000 tonnes. [The News]
  • Thatta Wind Projects: KE to Purchase 300 MW - PPIB has arranged Category-III wind projects in Thatta, with KE set to buy 300 MW through its network, per NEPRA sources. PPIB's Managing Director informed NEPRA Chairman of the decision, following CCoE's 2019 approval for PPIB to conduct competitive bidding for 31 wind projects totaling 2,139 MW under ARE Policy 2019. [BR]
  • CCP-SAMR MoU: Boosting Pakistan-China Investment - The CCP will sign an MoU with China's SAMR to enhance Chinese investment in Pakistan, particularly through CPEC and Chinese companies. With investments expected to rise significantly, the CCP aims to establish a robust legal and regulatory framework to facilitate expanding business activities between the two countries. [BR]
  • Sunir Seeks PM's Support for NTDC Dues: Iranian firm M/s Sunir seeks Prime Minister Shahbaz Sharif's support for payment of outstanding dues from NTDC, citing completion of the Gwadar Pak-Iran transmission line despite challenges. Sunir started work ahead of schedule, investing its own resources based on the Prime Minister's special instructions and amendment 2(A). [BR]
  • Opinion: Reimagining IRSA - “The Indus River System Authority is under siege. IRSA is the only federal institution in the country charged with regulating, monitoring, and distributing the Indus waters among the provinces. It is mandated to implement the 1991 Water Apportionment Accord. The accord has become outdated. It is a source of inter-provincial disputes and accentuates climate vulnerabilities. IRSA’s most urgent challenge is to reinvent itself, support the political process to update WAA, and align its regulatory mechanisms with increasing political, cropping, and climatic compulsions.” - By Ali Tauqeer Sheikh [Dawn]

AGRI UPDATES & PAKISTAN POLICY

  • PTI Leaders Pledge Action for Release Amidst Threats: Lawyers and elected representatives of Pakistan Tehreek-e-Insaf vow to pursue all avenues for the release of their leaders, citing perceived threats to Imran Khan's life. Speaking at a press conference in Peshawar, party leaders including MNAs Arbab Sher Ali, Shandana Gulzar, and Moazam Butt reiterated their stance. [BR] [BR]
  • Delays & Concerns Surround CCoP Meetings: Since Ishaq Dar's appointment as Chairman of the CCoP on March 22, 2024, no formal meetings have occurred, causing delays in decision-making. An anonymous official within the Privatisation Commission expressed concerns over the lack of submission of board summaries to the cabinet for approval, emphasizing the need for CCoP meetings to follow board decisions. [BR]
  • SIFC's EC Meeting: The SIFC, chaired by Prime Minister Shehbaz Sharif, will hold a three-day meeting of the new Executive Committee (EC) to finalize previous decisions. The EC will focus on various ministries, including oil and gas, mining, finance, revenue, SBP, and IT, with the Chief of Army Staff being the only non-EC member. [BR]
  • NAC to Review FY 2023-24 Q2 GDP Estimates: The NAC will review Q2 GDP estimates for FY 2023-24, chaired by the MoPD&SI secretary, with the Finance Ministry projecting around three per cent growth. In the previous meeting on November 28, 2023, Q1 GDP grew by 2.1 per cent, with agriculture up five per cent and manufacturing up 2.5 per cent. [BR]
  • Foreign Investors' Profit Repatriation Surges 237%: Repatriation of profits and dividends by foreign investors surged by 237% during the first eight months of FY24, reaching $759.2 million compared to $225.4 million in FY23. Most of the amount, primarily from Foreign Direct Investment (FDI), increased from $188.5 million to $703.7 million, while portfolio investment rose from $37 million to $55.5 million. [BR] [Dawn] [ET]
  • Pakistan's Trade Deficit Widens with Regional Partners: Pakistan's trade deficit with nine regional countries grew by 10.98% to $5.415 billion in the first 8 months of the current fiscal year due to increased imports from China and India. Exports to China rose, but remained negative to other regional countries, while imports from China and India increased by 14.16% to $8.326 billion compared to last year. [Dawn]
  • FTSE Russell: Pakistan, Egypt Under Review - FTSE Russell has Pakistan on watch for a downgrade to "frontier" market and Egypt for a potential move to "unclassified." Vietnam aims for an upgrade to "secondary emerging" status, with an update expected in September. FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG), manages stock market indices. [Dunya]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

  • Israeli Genocide: Israeli forces killed three individuals in a pre-dawn raid in Jenin, targeting militants according to the military. Palestinian health ministry reported casualties, stating two men were killed in an airstrike and another shot dead by Israeli troops. Gazans protest Tel Aviv's disregard for a UNSC ceasefire resolution, while the US and UK sanction the Gaza Now channel. [BR] [Dawn] [ET]
  • Russia Accuses Ukraine, U.S., UK in Concert Hall Attack: The director of Russia's security agency accused Ukraine, along with the United States and Britain, of involvement in the attack on a concert hall near Moscow that killed at least 139 people. Ukraine denied the accusations, labeling them as lies, while the Islamic State claimed responsibility for the mass shooting. [BR]
  • Baltimore Bridge Insurance Fallout: The collapse of Baltimore’s Francis Scott Key Bridge may cost insurers billions due to the closure of a major port and six missing individuals following a collision with a container ship, with the full financial impact still unclear as assessments are underway across insurance. [BR] [Dawn]
  • Xi Jinping Asserts China's Tech Growth in Talks with Rutte: During talks in Beijing, Xi Jinping told Dutch Prime Minister Mark Rutte that China's technological progress cannot be stopped, especially in semiconductors. This aligns with ASML facing export restrictions to China due to military use concerns, reportedly influenced by US pressure on the Dutch government. [BR] [ET]
  • UK Minister Mercer Silent on Afghan War Crimes: UK minister Johnny Mercer refuses to reveal sources alleging war crimes by British special forces in Afghanistan, despite facing legal pressure. The allegations concern murders and cover-ups during the Afghan conflict, with Mercer citing "multiple officers" as informants but declining to disclose their identities to a public inquiry. [BR] [Dawn] [ET]
  • China Pledges Support for Sri Lanka's Port and Airport: China has promised to develop Sri Lanka's deep sea port and airport and assist in restructuring external debt, vital for maintaining a $2.9 billion IMF bailout. Sri Lankan officials suggest options like extending loan tenure and adjusting interest rates as potential measures. [BR] [ET]
  • Record Carbon Emissions Drive CCS & DAC Solutions: Humanity's failure to reduce carbon emissions, which hit record levels in 2023, has spotlighted carbon capture and storage (CCS) and direct air capture (DAC) as key solutions. Major energy companies like BP and TotalEnergies have awarded £4 billion ($5.1 billion) worth of contracts for a gas power plant in Britain to be equipped with CCS technology. [BR] [Dawn]
  • UAE's FATF Grey List Removal Boosts Dubai Real Estate: The UAE's removal from the FATF grey list may boost Dubai's real estate market. CEO Farooq Syed credits collaborative efforts among government departments and local entities for this achievement, signaling the nation's commitment to combat financial crime. [BR]
  • Oil Prices Steady as Brent & WTI Futures Decline: Oil prices held steady on Wednesday, with Brent crude futures for May down 23 cents at $86.02 a barrel, and the June contract down 21 cents at $85.42. The May contract expires Thursday. US West Texas Intermediate (WTI) crude futures for May fell 13 cents to $81.49. Both benchmarks had earlier seen declines of over $1. [BR]

PAKISTAN - REMAINDERS

  • PM Shehbaz Chairs Emergency Meeting on Besham Attack: Prime Minister Shehbaz Sharif chaired an emergency meeting after the Besham terrorist attack, emphasizing concerns about cross-border sanctuaries and advocating for a regional counterterrorism approach. Participants reaffirmed their commitment to eradicating terrorism and utilizing all state resources for comprehensive efforts. [The News] [BR] [Dawn] [ET]
  • Telecard Sells Majority Shareholding in Supernet: Telecard Limited has sold the first tranche of its shareholding in Supernet Limited (GEMS PNL), comprising around 63 million shares or 51 percent of Supernet’s issued and paid-up capital, to Hallmark Company Limited (HCL).  This was announced by the Company in a notice sent to Pakistan Stock Exchange on Wednesday. [BR]
  • Opinion: Burial of Humanity - “To exhibit the psychopathic nature of the Israeli government and army, a soldier choosing his victim is shown insisting to his fellow murderers to throw up in air a young blindfolded Palestinian, which they obliged. And lo and behold, the soldier shoots down the young man whilst he is still in the air, and then lands down with a thud upon the pile of corpses to the cheers of his fellow murderers.” - By Sirajuddin Aziz [BR]
PAR News - Thurs, 28 Mar 2024

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